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Session 2006 - 07
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General Committee Debates
Child Maintenance and Other Payments

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

Tuesday 24 July 2007


[Mr. Christopher Chope in the Chair]

Child Maintenance and Other Payments Bill

Clause 6

10.30 am
Danny Alexander (Inverness, Nairn, Badenoch and Strathspey) (LD): I beg to move amendment No. 68, in clause 6, page 2, line 27, after ‘fees’, insert
‘to a person who has failed to pay an amount of child support maintenance’.
It is a pleasure, Mr. Chope, to serve under your chairmanship for the first time. This is my first contribution to these debates, but I promise it will not be my last. Having spent the last couple of weeks learning for myself the obligations of parenthood, I have been afforded a degree of time to study the evidence given to the Committee and the debates that have taken place so far.
Amendment No. 68 and subsequent amendments relate to the subject of fees and the potential of the new Child Maintenance and Enforcement Commission to charge for its services. They are matters about which there is the potential for some controversy.
I note that at point No. 10 in his written submission, Professor Nick Wikeley said:
“The question of charging fees will doubtless be controversial”.
He went on to say:
“The obvious point is that charging fees is unlikely to be effective if customer service remains at current levels.”
We will come to that when we discuss a subsequent amendment.
With amendment No. 68, I wish to probe the Government’s intentions about the circumstances in which they intend to charge fees. The note in the evidence that was kindly given to Members in a folder in advance of our deliberations is pretty opaque on the matter. Things were not made a great deal clearer when I read the oral evidence taken during the Committee’s first two sittings.
In evidence, Lord McKenzie said:
“No decision has been made on charging yet.”
However, even from the evidence, the nature and purpose of the charging regime that the Government seek to introduce was fairly fuzzy and opaque. On the one hand, Lord McKenzie said that he did not wish to
“force people—particularly low-income families—out of the system and prevent them from entering into proper and effective maintenance agreements.”
Hilary Reynolds thought that it was
“highly unlikely that charging would start before 2010”.——[Official Report, Child Maintenance and Other Payments Public Bill Committee, 17 July 2007; c. 12.]
However, that does not preclude it starting before that date, although the Government’s note on the matter is slightly clearer. Will the Minister clarify the timing on charging?
Although Lord McKenzie said that he did not wish low-income families to be penalised by charging, he also said:
“Clearly we would wish people to be incentivised to use private agreements...and therefore, I suppose, not to use the system unnecessarily if it can be avoided and if it is not appropriate.”——[Official Report, Child Maintenance and Other Payments Public Bill Committee, 17 July 2007; c. 13.]
If the purpose of charging is at least in part to incentivise people to make private agreements, the flip-side is that if the charging regime is pervasive it will serve to disincentivise people from making an application to CMEC.
The purpose of the amendment is to try to narrow the range of people to whom fees may be charged. Specifically—the Minister made this point in oral evidence—fees may be useful in cases when people such as non-resident parents fail to discharge their obligations, as the fee would be more like a penalty. The amendment suggests that fees should be payable by those who fail to comply with their obligations—in this case, by failing to pay child support maintenance.
It would help if the Minister made clear his intentions about the range of people to whom charges might be applied. Clause 6 leaves it wide open. Fees could be charged to any and all people who interact with CMEC in any way, whether parents with care or non-resident parents. They could be charged in a range of circumstances. It has been explained that the issue is not principally about cost recovery. None the less, a charging regime that leaves open the possibility that a level of charges might be introduced for all applicants, including parents with care, that is sufficient to incentivise private agreements—in other words, add a sufficient amount to disincentivise people from choosing CMEC as their first option—could be a boon to that type of charging.
Mr. Tim Boswell (Daventry) (Con): As ever, the hon. Gentleman is making a measured case. However, does he agree that, even if we do not want to tie down explicitly to the text of the Bill any instructions to CMEC, it would be unfortunate if the charging regime were to be operated penally in any way? It is one thing to give a measure of incentive, but it would be another to depart from cost structure or seek to punish individuals who chose to use the service.
