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27 Jan 2003 : Column 569—continued
Mr. Smith: I thank the hon. Member for Havant (Mr. Willetts) for his welcome—lukewarm though it was. I confirm the timetable. As my predecessor said on 20 March last year, it was right to delay, rather than rushing in an incomplete and unready system. I thought that that was generally understood on both sides of the House. Let us remember why we must modernise and improve the child support system: the Conservatives rushed it in 10 years ago. They had the benefit of good will on both sides of the House. I think that they now accept that the system collapsed under its own weight, as it was overly complex, and the IT was not ready. That is why we have had to put in place these reforms.
The hon. Gentleman asked whether additional cost had come about because policy had changed. The policy has not changed. As he knows, the basic features of the system are as set out in the 1999 White Paper. The reason that additional costs were incurred was that the project, including the interfaces with the legacy systems that we inherited—IT systems that were designed, for the most part, in the 1970s and built in the 1980s—was much more complex and required a lot more work than was originally envisaged.
The hon. Gentleman asked about the extent of the extra expenditure. I said that it was 7 per cent. more across the life of the project. The total cost of the project, across its life, goes from some £427 million to £456 million. He asked, too, about the handling of existing cases. The staff who have been employed have been striving to make the unsatisfactory existing system work as well as they can. As I said, the level of complaints has gone down. In terms of compliance, case compliance has been running at 71 per cent. and cash compliance at 68 per cent., which contrasts with the figures when the Conservative party was in charge and struggled to get compliance running at above 50 per cent. Everybody accepts that there are limits to what one can do with the old system that the Conservatives introduced. It needs replacing, and it is right to proceed as we are doing.
The hon. Gentleman asked about the changeover of existing cases. As I said in my statement, we will reach a decision on that, sensibly, once we can see how the new system is working out in practice.
The hon. Gentleman asked about the lessons to be learned. There are lessons to be learned from this and indeed other major IT projects across the years. Principal among them is the need to give even closer thought to the specification and management arrangements when the contract is originally concluded. Thanks to the work that the Office of Government Commerce is doing, and the gate procedure that is now in place on all major projects, those lessons are being learned and applied. Perhaps the most important lesson is not to inherit a system that does not work from a Government who did not work for families or for children.
Paul Holmes (Chesterfield): I thank the Secretary of State for giving advance sight of his statement.
The Liberal Democrats would have preferred to hear today that the Government were adopting our proposals to pass all the administration of child support over to the Inland Revenue, which already administers child benefit, will administer child tax credit and already has the names, addresses and tax records of everyone with children.
However, given that the Minister is now going ahead with the long-delayed attempt to streamline the existing system, if the Government and EDS are sharing the extra costs of the 18-month delay, does that mean that both were at fault in the delay?
Is it true that the appeals service is budgeting for up to a million new complaints as a result of the new system, as one internal newsletter suggests? When existing cases are eventually switched to the new system, is it still the Government's intention to switch them all at once, on the same day? If so, will the new computer
system cope? Constituents who see friends on the new system will be asking us when they will be switched to it. What should we tell them?Finally, can the Minister clarify why the new scheme starts on 3 March rather than 5 April, the start of the new financial year? The rhetoric so far has been of streamlining and simplicity, but the fear is that the chaos has only just begun.
Mr. Smith: I thank the hon. Gentleman for his remarks and his welcome, such as it was, for the introduction of the new system.
The hon. Gentleman asked about levels of compliance and general performance under the new system. I referred to levels of compliance under the existing system: cash compliance at 68 per cent. and case compliance at 71 per cent. With both of those, we expect to achieve 75 per cent. under the new system, so there will be a clear improvement.
Bringing on to the system all 300,000 recipients of income support who will attract the child support premium is an enormous gain. Taking that with the efficiency improvements in existing cases, we anticipate that some 80 per cent. of parents with care will be better off as a result of the new system.
