House of Commons portcullis
House of Commons
Session 2006 - 07
Publications on the internet
General Committee Debates
Child Maintenance and Other Payments Bill

Child Maintenance and Other Payments Bill

The Committee consisted of the following Members:

Chairmen: David Taylor, † Mr. Christopher Chope
Alexander, Danny (Inverness, Nairn, Badenoch and Strathspey) (LD)
Boswell, Mr. Tim (Daventry) (Con)
Clapham, Mr. Michael (Barnsley, West and Penistone) (Lab)
David, Mr. Wayne (Caerphilly) (Lab)
Dorries, Mrs. Nadine (Mid-Bedfordshire) (Con)
Engel, Natascha (North-East Derbyshire) (Lab)
Griffith, Nia (Llanelli) (Lab)
Harper, Mr. Mark (Forest of Dean) (Con)
Hesford, Stephen (Wirral, West) (Lab)
Jackson, Mr. Stewart (Peterborough) (Con)
James, Mrs. Siân C. (Swansea, East) (Lab)
McCarthy-Fry, Sarah (Portsmouth, North) (Lab/Co-op)
McGuire, Mrs. Anne (Parliamentary Under-Secretary of State for Work and Pensions)
Owen, Albert (Ynys Môn) (Lab)
Penrose, John (Weston-super-Mare) (Con)
Plaskitt, Mr. James (Parliamentary Under-Secretary of State for Work and Pensions)
Rowen, Paul (Rochdale) (LD)
Selous, Andrew (South-West Bedfordshire) (Con)
Touhig, Mr. Don (Islwyn) (Lab/Co-op)
Turner, Dr. Desmond (Brighton, Kemptown) (Lab)
Weir, Mr. Mike (Angus) (SNP)
Chris Shaw, Committee Clerk
† attended the Committee

Public Bill Committee

Thursday 19 July 2007


[Mr. Christopher Chope in the Chair]