Danny Alexander: I am grateful for the hon. Gentleman’s intervention. I agree with it in the sense that a charging regime must not punish people simply for their choice of interacting with CMEC. The existence of a child maintenance support system is a public good, so to charge people willy-nilly to interact with the service seems wrong. The amendment would make it clear that, in a certain category of cases of those who fail to pay an amount of child support maintenance—those who have gone through the CMEC system and have not complied with their obligations—a charge might be a useful additional incentive to encourage them to meet their obligations.
The Minister has rightly made it clear that the importance of the Bill is that it encourages those who interact with the child support system to fulfil their responsibilities. He has said continually that one of the major reasons for the failure of the current child support system is that many non-resident parents—mainly men—are not meeting their financial obligations in quite disgraceful ways. The amendment would allow fees to be charged in such cases, but it would exclude charging to be allowed in the generality of cases for all parents with care or non-resident parents.
Mr. Mike Weir (Angus) (SNP): I am following the hon. Gentleman’s argument with interest. I am mostly in agreement with him, but I am concerned that the amendment might put pressure on people to enter a voluntary agreement that may not necessarily be in their interests if fee charging is allowed and they fail to enter a voluntary arrangement. I accept his argument when people reach the stage at which they fail to honour their obligations, but I am worried that such a proposal might become a problem at an earlier stage by forcing them into voluntary agreements that are not necessarily in the interests of one party.
Danny Alexander: Perhaps I have not explained myself clearly enough. In a sense, the hon. Gentleman supports my argument. A charging regime, as the Bill allows, under which charges can be levied on all classes of people who interact with CMEC, could serve such a purpose. It could put pressure on people to enter into voluntary agreements. I do not know what level of charges the Minister has in mind. If it is to be set at £100 and there is a £10 disregard, it could effectively be 10 weeks’ maintenance for a benefit case and a significant disincentive.
The purpose of the amendment is to say that charges should not apply automatically just because a person has applied to CMEC if the voluntary agreement had fallen through, for example. Charges should apply only when a person has been through the CMEC system and the non-resident parent has been asked to pay money. If, in such cases, the non-resident parent has failed to pay the child support maintenance to which he is obligated, charges could then apply. In other cases, they would not.
Mr. Weir: I am not necessarily opposed to the amendment, but is there not a danger that the fees will become an add-on to the existing arrears? Does it necessarily help the parent with care to get the money? Will the hon. Gentleman make it clear that the situation in which the maintenance is paid first and the fees separately would only come into play after the parent with care has received any maintenance that is due?
Danny Alexander: I am grateful for that intervention. I intend to go on in the subsequent amendment, which I know that the hon. Gentleman supports, to make the wider case against the fees. I cannot imagine that any Committee member would disagree with the argument that the payment of maintenance should take precedence over the payment of fees. Will the Minister say whether that is the Government’s position as well?
Mr. Mark Harper (Forest of Dean) (Con): I want to pick up on one area that the hon. Gentleman referred to. In our evidence-taking sessions, we asked the Minister, Lord McKenzie of Luton, what split of cases the Government wanted to see going to the Child Maintenance and Enforcement Commission versus going to private arrangements. In that discussion, he confirmed that the Government had no intention of using the fee-charging structure to reach a particular target or split of cases between CMEC and the voluntary arrangements. He said:
“We want to use them”—
presumably the fees—
“to encourage people to make choices that leave them in a position that we and they believe is right.”——[Official Report, Child Maintenance and Other Payments Public Bill Committee, 17 July 2007; c. 20.]
That indicates that CMEC has no guide to the purpose of the fees. They are clearly not about cost recovery. That was ruled out in the evidence given by Hilary Reynolds. The Government do not appear to have a view about the number of cases that use CMEC versus a private arrangement. CMEC is not being given a steer about how to set fees or what the purpose of the fees is—in fact, it is getting no guidance at all.
The Minister needs to be clear about the purpose of the fees. If the purpose is not cost recovery, there must be some other point. One cannot separate setting the fees against the incentive or disincentive effect that they are going to have. By setting the fee, we are implicitly making a judgment about the extent to which we wish people to use CMEC. I do not think that we can separate those two issues. There is a fundamental confusion, which the Minister needs to address.
The Parliamentary Under-Secretary of State for Work and Pensions (Mr. James Plaskitt): Once again, it is a pleasure to have you chairing our proceedings, Mr. Chope. I am grateful to those hon. Members who have spoken in the debate and for the points raised by the hon. Members for Inverness, Nairn, Badenoch and Strathspey and for Forest of Dean, which I will try to cover in my response.