The hon. Gentleman also asked about the changeover of existing cases and whether that would be a big bang. We shall have to phase in the changeover of the existing 1.1 million cases. As to the date, I said in response to the hon. Member for Havant that we need to review the progress and working of the new system before setting it. Of course, I understand the attraction, when people see the benefits of the new system, of wanting to do that as soon as possible, but it makes sense with any big IT rollout to do it only when one knows that the system is working properly. That is what we shall do.
The hon. Gentleman asked why the date was 3 March rather than some time in April. This represents a big step forward, a big improvement for parents with care and a fairer system for non-resident parents as well. Other things being equal, the sooner it is introduced, the better. I am sure that if I were announcing it for April, the hon. Gentleman would be asking why it was not for March.
Mr. Terry Rooney (Bradford, North): I remind my right hon. Friend that the original child support legislation required three further pieces of primary legislation. The computer system that was put in to operate it has now suffered more than 1,000 days when it has been either partially or totally shut down. The Opposition should bear that in mind.
I return to the child maintenance premium. Had we been on the original timetable, many single parents would have been receiving it from this April. The delay is not their fault. Is there any possibility of bringing that in before transferring existing cases to the new system, so that those children are lifted somewhat out of the poverty that they are in?
Mr. Smith: I thank my hon. Friend, who takes a close interest in these matters, for his pertinent reminders of the sheer chaos in the original child support system. We have had to tackle that and introduce reforms steadily to improve it before changing to the new system.
I understand the case that my hon. Friend makes on the child maintenance premium. I assure him that we considered the matter very carefully, but had we sought, before existing cases switched to the new IT system, to link those receiving maintenance with the child maintenance premium, that would have added another layer of complexity to a very demanding IT delivery programme. As I said, we are trying to manage and reduce the risks associated with that, so that we can deliver to an acceptable standard, and therefore decided, perhaps unfortunately, that it was not possible to make that link.
Mr. Andrew Mitchell (Sutton Coldfield): While the Secretary of State's announcement is good news, in that the technology has at last caught up with the will of Parliament, may I remind him that these changes, with a simpler formula, are not in themselves a panacea because there will be a significant increase in the element of rough justice that results? I urge him and his colleagues to understand the need to be robust in facing down those who will seek an excuse not to pay their maintenance when society rightly expects them to do so.
Mr. Smith: The answer is yes. I welcome the hon. Gentleman's remarks, which are all the more striking because of his previous responsibilities in this area. Although there is an element of rough justice in the greater simplicity, people can at least see where they stand and understand the basis on which the assessment is made. Sadly, that is not true of the vast majority of cases under the old system.
As the hon. Gentleman said, we need to be robust, and we certainly shall be. One of the advantages of the change is that it will release staff resources to focus on enforcement rather than on assessment and reassessment. I shall be pleased to pray the hon. Gentleman in aid when we need to be robust.
Angela Eagle (Wallasey): Does my right hon. Friend agree that we do not need to take lessons from the Conservative party, which bought from America an off-the-shelf computer that does not even recognise British national insurance numbers? I welcome the fact that we can now replace that and run a much simpler system. Will my right hon. Friend say a little more about how the simplified system will enable staff to spend more time chasing the approximately 30 per cent. of non-resident parents who currently pay nothing?
Mr. Smith: Yes, indeed. My hon. Friend is right; I believe that the current system came from Florida, where they produce such good voting machines. My hon. Friend is right to point to the improved capacity that we will have to chase those who pay nothing. That is in addition to the advantages to the child maintenance premium, which, in benefit and payment terms, will provide an incentive where there is none—apart from the child bonus—for families on income support and jobseeker's allowance.
We now have an opportunity to increase the level of payment and, more generally, to reinforce, where appropriate, the importance of non-resident parents meeting their responsibilities and having contact with their children. I hope that because the new system makes
it easier to address financial issues, it will do rather less to sour relations between parents with care and non-resident parents.
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