 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:Chris
Shaw, Committee
Clerk
†
attended the Committee
Public Bill CommitteeThursday 19 July 2007(Afternoon)[Mr. Christopher Chope in the Chair]Child Maintenance and Other Payments BillSchedule 1The
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.
Many of the
targets are concerned with systemic reform. Once they are achieved and
the historic legacy problems ironed out, the agency should be able to
continue operating at that much improved level without the additional
staff that were necessary to correct the long-standing problems. The
large backlog of unclear cases is now coming down, there is faster
treatment of new applications and telephony is much
improved.
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.
I also want to
pick up the operational suggestions made by the hon. Member for
Mid-Bedfordshire. I was concerned about the model she proposed and I am
not at all convinced of its workability. As I understood it
she wanted an individual caseworker assigned to each case. I think that
she will accept, on reflection, that that is not achievable or
realistic. Each case does not require constant attention. They require
spasmodic attention. Therefore, any individual caseworker will be
handling any number of cases. We do not know when an individual call
will come asking the agency to deal with a case.
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.
‘(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.
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