Let me begin by pointing out the importance of clause 2(1), which we discussed before. Any decision about fees that CMEC might make in the future has to be made in the context of the overall objective, which is clearly set out in clause 2(1). Any test that might be applied to a proposal to have fees will have to be run against that objective.
The hon. Member for Inverness, Nairn, Badenoch and Strathspey raised the concern that the charges might become penal or that they might disincentivise people or produce undesirable outcomes. In that case, the commission will not be meeting its obligation under clause 2(1). Therefore, it is an important part of the test.
Mr. Boswell: I do not wish to disagree with the Minister about that because I think that it is clearly what we all wish. Does he not agree that as a matter of administrative law, the commission as a public body will always and at all times have to act reasonably—it will not want to attract attention from judicial review—if it sets the level of fees at any level which could at least arguably be seen to be unreasonable as far as the individual is concerned?
Mr. Plaskitt: That is quite a legitimate point. It puts further constraint on the commission’s discretion to introduce or consider any fee regime.
Danny Alexander: The Minister is being reassuring, as he is wont to be, which is—
Mr. Boswell: Reassuring.
Danny Alexander: Exactly. I am grateful to the hon. Gentleman.
It was clear from the evidence of the Minister’s colleague, Lord McKenzie, that one of the motivations behind the power to charge is in relation to incentivising private agreements. However, for every incentive there is an equal and opposite disincentive. How does the Minister intend to get the balance right? If private agreements are genuinely incentivised, how will he prevent the charges disincentivising people from going to CMEC when they need to?
10.45 am
Mr. Plaskitt: I shall come to that after I have dealt with some of the other interventions.
The Government recognise the importance of ensuring that a charging regime does not dissuade vulnerable or low-income parents from applying to the commission in the first place. Indeed, I remind Committee members that the White Paper said that
“the clear burden of charging should fall on the non-resident parent and not the parent with care.”
We would expect any charging regime put forward by the commission to reflect precisely that. I remind the hon. Gentleman that any charging regime must first secure the approval of the Secretary of State. That will be followed by a further check on any proposal, which I shall come to in a moment.
Charges may be incurred for a variety of reasons. The intention is that the majority of them, such as penalties for late payment and enforcement measures, will fall only on non-resident and non-compliant parents. However, in a few situations, allowing the commission to charge a fee at an early stage of the process—possibly to both parents—might provide it with a tool to help it achieve its objectives, of which I reminded the Committee at the outset.
Mr. Boswell: I thank the Minister for giving way again, but members of the Committee must be clear on this matter. He mentioned charges for late payment. We know from our constituency casework that one of the defects of the current arrangements is that money has been collected from the non-resident parent but for some reason has not found its way through the agency to the parent with care—for example, either an employer is delinquent or there has been an administrative glitch. Will the Minister assure us that CMEC will do its level best to ensure that no arbitrary charge is levied on those who are not being delinquent but who have merely been caught up in an administrative problem?
Mr. Plaskitt: I am happy to give that reassurance. We are making the changes precisely to achieve that degree of improvement in performance and we have been making that stipulation for such circumstances.
I referred to circumstances in which fees might be applicable, and it might be possible to envisage a small application fee coming into the process, as is the case in a number of other child maintenance systems in other parts of the world. That might encourage both parents to consider whether a voluntary arrangement might be more effective for them.
Above all, we consider it too early to put a restriction in the Bill, as the amendment would do. I would not want to fetter the commission in any way at this stage, in terms of proposals that it might make in respect of charges. It is important to give the commission the option of putting forward proposals on charges and not to say that charges in respect of certain things cannot be considered. The details of any charging proposals that might come forward would be more appropriately laid out in regulations. That is because the commission should play a key role in finalising the detail, and also—the hon. Member for Inverness, Nairn, Badenoch and Strathspey sought reassurance on this—because fees will not be introduced until 2010 at the earliest, and then only as clients move into the new system.
I hope that I have reassured the Committee that all regulations made under the clause in respect of fees will be subject to affirmative resolution; that is the second lock on the process. First, any proposals must secure the Secretary of State’s approval, then they must go through the affirmative resolution process, under which they would be subject to additional parliamentary scrutiny.
