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16 Jul 2002 : Column 52WH

Child Support Agency

1 pm

Andrew Selous (South-West Bedfordshire): It is a great pleasure to introduce this Adjournment debate. This is my fourth such debate, and the first not to be on a specific constituency interest.

The previous Conservative Government set up the Child Support Agency with cross-party support. The CSA currently has 1.1 million clients, and its caseload is being added to at the rate of 300,000 new applications a year. It deals with many vulnerable people throughout the country, although they are mainly mothers who are seeking maintenance payments for their children. The CSA employs 12,000 part-time and full-time staff. Many of them do an excellent job in difficult and trying circumstances, and I want to place on record my thanks to them.

On 20 March, the Secretary of State for Work and Pensions announced in the House that the child support reforms that were due to be implemented on 1 April would be delayed because of problems with the computer system that the agency had hoped would be up and running by that time. At present, there is no firm date for the introduction of those reforms.

It is vital that the CSA maintains complete fairness in its work with fathers. I should stress that at the start, because I will be talking mainly about the plight of mothers who are unable to receive the payments that are due to them. It is important that fathers are treated fairly and that amounts are taken from them to support children by former wives or partners only where that is fair. The CSA must stick to that principle.

Many mothers in my constituency surgeries have advised me to advocate the stopping of visits by fathers who do not make their payments, but I shall not do that, because it would be wrong on two counts. First, it would be unkind to the children, who will already have endured the break-up of their parents' marriage or relationship. Secondly, the non-resident parent's contact with his children should enable the CSA to have greater contact with him. There is therefore a double benefit in maintaining contact with fathers, and it should be allowed to continue.

I want to go through, on a confidential basis, several of the case histories that have recently come to my attention, because they illustrate the scope of the concerns that I am discussing. A few months ago, a mother came to my surgery to tell me that she was absolutely fed up with receiving official CSA statements telling her how much money would be paid into her bank account and when. She showed me the statements, saying, "I don't want to receive more bits of paper like these. I find them so upsetting, and I have had them so many times. I go to the bank on the date specified and ask the people behind the counter whether the money is there. But, time and time again, it isn't."

Another lady told me that her ex-husband was living in a four-bedroomed house in another part of the country in much greater style and comfort than she and her children were. That was because his new partner had moved out, and the CSA had said that he needed all his available money to meet his housing costs. Unsurprisingly, the mother who came to see me found that unacceptable.

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Another lady told me that she was on the verge of losing her home, as she and her new partner were unable to meet the rent. If even a proportion of the money from the CSA and the considerable arrears due to her were paid, she would be able to keep her children in the home that they were used to. In that case, the father—the non-resident parent—was able to buy expensive clothes for the children on a weekly basis. Unpleasantly, he insisted on keeping the clothes in his house rather than letting the children take them to the mother's home. However, he was not prepared to make any child support payments.

Another mother complained to me about the expensive presents showered on her children by their father, who drove a T-registration car that was much smarter than any car that she could muster. She told me that she could not afford swimming lessons for her children, and sometimes even found the weekly food bill a struggle to meet. The father clearly had no such restrictions on his lifestyle.

I was told by another mother that her application had at one point been closed by the CSA. There had been a brief reconciliation, but it did not work, and she then found that the whole application had to be reopened and all the forms filled in again. She felt that that procedure caused unnecessary delay.

I also think of the mother who came to me several months ago, whose ex-husband had been at the other end of the income scale. He had substantial assets and income, and she had not received a penny from him. Apparently he had several bank accounts, moved money around and kept money in different names. He enjoyed a high quality of life and did not give a penny to the large number of children that his former wife looked after.

Yet another lady told me that she had first taken her case to the CSA in 1995, and in the seven years up to 2002 had received only £500 in payment. She wrote to me about the effects that her battle with the CSA had had on her children and herself, saying that her children

She also said that she had had

I hope that those examples have been useful to put a little flesh on the bones of individual CSA cases. I understand the importance of computer systems that work well. We all know the benefits in working life of computer systems. My central contention is that the CSA can run a more efficient enforcement system even without the new computer system for which it is waiting.