Child Maintenance and Other Payments Bill

Schedule 1

The Commission
Amendment proposed [this day]: No. 66, in schedule 1, page 46, line 36, at end insert—
‘(3) The Commission is to be responsible for ensuring that appropriate staffing levels are maintained in order for it to fulfil its functions as determined in section 2 of this Act.’.—[Paul Rowen.]
1.30 pm
Question again proposed, That the amendment be made.
The Parliamentary Under-Secretary of State for Work and Pensions (Mr. James Plaskitt): I have, of course, had time to reflect at length on the contributions made on the amendment, but have not altered my conclusions. The contributions of the hon. Members for South-West Bedfordshire, for Rochdale and for Angus had one thing in common. There is a bit of a misunderstanding on their part about the chronology in relation to staff numbers in the agency. Let me try to clear that up for them. As they know, there is an operational target set by the Department on staffing numbers, which envisages a 15 per cent. reduction and is designed to take the head count to 9,547 by March 2008. That date is very important because, as I understood it, all hon. Members who concentrated on the staffing reduction seemed to associate it with the introduction of CMEC. However, as they will see, CMEC picking up the reins and assuming responsibility for the way that child support evolves will take place largely after 2008. It is very important to understand that point, but I will say a little more about the reduction in staffing levels.
It is important to understand that the head count that we are aiming to achieve by March 2008 takes the operational numbers, by and large, back down to their level before the operational improvement plan. That point is also important in getting the numbers in context.
The operational improvement plan, which is now only one year into its operation, is a concerted attempt to get to grips with some of the historic operational issues in the CSA. On the basis of its first year, the plan it is making very good progress and we are therefore pretty confident that the tough targets that we set will be achieved.
I hope that hon. Members understand that the head count numbers that they have been focusing on lead up to March 2008 and have more to do with delivering the operational improvement plan than setting staffing levels in some predictive way for the forthcoming commission. I will expand a bit more on that later.
Andrew Selous (South-West Bedfordshire) (Con): I was particularly interested in the Minister’s brief reference to the operational improvement plan because, according to my information, in July 2006 the agency was collecting 35 per cent. of arrears and that was down to 33 per cent. in September. I do not know if he has more up-to-date information, but I am nervous about the progress of the operational improvement plan.
Mr. Plaskitt: Many indicators apply to the operational improvement plan and I am not asserting, just one year into it, that every single one is now moving in the correct direction. The key priorities in the first year of the plan are resolving what are known as stuck cases, on which progress is being made; beginning a substantial reduction in the backlog of uncleared cases, and those are down substantially; and getting more maintenance payments flowing through. From memory, I think that I am right in saying that in the first year of the plan, about 58,000 more children are in receipt of maintenance than before we embarked on it. Those are very promising indicators of the plan’s success. There is, of course, much more to be done with two years of the plan to go.
Paul Rowen (Rochdale) (LD): I was listening very carefully to what the Minister had to say. Given that the amendment would give the commission the right to set the appropriate staffing level, perhaps he could tell us what he estimates is an adequate staffing level. Is that based on the anticipated reduction in case load as a result of the move to the voluntary payments? We have concerns about how quickly those voluntary payments, rather than the statutory scheme, will become the norm.
Mr. Plaskitt: The appropriate level of staffing for the commission will be down to the commission. That is not just a neat formulation. I shall say more about that in a moment. Of course the appropriate level will depend on choices that the commission makes about how it wants to deliver these services. As the hon. Gentleman knows, we have published indicative figures of what we expect the impact on case load to be. That will emerge as we proceed and as the reforms come into play. The commission, charged as it is with certain duties, will need to assess the appropriate staffing level to deliver on the commitments that the Bill will give it. I trust that deals with the hon. Gentleman’s point.
We want clients of the agency to be able to call at times that are appropriate to them, which may be outside normal working hours. One cannot assume that one given caseworker will sit waiting for the phone to ring in case there is a call on that particular case. A number of people will inevitably need to be able to handle any customer query or issue coming in. The secret is to have a good back-up system which ensures that any single operator dealing with a call coming in to the agency can get in front of them in a timely fashion all the relevant information about a client’s case. That is the work and investment that is now being made in the IT system.
Mrs. Nadine Dorries (Mid-Bedfordshire) (Con): This is a question of accountability and individual clients knowing who is responsible for their case and whom they can approach. There are instances when my constituents’ cases require a certain level of input over a short period, and for them to be handed from one person to the other every time they ring the call centre is unsatisfactory. Should not there be one member of staff who takes overall responsibility for a particular case while that case is ongoing, accepting that every time clients phone they would not always speak to that person?
Mr. Plaskitt: I understand where the hon. Lady is coming from, but I do not think that that is operationally possible. It would be unhelpful to a client of the agency to be told that the named individual inside the agency handling their case was Ms A, for example, because there would inevitably be occasions when they rang up to speak to Ms A and were told that she was handling someone else’s case, was not in today and so on. It would create a false impression of what we were able to do.
In my experience as a constituency MP—I suspect this is backed up by other members of the Committee—constituents are not so concerned about having one named individual. Their primary concern is that whenever they make any contact with the agency their point is dealt with effectively and efficiently by whomever takes that call. That is the key to a seamless and continuous service to clients. It is not where the agency has got to at the moment, as we know. That is why the current investment in the IT is so important.