I hope that I have given hon. Members the reassurance that they sought on fees and that it is sufficient to encourage the hon. Gentleman—whom, incidentally, I must congratulate on becoming a parent—to withdraw the amendment.
Danny Alexander: I am grateful to the Minster for his response and final remarks. His reassurance has certainly satisfied me and I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Danny Alexander: I beg to move amendment No. 84, in clause 6, page 2, line 27, at end insert—
‘(1A) The Secretary of State may only make regulations under subsection (1) when he is satisfied that the Commission is capable of providing a satisfactory service to parents and children in terms of its duties under this Act.’.
Although the Minister offered reassurances on the way in which the Government intend to decide how charges could be applied, a much broader issue needs to be raised in relation to the charging regime, and the amendment seeks to do that. It relates to the evidence that the Committee heard from Professor Wikeley, who said that the obvious point is that charging fees is unlikely to be effective if customer service remains at current levels.
The amendment seeks to establish on the face of the Bill an equation between the ability to introduce charges and the ability of the new organisation to deliver its services competently, something that has been sadly lacking from the current Child Support Agency regime. That was debated in earlier sittings, but I make no apology for returning to it.
I noted the Minister’s comments about morale among CSA staff in an earlier debate about improvements under the operational improvement plan. That is obviously important, and I would be interested if he were willing to lay before the House—perhaps in the Library—a copy of the recent staff survey that Lord McKenzie referred to, so that members of the Committee can see in detail the opinions of staff on the range of issues that are, no doubt, pertinent to this amendment and others.
Morale among CSA claimants, rather than staff, would be a better measure of the degree to which it is performing its functions effectively, although I do not think that I need to go through the evidence in detail.
Mrs. Nadine Dorries (Mid-Bedfordshire) (Con): I totally agree with the hon. Gentleman’s comment that the morale of the claimants would be a good measure of effectiveness. As he said, the morale of staff is also important, but another good measure would be how often hon. Members have to use the hotline, should the hotline still be available when the new service is in place. I would like the Minister to reaffirm whether hon. Members will still have access to the hotline because, unfortunately, in cases of desperation, we need to use it frequently.
Danny Alexander: I hesitate to speak for the Minister on those matters, although I note that, in the evidence session, his colleague in the Lords, Lord McKenzie, made clear that the MP hotline would continue. Without wishing to speak for the Minister as a matter of habit, I hope that I have made that point clear. However, the wider point that the hon. Lady made is absolutely right. The amendment, which would establish an equation between the competence of the organisation and the ability to level fees, would allow a much wider range of measures to be employed. It is not simply a matter of competence.
On Second Reading, hon. Members on both sides of the House referred to the hard-working nature of the staff and the fact that many of them are talented, competent and yet are struggling under the weight of a system that has been incompetently devised. I am not sure that the new system will mark a huge improvement on that, but we will, no doubt, come to that as we work through the Bill. That point is important. The major reason why we are in Committee debating the Bill is that the current system has been such a hideous failure for so many of our constituents, and every hon. Member in the Committee will have had dreadful experiences with that at a constituency level. The Minister, in his closing remarks, seemed slightly firmer on the introduction of charges in 2010 than we had previously allowed—he made it clear that charges would be introduced in 2010 at the earliest. It would be interesting to know whether he intends to introduce the regulations in 2010 or whether he does not yet know. I suspect that he may say that that is a matter for the commission.
In any case, if the level of competence and administrative efficiency in CMEC and the legacy organisations has not improved, introducing charges would add insult to injury to users. For people who have suffered for many years from not having their maintenance obligations effectively dealt with, levying charges would be hopelessly wrong if the new organisation is unable to meet the higher standards set by the Minister. Because of that, I want to return to the questions that were raised about staffing levels in the organisation.
Significant falls in the number of staff are planned during the 18-month period that concludes next year. The Minister said that those reductions relate to the operational improvement plan that is currently being implemented, which he said has been through its peak phase and is now winding down. I would be interested to hear about any evidence that suggests that the operational improvement plan has been successful because it would cut to the burden of the amendment, which concerns the administrative efficiency and competence of the organisation.
