Select Committee on Work and Pensions Minutes of Evidence

Examination of Witnesses (Questions 80-99)



  80. I know from speaking to non-resident parents that they are getting very angry and very frustrated and they come to my advice surgeries and say explicitly to me that they are not going to play ball with the new system, they are so fed up. Is there then the chance that delays can lead to increasing non-compliance and non-co-operation with the CSA from your existing non-resident parents?
  (Mr Smith) I have not seen any evidence that delay in implementation has had an adverse impact on compliance. Indeed, all that we have done in the run-up to what we assumed would be an April implementation has on the evidence improved compliance and improved enforcement. I think the message so far is entirely the other way, that the risk for us, being completely open, as we have moved into a period where we start to migrate existing cases from the current scheme to the new scheme is that those people who see a reduction in payment as they come into the new scheme may choose to put that payment into implementation immediately rather than from the common dates on which the new assessment will apply. We recognise that risk and we know the need for more effort into compliance around those individuals who seek to take advantage of that.

  81. But, you see, I am also getting complaints from people who have worked out exactly what their new payments are going to be and for their own particular circumstances that is often a very substantial reduction. They know that not only are they going to have to wait for a long time before they are brought on to the new scheme, but even once they are brought on to the new scheme the changeover of payments for many of them will be phased in because of the big change in the level of payments. We all understand that from the point of view of the parent carer who does not want to see a substantial reduction overnight in the amounts of money that she is getting, but nevertheless for the non-resident parent one of them actually worked out that his child is going to be 16 before he thinks that he will get down to what the level should be under the new system, should that new system ever come in, and so of course what they say to me is, "You are denying me my human rights. You as an MP have changed the law, the law is not being implemented, I am financially disadvantaged. I want compensation." What do you say to somebody like that?
  (Mr Smith) I say in a nutshell that we are here to operate and enforce the law as it is legislated rather than how people would wish it to be and the law will take effect when MPs decide when the law will take effect.

  82. I am just reminding you that there are a lot of unhappy people out there. One final issue to do with non-resident parents. You will recall that because of the difficulties in applying the horrendously complex formula, for many non-resident parents they have built up, through no fault of their own, very substantial arrears because the calculations started from that initial moment of the CSA dealing with their claim, and in recognition of the fact that the very substantial arrears were often built up because of delays by the CSA there was the opportunity for those non-resident parents to reach an agreement with the CSA so that they only paid arrears over the previous six months and then the other arrears were cleared. I understand that that scheme was time limited to this April. The assurance at the time was that the Agency hoped that the calculations and the arrears would be dealt with so that you would not have as many people who fell into that group, but what about the people who are still in that group who are now being denied the opportunity for co-operating and as part of the co-operation having some of those arrears wiped off? Have you solved the problem with regard to the backlog so that there are not going to be parents in this group and, if you have not solved the problem about the backlog and there are parents who are still in this group, can you extend that scheme?
  (Mr Neale) What you have said is exactly right. This is something called the deferred debt scheme and it did come to an end in April when we were expecting the new arrangements to go live. Ministers are currently looking at re-activating the scheme. As things stand there is a continuing backlog of cases.

  83. Certainly I would urge you to keep the scheme running to at least offer something to these non-resident parents. May I finally go back to the question about your correspondence with your client group? Mr Darling, the Secretary of State, when he made his statement to the House on 20 March[4], actually said: "The Department has written to new people—as it was duty bound to do—telling them about the plan to introduce the new system at the end of April. We will write to them again, as it is clear that we cannot in fact bring them on to the new system at the end of April." How does that fit into what you were saying? Clearly existing clients were not going to be brought in at the end of April, but you had written to everybody and given them an understanding that they were going to be brought in when the reassurances were given. The Secretary of State seems to have given an indication here, an assurance, that you were going to explain this to people but you did not.

  (Mr Smith) I do not want to introduce elements of sophistry into that. I think that statement is capable of being interpreted in more than one way. We will be writing to all our clients again when we have some news for them. The news that I hope we will be able to give them will follow the next statement that is made by the Secretary of State in the House of Commons which will be an indication of when we expect the new arrangements to apply to new cases, and again comments on the impact of that statement on the existing caseload.

  Mrs Humble: Chair, I think it is important that all your clients do know exactly what is happening with regard to them and have assurance as soon as possible about future dates when they are going to be transferred and of course we have concerns about new clients coming on who have an expectation that they would be brought in April and that has not been the case.