Mr. Mike Weir (Angus) (SNP): I understand what the Minister is saying and I appreciate the operational difficulties, but is it not the case at present that if I take up the case of a constituent and get a response from the CSA it will give a named person to be passed on to the constituent, who can then contact that person directly? Thus, the agency has the facility to do that in some cases, when it has got to the complaint stage, but it would seem sensible to bring that process forward, in order to avoid it getting to that stage.
Mr. Plaskitt: The complaints procedure is not the same as the day-to-day administration process, which is why the two are not transferable. I am anxious to make progress on the matter, because I fear that we are straying a little from the amendment.
Andrew Selous: I put to the Minister the same point that I put to the hon. Member for Rochdale this morning. It is that many of the fears expressed by members of the Committee would be allayed if the Minister could assure us that a fairly detailed record of what has happened will appear on the CMEC operator’s computer screen. That would allow an operator who may be fresh to the case to see what has happened during the last few calls—what stage the case has reached—and to pick it up quickly and deal with it. Our constituents are frustrated by having to explain the whole case from the beginning every time.
Mr. Plaskitt: That is what I am saying. That is the ideal operative state. It is not yet the state that the agency has reached. Many cases are still proceeding clerically and are still paper-bound. It is a huge job for the agency to move from its current state to being able to offer that kind of service. The purpose of the operational improvement plan is to fix some of the agency’s inherited problems and to get the process into a fitter state before CMEC assumes responsibility for it. I hope that hon. Members are assured that the specific provision in the amendment is not necessary.
Clause 2 sets clear objectives for the commission, and it must aim to meet them when exercising its functions. It also has a duty to act in a way that is both efficient and effective. That places a requirement on the commission, working within its allocated funding, to ensure that it has the capability to deliver, which includes having an appropriate level of staffing. If the commission did not do that, it would be failing to meet the legislative requirements placed upon it; it would be failing to act and failing to pursue its objectives. The appropriate level of staffing will depend on the operating model and a series of other decisions still to be made by the commission.
For example, if the commission contracts out a significant proportion of its services, as the Bill enables it to do, the number of direct employees will be fewer than if it chooses to keep a substantial number of services in-house. However, the choice of operating model is a matter for the commission—and, therefore, so is the level of staffing. The concern that the amendment seeks to address is already provided for in the Bill. For that reason, I urge the hon. Member for Rochdale to withdraw the amendment.
Paul Rowen: We have had a useful discussion on the issue. I am sure that we will return to it after CMEC becomes operational. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Paul Rowen: I beg to move amendment No. 59, in schedule 1, page 48, line 28, at end insert—
‘(c) examine the perfomance of the Commission in relation to historic debt.’.
The Chairman: With this it will be convenient to discuss the following amendments: No. 40, in clause 9, page 4, line 32, at end insert—
‘(e) information concerning the historic debt to be collected by the commission, including
(i) the total amount of historic debt;
(ii) the numbers of individual debtors and individual amounts owed expressed as a proportion within different bands of debt levels;
(iii) the steps taken to recover that debt, including the budget and staffing resources devoted to this activity; and
(iv) the amount of debt considered uncollectable, broken down by the reasons why.’.
No. 12, in clause 9, page 4, line 32, at end insert—
‘(e) information concerning the historic debt to be collected by the Commission, including—
(i) the total amount of historic debt;
(ii) the numbers of individual debtors;
(iii) the amounts of debt owed, broken down by bands;
(iv) the steps taken to recover that debt, including the budget and staffing resources devoted to this activity; and
(v) the amount of debt considered uncollectable, broken down by the reasons why.’.
Paul Rowen: In the latter part of an earlier speech, the Minister touched on some of the CSA’s current problems with regard to historic debt. The amendments seek to ensure that proper arrangements are in place to deal with that issue when CMEC becomes operational.
The first amendment would ensure that the auditor general of the National Audit Office included the matter of historic debt in that body’s report to Parliament, when CMEC’s accounts are discussed. That is important because the debts are substantial. We need to ensure that they are taken into account, given that a different model was suggested in the Henshaw report, whereby CMEC would not deal with historic debt.
The second amendment adds the matter of historic debt to the remit of the annual report that the commission must present to the Secretary of State. Again, it is important that a regular report is made to the Secretary of State and to Parliament, through the Select Committee on Work and Pensions, to ensure that we know what has happened in that regard, given the size of the debt. We want to ensure that the historic debt functions of CMEC are mentioned explicitly in the Bill, and that accountability for the historic debt is established. That is important because we do not want historic debt to be overshadowed by the introduction of the new assessments process and the so-called clean break. New arrangements do need to be put in place, but there must be increased concentration on ensuring that the historic debt, which affects a substantial number of children, is not forgotten or washed away.
1.45 pm
A generation of children is growing up—some of them have already grown up—without the maintenance that they are owed, because the CSA failed to take into account proper debt collection and enforcement. I submit that that is a contributory factor to the high level of child poverty in this country. We need to understand the nature of the debt and how much of it can and should be collected. In setting up CMEC, we must work to ensure that that money will be collected.