From a constituency perspective, the Minister has been helpful with a particular case and I remain grateful for his assistance. In all too many cases that are less complicated and unique than that one, I cannot say in all honesty that I have noticed a great deal of improvement in the past 18 months. Other hon. Members may have had different experiences. In my experience, it is extremely hard to find out what is happening in cases that end up in the Bolton special case unit.
John Penrose (Weston-super-Mare) (Con) indicated assent.
Danny Alexander: I notice that the hon. Gentleman agrees. I remain of the view that, with the significant staff reductions that are planned, there is a risk that performance in the child support system could go from bad to worse. The Minister will no doubt disagree with that, but he ought to agree with the purpose of the amendment. He has regularly made the point that the creation of the new organisation is a major shift, not a re-badging or re-branding exercise. The reason why he presents it as a major shift is that he is trying to change the culture and operation of the organisation. If that is his objective, I hope that he will support and welcome the amendment because it would allow a mechanism for proving his faith.
John Penrose: The amendment would bring about an assessment of the overall or average level of competence. The hon. Gentleman made the point that if CMEC falls below an average level of competence, it would add insult to injury to levy charges. However, does he accept that the experience of the Child Support Agency has been that different classes of case pose different levels of difficulty? Therefore, measuring an average level of performance does not address the problems that people are experiencing because some classes of case are more likely to be swallowed up by the black hole that is Bolton. It may be necessary to table an amendment so that the assessment of whether charges are acceptable would assess not only the average level of performance, but individual levels of performance in specific cases. If CMEC falls below an acceptable level of performance, it may be necessary to think about reimbursing charges that might be levied on those specific occasions.
Danny Alexander: I am grateful for that intervention—the hon. Gentleman makes an important point. While it is not specifically within the scope of the amendment, I hope that the Minister will take it on board. In his earlier response, he made it clear that one option is for charges to be levied in certain categories of cases, rather than more generally.
11 am
Concerns have been expressed about individuals who use the CSA in a vexatious way in order to apply pressure to the other party, or other cases in which there is non-compliance. Those are precisely the sort of cases to which the hon. Gentleman has referred. They are often the more complicated cases in which things are more likely to go wrong in the administrative system, without the safeguard that he proposes. I hope that the Minister will respond to that, and particularly to the point about cases in which the individual has been let down by the administration and in which charges should either not be levied or be reimbursed. That is absolutely right.
It would be monstrously wrong for CMEC or the CSA to say, “We are going to levy charges, even though we have got it horribly wrong in your case.” Sadly, that is the experience of far too many people throughout the country. That is why Janet Allbeson of One Parent Families expressed in her evidence to the Select Committee her concern about the introduction of charging by saying:
“let us put charging on hold; let us see how the system beds down; let us see who is using the new system and why they are using it and then think about charging and how that fits into it. It is too early, and can just antagonise people and create unnecessary tension and aggravation.”
It is in precisely the sort of cases referred to by the hon. Gentleman that unnecessary tension and aggravation will be felt particularly strongly. In making a general assessment about the performance of the organisation, we must consider not only the amendment, but performance in specific cases when deciding whether or not charging is appropriate. I look forward to the Minister’s response to the important equation that we seek to establish.
Mr. Boswell: I rise to reflect on the matter, rather than to reach a substantive conclusion, and I have a number of points in mind. The first basic point is that we would not be debating the Bill, if the CSA were doing its job at the moment. We know that radical change is required, and that change must be towards competence and satisfactory performance. That is self-evident and is no reflection on the individuals, who are doing their best, or on many of the people who pass through its portals.
As a kind of mind game—I suppose it is the type of game that one plays in a glide-path towards the end of a parliamentary career—I occasionally fantasise about the Minister’s objections. I will do that on the grounds that I may be more terse than he is. I do not advise him to accept the amendment as such, but I speak in spirit rather than in detail. We are delighted to have the hon. Member for Inverness, Nairn, Badenoch and Strathspey back in Committee, all the more so as I now realise why he was away.
My first objection—I will be rude to the Minister for a minute—is that many of us are somewhat cynical about certification by a Secretary of State in any matter, whether it involves compliance with legislation on human rights or otherwise. The amendment would effectively require the Secretary of State or, more realistically in an individual case a junior Minister, to certify that there was a satisfactory performance.