James Purnell

  84. I want to ask a few questions about the implications of the delay for your staff. Your business plan refers to a large amount of training that was going to go on to prepare for the reform and presumably the implementation of the IT system. Can you update us on whether that training has taken place and, if so, whether you are worried that people will be rusty by the time the IT system is implemented and whether you will be having refresher courses or whether you have stood down people from training pending the implementation of the IT system?
  (Mr Smith) The direct answer to the question is that we have stood down people from their courses and we want to make sure that the training that we provide to people is what we call "just-in-time" training. It is training we can move into use very quickly after we implement the arrangements. That is not to say that we have deferred the entirety of our training programme. We are looking to see if there are any elements in the training programme for child support reform that we can accelerate and gain some immediate business benefit from running them. One of the courses in particular, relating to telephone negotiating skills and the ability to build relationships with people by telephone, is something where we think we can utilise for our staff and get very immediate business benefit and benefit to clients from by pulling forward the mainstream of the child support reform training. We will probably seek to do that in the first half of this year because that is a generic and long-term benefit.

  85. We have also had a memorandum from the Public and Commercial Services Union who say that the current scarcity of information about the new start date only serves to lower morale and foster rumour. Are you worried about this and what are you doing to reassure staff?
  (Mr Smith) I am worried about anything that impacts on the morale of our staff because they have a tough job to do at the best of times and they need all the support and help with coaching they can get to do that job. I make a point of spending as much time as I can in business units. Normally at least a day a week I speak face to face, most months, with between 400 and 600 staff. I firmly want to tune in to what they are thinking and doing about this. It is uncomfortable for them not to have a firm date for the implementation inevitably, but our job as managers is to focus them on what they need to do week in, week out, month in, month out, to deliver the standard of service that we want to deliver through the Agency, and increasingly our people understand the message. When you can get the opportunity to talk with them and explain the background of the difficulty in establishing firm dates, they do understand this issue. Communication is not necessarily about drafting fine words and making sure everybody gets a piece of paper on the desk week in, week out. It is about ensuring that senior managers in particular understand the complexity of these issues, are comfortable with them and are able to engage with staff on a face-to-face basis and talk them through this, and increasingly we are getting better at that.

  86. I have sympathy with why you were not wanting to be drawn into simple fault sharing earlier on between yourselves and EDS, but presumably you would agree, given what you have just said, that it was not the fault of the staff involved that the delay in the IT system has occurred.?
  (Mr Smith) I think our staff did everything we might have expected them to do to prepare the Agency for a go-live effort. I take each and every opportunity I can get to properly recognise that and thank them for it.

  87. Can I give you another opportunity? The PCS have told us that staff are worried that because their bonus was dependent on the implementation of the system and because the system has been delayed, completion of the reforms depended on the implementation of the IT system and so their bonus will not be paid out because of no fault of their own. Can you reassure them that their bonus will be paid if you agree, as you have just said, that the delay was not their fault?
  (Mr Smith) Yes. The bonus payments under the latest arrangements are funded separately by colleagues in the Treasury and since we have taken the decision to defer implementation I have entered into discussions with the Treasury about the appropriate amount of the bonus that should be paid. As soon as I reach agreement with the Treasury and with Ministers we will make an announcement.

Mr Stewart

  88. We were told in a ministerial reply[5] on Monday that you have around 700 staff vacancies at the moment, which is extremely worrying when you are doing the important work that you do. Can you give the Committee a brief update on what you are doing to try and fill those vacancies?

  (Mr Smith) We have active recruitment programmes in place at each of our business units. We do recruit on a regular basis and at most of our business units, not all, recruitment is not a big issue for us. Our biggest issue is retention of people and staying ahead of the job offers. I outlined to a previous meeting of this Committee, the introductory meeting, the sort of staffing profile that we have. We largely employ people at the lower end of pay scales. Our workforce is predominantly young. Almost by definition, given that profile, we are going to have a higher turnover of staff than many other organisations, partly because people move on to develop their careers in a world where you don't develop your career wholly in one organisation, and partly because many of the people that we bring into the Agency work with us for a while and take off and develop further education opportunities, which is right and proper, so we do have a higher turnover than we might wish and than other organisations have. We have an extra job to do to try and keep ahead of the profile of recruitment.


  89. Am I right in thinking you did a staff baseline survey last May to test some staff attitudes?
  (Mr Smith) That is right.

  90. Is that an annual exercise?
  (Mr Smith) It is becoming an annual exercise. It is something that I would like to do more often than annually. If there is one thing I believe in passionately it is understanding what my staff are thinking at any moment in time. We did a survey last year. The Department in general will do a survey this year and the Child Support Agency will have its section of that departmental survey. I certainly want to develop arrangements into the future that keep a regular form of survey going, if possible a bit more often than annually.