The CSA annual report 2006 refers to at least £1 billion of child support money that the CSA regards as collectable. I hope that when the new enforcement powers in the Bill are introduced in 2008, the debt recovery target—currently £213 million by March 2009—will be reconsidered. It will be intolerable if it is not made a priority to recover that £1 billion, which should be being used to give children the start in life that they deserve by enabling them to be looked after. We seek, through the amendment, to ensure that the target is even higher than £213 million. I hope that the Minister will give us an indication as to what he believes will be collected, given the substantial new powers in the Bill.
I accept that only a small percentage of the historic debt has been written off, which we welcome. However, we are concerned that the real reason for that is that the collection of large sums of money has been quietly dropped, because it is too difficult or too expensive to pursue. In England and Wales, for example, debts of £760 million are currently not being pursued, because they are more than six years old and therefore cannot be subject to a liability order in the courts. We need to know what CMEC will do to ensure that more of the money is collected.
If the commission decides not to take action to recover the debt, the parent with care needs to be told that the debt is going to be written off. At the moment, many constituents who come to us about the fact that the CSA is not bothering to recover debt have not been told. If a decision is taken that a debt will not be collected because it is too difficult, we would like the parent with care to be informed. More than that, if it can be proved that it is the fault of the CSA or CMEC that the debt has not been pursued, some form of compensation should be paid to the parent with care to ensure that account is taken of that non-recovery. In the evidence-taking session on Tuesday, we heard what people had to say about the level of child poverty and why it is important that the money should be paid. If there is to be a write-off, it should come with compensation paid by CMEC.
The debt recovery problems that the CSA has encountered are listed in the 2006 NAO report on the agency: inability to list all non-resident parents who have accrued debt either in the CSCS, the original computer system, or CS2, the new one; inability to mark as high-risk those cases with a history of high enforcement action; inability of CSA accounting systems to identify the debtors with the largest debts or the most persistent offenders; and the fact that the CSA’s enforcement directorate dealt with only 19,000 of the 247,000 cases of non-compliance or partial compliance in the UK, which is only 7 per cent. of the total.
Although I welcome a new start and a new organisation with tougher enforcement powers, we want a commitment that those enforcement powers will be used to ensure that the children who have been left behind and have not had the start in life that they were guaranteed get what they deserve. Considering the CSA’s powers, if debt is written off, it is CMEC’s responsibility to pay compensation.
Andrew Selous: There is very little in the comments of the hon. Member for Rochdale—indeed, nothing at all—with which I disagree. There is huge concern about debt among the groups watching from the outside as we set up CMEC. There is also concern, although I hope that it is ill-placed, that the Government might seek to move on from historic debt and focus just on obtaining accurate maintenance week by week—after all, that is the specific objective of clause 2—without dealing properly with historic debt. It is vital that we guard against that.
One Parent Families’ brief to all Committee members says that the group is extremely concerned about the inherited historic debt and feels that the Bill does not give the issue the attention that it deserves. The group is right to say so. My information, as I said in my earlier intervention on the Minister, is that the situation is worsening as we speak and that debt is growing by £20 million a month, while the agency is managing to bring in only some £7 million. The total debt is increasing as we speak by £14 million net a month. If he can give us more up-to-date figures, I look forward to receiving them. In July 2006, 35 per cent. of arrears were being collected, and that percentage decreased in December to 33 per cent. Again, if there is a more up-to-date figure—I do not suppose that the July 2007 figures are available yet—and the Minister can reassure us, I should be grateful.
The hon. Member for Rochdale has cited the NAO’s excellent report of 30 June 2006, “Child Support Agency: Implementation of the Child Support Reforms”. I shall not repeat everything he said, but it is a thorough document. It is alarming to read the relevant information in detail. On pages 64 and 65, we learn that there is
“no facility to identify that previous enforcement action has been taken and that the case may initially represent a higher risk of non-compliance.”
We do not know whether individual cases have involved debt. We have been told that debt accumulates not only after the liability has been given, but while assessments are calculated. There is currently no facility to identify the largest debtors or the most persistent offenders, and—this is something that we might come on to later—64 per cent. of cases where a liability order was sought were inaccurate.
Very serious concerns have been raised on the issue of debt. Why is it so important to have a really full and accurate report on debt in the annual report to the Secretary of State in clause 9, which is the subject of amendment No. 12? There are a number of reasons. Failure to collect debt is fundamentally unfair to those who pay. It obviously robs children and parents with care of money that is rightfully theirs, and it brings the credibility of the agency into disrepute. Good debt collection, on the other hand, gets the money through to the children who need it, and sends a very powerful deterrent message to those thinking of skipping their responsibilities to their children. I have always said to parents with care who have come to see my in my constituency surgeries: “Don’t worry. That debt will not be washed away. It is a lifetime liability, and is there. The Department will do all that it can to get it back for you.” I want to be able to go on saying that to my constituents with a fair degree of reassurance.