We know that the CSA payment compliance rate is around 72 per cent, with payments not received in 27.1 per cent. of cases. If we take the current stock of cases, at present some 300,000 clients are not receiving payment. CSA statistics suggest that more than 80,000 out of every 300,000 new cases every year will not receive the payments to which they are entitled.

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How can we improve matters? I shall make several suggestions, which I ask the Minister to take back to the Department and to consider seriously. I should be grateful if she could respond, now or later, to my suggestions or proposals, because there is huge cross-party concern about the issue. Many vulnerable mothers are not receiving the entitlements that they should receive.

First, we should ensure that CSA procedures are tighter. A time scale should be laid out for applying to letters, chasing up phone calls and making sure that forms have been sent out. There should be a two to three week maximum period before clients are chased so that the agency can make progress with their case. Basic procedures should be set up to ensure that cases progress more quickly.

People have suggested to me that P45s and national insurance numbers could be tagged so that the Department and new employers would realise that a new employee had a CSA payment liability. A new employer would straight away be able to action the payments and contact the agency to ensure that the money went through.

There are huge difficulties in relation to businesses that pay cash to their staff. Again, there should be a much stronger onus on companies that pay cash, whether in the building trade or elsewhere, to ensure that they ask all their employees about potential CSA obligations. They should not be allowed to treat the subject lightly simply because they pay their employees in cash. I know of cases of non-resident parents who invoice companies for their services rather than receiving a salary for their services. That is a method being used by non-resident parents to avoid their liabilities. Legislation should be imposed on employers so that they have a duty to check whether an employee who takes that route has a CSA liability. Non-resident parents should not be able to avoid their liabilities in that way.

Mothers—or, rather, parents with care—tell me that when the non-resident parent has his own business or is self-employed, there is even greater delay in the process. I realise that assessments have to be made and that the area is complicated, but I urge the Department to consider how estimates might be made more quickly. It is a common pattern that, as soon as an order arrives for deductions of earnings, a non-resident parent leaves the firm that pays him on a monthly salaried basis and becomes self-employed or asks to be paid in cash. That makes the trail much harder for the CSA to follow. More thought should be given to that problem.

The CSA does not have the same surveillance powers as the former Benefits Agency. I would not normally advocate greater surveillance of the citizens of this country, but what signal are we sending by depriving the CSA of those powers? Are we saying that abuse of the benefit system that costs the state money is a worse offence than failing to pay mothers with children the money to which they are entitled? That sends out the signal that we are not serious about supporting mothers and children.

The National Canine Defence League has as its slogan "A dog is for life, not just for Christmas." How much more that slogan applies to our children. We must send a clear signal that having children is not merely a

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lifestyle choice or an obligation that lasts for a few years while the relationship between the parents is going well; it is a commitment for life. We need to send that message more clearly and loudly so that it is readily understood by everyone, especially younger people, so that they understand what commitments they are taking on when they have children.

Above all, prevention is better than cure, and we should do all that we can to reduce the agency's additional caseload of 300,000 a year. I urge the Department, in its broader thinking and wider policy, to have the greatest concern for building up the stability of family life.

1.15 pm

The Parliamentary Under-Secretary of State for Work and Pensions (Maria Eagle) : I first congratulate the hon. Member for South-West Bedfordshire (Andrew Selous) on securing the debate. He raised some important issues, which have caught the concern of people throughout the country. Many of us meet people like the parents to whom he has referred in our surgeries when we are out there trying to discover what is going on in the world, so interest in the subject is not confined to south-west Bedfordshire.

The hon. Gentleman gave some indication of his concerns by referring to cases in his constituency. Naturally, he did not mention specific details, and I would not expect him to, but given that he did not tell me all the details of each case, I hope that he will understand that I cannot answer his questions on the cases that he mentioned, which appear in my notes as "Mrs. A to Mrs. G." He did not even give basic details about whether the non-resident parent in each case was working or whether the constituent to whom he had spoken was working. He highlighted some interesting issues, which I cannot deal with on a case-by-case basis today, although I can make some general points.