  91. If there is a more up-to-date result than May 2001 could we have sight of the result?
  (Mr Smith) That is not until the Department conducts its survey this summer, and then we will update ours, obviously.

  92. Because last May in the baseline staff study although it showed that 97 per cent of staff knew about the reforms only 30 per cent of them could say that they felt they had been well planned. What do you suppose the rate would be now?
  (Mr Smith) I would not like to hazard a guess on that one. I think staff may well think that the planning has been good for reform. It is the actual delivery that leaves something to be desired.

  93. That is quite a good answer. Forty per cent of staff said that they had more work to do than they could cope with; that was in May 2001. Do you think that is still true now?
  (Mr Smith) That is a difficult one to form a judgment on. I do talk with people regularly. One person who has got more work than they can cope with is another person's reasonable workload. It is difficult to get underneath that sort of figure without talking with people about it.

  94. Paying them more maybe?
  (Mr Smith) Managing them better may equally have significant impact.

  95. I will concede managing them better if you concede paying them more.
  (Mr Smith) Pay is not within my remit.

  96. It is a serious question. As a system the whole welfare-to-work system works in different locational contexts, where obviously in London it is a problem, a problem which we are finding more and more. In a constituency like mine in Scotland you are as an employer a very good employer. The rates are good, there is security of employment, it is high quality work, but you cannot possibly expect people working in competition with the financial sector in centres like Manchester and London to be able to hold the quality of people you need to get the work levels to the level of accuracy that you are aspiring to by paying them £12,000 a year. You just cannot do it.
  (Mr Smith) I will accept that the pay structure and the pay levels within the Agency could be improved.

  97. Are they being reviewed?
  (Mr Smith) They are being reviewed actively and we are developing at departmental level a longer-term pay strategy for the Department and within the Agency I am looking at how we can utilise the fact that we are creating new skill sets and new skill bases for people as we move through the child support reform programme to make the case for grading all pay structures to change as a result of that. That we will do. It is worth bearing in mind though that the locations of most of our offices are not in the high pay financial sectors. It is where often we are market leaders—Hastings, Falkirk, Dudley, Birkenhead. These are not hot spots of higher pay, which is why I do place at least equal weight on the need to manage people better than we traditionally have done. That is why one of my first decisions at the Agency was to make a conscious and significant investment in putting proper development and training facilities in place for our managers so that we can encourage them to do the job that we expect them to do. That includes providing coaching and support for individual staff members. That level of coaching and support for the individual staff members is at least as important as whether they are getting paid five or ten pounds more.

  98. Are all these new pay grade reviews contingent on the introduction of the new computer system working?
  (Mr Smith) It is contingent on them operating the new skills set inside CSR, so on that definition yes, we need the new computer system in place to do that.

Mr Stewart

  99. As we have previously discussed, compliance by non-resident parents will be a key indicator of success of the new reforms. Can you tell me what plans you have to redirect staff or resources away from making assessments to ensure compliance?
  (Mr Smith) I go back in a sense to an answer that I gave earlier, that the key determinant for compliance is getting the non-resident parent to comply as close as possible to the events which have led to an assessment being made. The key thing that we do as we move through the reform programme is to ensure that people are dealing with applications very quickly indeed after receipt, and then when we deal with the application we are in touch with the non-resident parent within days by telephone so that we actually open up a proper discussion about their responsibilities, the amounts that are due and the compliance requirements of the new system. The whole intention of this is to ensure that people are compliant from day one and we are not constantly fire-fighting because we let people drift into non-compliance over a period of time and then attempt to move into a recovery position when someone is already significantly in debt. That has got to be the right way round. That is why a large component of the training package for child support reform implementation is focused on these relationship issues and how to better use the telephone, how to build a relationship over the telephone, how to engage in discussion about money over the telephone in an emotionally fraught situation. These are things which are difficult to train people up to. It is difficult to develop people to do well but they are an essential component of the new system. This is not really a question of shifting resources but of changing the entire culture at the front-end of our business. They are literally spending less time going through the paper and keying figures into the system. The time is spent instead in this sort of discussion. That is one of the crucial determinants of whether we get the new reform arrangements off the ground. It is not our ability to shuffle the paper through an IT system and spew something out at the other end with the right answer. Important though that is, it is the relationships we build as we take people through the process because that is the determinant on whether long term they are going to be compliant or whether they are going to drift into non-compliance.

4   20 March 2002, Official Report, column 315. Back

5   20 May 2002, Official Report, column 11. Back

previous page contents next page

House of Commons home page Parliament home page House of Lords home page search page enquiries index

© Parliamentary copyright 2002
Prepared 1 July 2002