I end briefly with a constituency story. A lady came to see me, whom I took to see the Minister himself in days gone by such was the difficulty of her case. She was owed about £40,000—a considerable sum. She told me that because maintenance had not been paid week by week, she had had to raid a small legacy left by her mother for her children in order to buy shoes for her children for the start of the school term. That is an individual example of the sort of thing that we are talking about when the money is not paid. As the hon. Member for Rochdale and I have said, a generation of children has gone through childhood without that money. That money needs to be collected to give those children a chance, perhaps in their 20s or 30s, to get something back that they did not have when they were younger. There are real concerns, and we definitely want to see information as a requirement of the Bill in clause 9.
Mr. Plaskitt: There is, of course, no denying that the situation in respect of debt is one of the big issues and problems within the agency. It is important to be aware that the debt that has accumulated within the agency began to do so from day one, at the absolute start of its operation way back in the 1990s, and it has continued to grow pretty much remorselessly throughout the life of the existing agency.
I do not want to get away from the fact that before we berate the agency for its shortcomings and its performance on debt, ultimately, the debt has arisen because of the lack of co-operation of non-resident parents, who simply have not faced up to their responsibility. We are asking the agency, and its successor bodies, to do a difficult job, in going after non-resident parents, some of whom will go to the most extraordinary lengths to evade their responsibilities. That is ultimately where the fault of the situation lies. Having said that, of course the agency needs to perform better in its efforts to collect debt, and we must ensure that when CMEC comes into operation, it will have all the right powers at its disposal to continue the essential task of going after the debt that is owed. Primarily, we want to see the debt chased that is owed to parents with care, but a chunk of it is owed to the taxpayer and the Secretary of State.
Far from being overlooked, the issue of debt is very important to us, and I draw the attention of the hon. Member for Rochdale and that of the Committee to the initiatives that we have taken in respect of improving debt recovery within the context of the operational improvement plan. It is early days, as I have said about other aspects of the plan, but there are already some promising signs.
2 pm
We have introduced new powers and recruited the assistance of private debt collection agencies to go after some of the debt that was proving difficult for the agency to collect. They have only just begun that work but have already pulled in £3 million of outstanding debt. Interestingly, merely sending letters to some non-resident parents, informing them that we were about to pass their debt to a private collection agency, produced £1 million in payments immediately, which was a promising start.
We have also recently introduced a new power enabling staff of the agency to collect debt payments over the phone. While they are in conversation with a non-resident parent who is non-compliant, they can put the debt payment on the parent’s debit or credit card. That is an important facility. The change was quite simple but has proved extremely effective. It has only just come in, but £7.5 million has already been collected by that method. Things are already happening to help us go after the debt.
The commission of course will have a range of new powers to pursue debt and manage it more effectively. It will acquire powers to negotiate debt settlements, which in some cases are the quickest and most effective way of resolving outstanding debt problems, on the understanding that they will be accepted only with the consent of the non-resident parent. The commission will also acquire powers to recover arrears from the estates of deceased non-resident parents.
Andrew Selous: The Minister may have meant that debt settlements will be accepted only with the permission of the parent with care, not that of the non-resident parent.
Mr. Plaskitt: I am grateful to the hon. Gentleman for his correction. The commission will also acquire the power to sell debt should it wish to do so.
The hon. Gentleman was right to stress the importance of pursuing historic debt and the message that it sends to non-resident parents who are not compliant or considering not complying. He is also right that the commission will need to be able to demonstrate that it is doing the best possible job of chasing debt. The only point of disagreement is whether that requirement needs to be placed in the Bill, as he suggests. I argue that the responsibility on CMEC to demonstrate what it is doing in respect of debt is an adequate provision.
The amendment, although understandable given the legacy of the Child Support Agency, is not necessary because the Bill already provides for examination of the commission’s performance on debt. Clause 9 requires the commission to report on its performance across all its business activities, including action taken on historic debt. It also specifically requires the commission to report on its performance in exercising its functions “effectively and efficiently”. That, too, includes its performance on historic debt.
That is all supported by schedule 1, which requires the commission to have a committee of non-executive board members, which must act as an audit committee. That will ensure that the commission’s financial controls are of a sufficiently high standard. Furthermore, as an Executive non-departmental public body, the commission must have its annual accounts audited by the Comptroller and Auditor General, who in turn has a statutory responsibility to report the results of that audit to Parliament. The accounting and disclosure requirements of the annual report and details on accounts for Executive non-departmental bodies are set out in detail in the financial reporting manual published by the Treasury.
As I have outlined, the Bill provides a comprehensive framework for reporting on the commission’s performance in the all-important area of debt, so I urge the hon. Member for Rochdale to withdraw the amendment.
Paul Rowen: I have listened to the Minister, and this has been an important debate. As he rightly said, historic debt is of interest and concern to many people. I am reassured by what he says about the reporting requirement not going away, and I believe that many hon. Members will ensure that it does not. I beg to ask leave to withdraw the amendment.
Andrew Selous: There is a point that I should like to clarify. Am I able to press amendment No. 12 to a Division?
The Chairman: We shall be able to call a Division when we reach the appropriate moment, now that notice has been given.
Amendment, by leave, withdrawn.
Schedule 1 agreed to.
Contents Continue
House of Commons 
home page Parliament home page House of 
Lords home page search page enquiries ordering index

©Parliamentary copyright 2007
Prepared 20 July 2007