All Members of Parliament are concerned about compliance by non-resident parents with assessments and payments. Compliance by non-resident parents is key to an effective child support scheme, and the agency was set up to ensure that maintenance payments were made and people confronted the financial consequences of bringing up children, whether or not the parents were still together. The hon. Gentleman will know—this is not a partisan point—that because of the 1992 legislation, the current formula for assessing maintenance is complicated. The agency must work out the disposable income of both parents, and take account of necessary day-to-day expenses and even a new partner's income. In complicated cases, that can mean collecting more than 100 pieces of information before even attempting to do the calculation to make the assessment. In one in three cases processed under the old scheme, no maintenance is paid, and full maintenance is paid in fewer than half of all cases. That is after the assessment has been made. The hon. Gentleman knows as well as I do that there has been concern in recent years about the speed with which assessments are made. The new scheme will make the process simpler.

On another of the hon. Gentleman's themes, a small minority of parents simply do not want to support their children. One suspects that that lies behind some of the

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problems to which he referred. The current complicated process leaves those parents who want to evade their responsibilities with ample opportunity to frustrate the system and to delay the provision of information. The current formula makes it difficult for the agency to get maintenance assessments right and to pay them speedily. As some of the hon. Gentleman's constituents told him, non-resident parents can wait a long a time for assessments—as long as seven years in one of the cases that he mentioned—and they cannot be confident that the assessments are right. Many may then face having to pay off large sums of arrears, which is a disincentive; those who start with a mountain of debt will think that they will never get to the end of the payment process. The current formula is not a good way to ensure early and regular compliance from non-resident parents. That is one of the systemic problems that we inherited with the old formula.

The hon. Gentleman was right to say that we should not overlook the great improvements made in recent years. Compliance by non-resident parents has steadily improved. Since February 1997, the number who pay the full sum asked of them has increased by 32 per cent. to 53 per cent., which is a significant achievement. The number who pay nothing at all has reduced by 9 per cent. to 27 per cent. That is still too high, however, and we hope that the new formula will be able to tackle that.

The agency has put greater emphasis on customer relations, which was one of the problems of the old-style agency. For instance, telephone lines are now open for longer. The hon. Gentleman referred to a constituent who had to give up her job in order to contact the CSA—that was the lady who had been waiting for seven years for what transpired to be a small payment. She would not have to suffer such problems now because the telephone lines are open out of working hours. We should not overlook the great improvements that have been made to the scheme. When necessary, face-to-face interviews can now be conducted outside the office.

Like the hon. Gentleman, I pay tribute to the work of the agency's staff. They have a difficult job, placed as they are in the middle of relationships that have gone wrong. Those who have been in such a situation will know that that is a difficult place to be; the consequences are not always directed at those who are at fault. The agency staff have an inherently difficult job, and the improvements that have been made over the past few years owe much to their dedication and professionalism. I was pleased to hear the hon. Gentleman mention that.

Because of the complexities of the formula, there is a limit to what we can do within the confines of the scheme established by the 1992 legislation. That is why we are introducing a new and simpler child support scheme. The maintenance calculation will be based on a simple percentage of the non-resident parent's net income; it will be 15 per cent., 20 per cent. or 25 per cent., depending on the number of children involved. That is a far simpler calculation. Far less information will be required to complete the calculation. That should free the agency's time and resources; as a result, more time can be spent chasing payments and ensuring that they go to the parent with care instead of working out what the payments should be and then chasing arrears because it has taken so long.

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Non-resident parents, especially those who have no intention of complying, will now find themselves with no excuse. They will be able to work out for themselves fairly accurately how much maintenance they will be expected to pay. More important, because the agency will be able to calculate their liability much more quickly, large amounts of arrears will not have built up before they know exactly what they will have to pay. The new scheme will have simplicity and clarity at its heart. It will free the agency staff and allow them to spend more time ensuring enforcement and compliance.

Unfortunately, some non-resident parents will still be determined not to make any maintenance payments. The agency has already taken steps to deal with that, and it has a range of enforcement tools at its disposal. For example, it can deduct earnings at source, get a liability order, send the bailiffs in or garnishee a bank account, which is a legalistic way of saying that it can force people to hand over money from that account. Ultimately, a non-resident parent can be committed to prison for a wilful refusal to pay maintenance. The agency is not interested in resorting to such tactics at the first stage, however, and it is always looking for ways to make it easier to collect maintenance and obtain compliance. It can, for example, require companies, employers and accountants to provide information about a non-resident parent's income. The failure to provide such information, or the provision of false information, is a criminal offence that carries a penalty of up to £1,000.

The courts can now also take away a non-resident parent's driving licence as an alternative to committing them to prison. That measure has been very successful in other countries—notably the United States of America—in getting formerly recalcitrant non-resident parents to start paying maintenance, and the early signs are that it is beginning to be effective here. So far, the courts have taken away only one driving licence, but that is because 51 non-resident parents who faced the same penalty started making regular maintenance payments, which is what we want. The measure's deterrent effect therefore seems to be working. We regard sending a parent to prison or preventing them from driving as a failure because we want voluntary compliance. If we cannot get voluntary compliance, we want compliance. We want maintenance to be paid and children to be supported.

I sympathise with the hon. Gentleman's comments about some self-employed parents. Where people are self-employed, it is obviously more difficult to work out their incomes, what they should pay and what their assets are. It is not only the CSA that has difficulty in getting money from some—although by no means all—self-employed people, and the problem is familiar to revenue collectors at home and abroad. However, the measures that we have put in place, particularly those that allow us to gather information from independent

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sources, will help to improve our record on getting maintenance. If the non-resident parent will not tell us what the situation is, we can get information from elsewhere–the Department for Work and Pensions, the Inland Revenue, the non-resident parent's accountant, companies that have employed him, local authorities, which can provide bank account details, and the Driver and Vehicle Licensing Agency. We can now gather information from a range of organisations, and we ensure that we do. Our main concern—and the hon. Gentleman's—is to get compliance.

I turn now to some of the hon. Gentleman's specific questions. He made some interesting points, and I shall take some of them to the agency to get its comments. I shall be more than happy to drop him a line with detailed feedback, although I can deal with one or two of his points now.

The hon. Gentleman mentioned a constituent who had to give up her job to contact the agency. She should now be able to contact it up to 8 pm each evening—that should deal with most problems related to working hours—and up to 5 pm on Saturdays. She will not necessarily be able to contact a named caseworker, but she will be able to make contact out of normal working hours, which should assist in some situations.

The hon. Gentleman referred to a constituent whose case was reopened after an attempted reconciliation failed. When a fresh application is made after a failed reconciliation, it is necessary to go through the details again. Maintenance must be assessed on the basis of the circumstances at the time; those may have changed considerably after a period of reconciliation, and it would not be safe to assume that everything was the same. I well understand his constituent's annoyance, given that her situation may have been the same and that it must have seemed like she was jumping through the same hoop again. I am afraid, however, that we must establish the circumstances that exist at the time; we cannot simply assume that they have remained the same.

The hon. Gentleman mentioned the duties on employers to make checks. It is the responsibility of the parent, not the employer to pay maintenance. We do not want to impose additional burdens on employers who already operate deduction from earnings orders on our behalf, although we do want to ensure compliance. The hon. Gentleman ought to bear in mind that where non-resident parents hide their situation and their assets, there are other steps that we can take.

The agency aims to answer 70 per cent. of correspondence within 10 days, and we exceeded that target last year, answering 82.1 per cent. within that period, so we are tightening up on the procedures that he mentioned. In respect of his other points, I shall write to the hon. Gentleman with some feedback. Finally, I would like to thank him and congratulate him again on raising the issue.

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