My second point, which is more helpful to the hon. Gentleman, is that however good CMEC is, it is not the only party to the transactions. The matter depends on the compliance and behaviour of other people and frankly, one of the problems is that many parents who are absent or non-resident have no intention of complying, however hard we try. It is offensive to people, not least to those who are trying to care for their children, when that situation arises, and I fully understand the Minister’s wish to pursue such matters.
I have some subsidiary concerns. Capability is not necessarily the same as performance. Even if the commission is capable of performing a satisfactory service, it does not necessarily do so in every particular case. Similarly, it might deteriorate having reached certification by the Secretary of State on the back of its fees. Those are substantive issues.
The nub of the argument is what is a satisfactory service. We must expect the new commission to perform in a satisfactory way in the great majority of cases. Our concern, and the reason for the new measure, is that the present agency does not perform adequately in the broad mass of cases and performs execrably in a minority of cases. What is needed is a normal performance—a default function that works—and for proper attention to be paid to individual cases which, because of their category or an administrative glitch, do not work. Only then can the Minister claim success. The inference of the amendment, with which I agree, is that at that point, and on that basis, it is reasonable to start charging.
It is worth spending some time on certain issues: first, we should not be trapped by a date. As One Parent Families said in evidence, there should be a perception that everything is working and is in a stable state, and that the problems are finite and manageable. It may then be appropriate for a fee to be charged. Those are perfectly sensible criteria.
Secondly, there must be an understanding at that point that individual difficulties that arise—God knows, they arise with applications for passports, driving licences and so on—can be handled satisfactorily. I would have thought it self-evident that fees should not be charged, or should be rebated, when there has been a failure of service, especially when the service is generally satisfactory. The Minister needs to go a bit further in relation to compensation. Privately, I have always been a bit uneasy that the existing agency, faced with evidence of its failure in a particular case, tends to say, “We were right to check the 50 quid and tell the person it is a compensation payment,” which is not necessarily always appropriate. It is not as good as fixing the system.
The Minister needs to consider not only the return of fees but compensation, when appropriate. We touched on, but did not explore, the function of CMEC and its responsibilities to its customers in respect of its ability to be sued, for example. If someone had to make a private arrangement and it had been validated by a lawyer, that lawyer would be liable in respect of professional negligence and so forth. If CMEC is the broker of these arrangements, albeit the broker of last resort, it has an obligation to deliver properly.
We know exactly what the hon. Member for Inverness, Nairn, Badenoch and Strathspey is arguing for, and it is a worthy aim not to rush into things and not to charge fees where there will clearly be continuing come-back. It is important that when fees are charged there is a good reason for it, and they should not be a loss leader. We should not regard fees as an excuse for not paying the maintenance, which must be the first charge on anyone who is contributing. There should be stability, and a proper regime for redress in cases of failure. I am sure that that is what the Minister wants to achieve, and it is the Committee’s duty to spend a little time encouraging him to do so.
Mr. Weir: I want to make a few brief points on the amendment. We are here in the first instance because of the failure of the Child Support Agency and the point made in Sir David Henshaw’s report that a clean break is needed. However, I fear that introducing fees will add new complexity to an already difficult situation. The Bill states that the Secretary of State may make regulation to introduce fees, when he is satisfied that the commission is capable of providing a satisfactory service.
The Minister has already accepted that the CSA is not fit for purpose, hence the Bill. However, I draw a parallel with tax credits, when Minister after Minister stood up in the House and said that there was nothing wrong and everything was working fine, in the teeth of evidence from hon. Members on both sides of the House who had problem after problem with tax credits. Although I have every faith in the Minister, we need an independent assessment of when the agency is performing satisfactorily.
Mr. Boswell: Would the hon. Gentleman like me to describe my discussions with my local welfare rights office the other day? We produced a precise contrast between the means-tested benefits, notably tax credits, which were generating a huge amount of casework, and the very small number of cases where there was an entitlement, such as to a pension, and where administrative issues do not normally seem to arise.
Mr. Weir: The hon. Gentleman makes a very good point. My point concerns the system and how we decide when it is working satisfactorily. We all agree that the CSA, despite the best efforts of most of its staff, is not working in a satisfactory manner, and there are many reasons for that. The hon. Member for Inverness, Nairn, Badenoch and Strathspey mentioned the number of staff. There are obviously resources implications, as there have been from the outset, and there are IT problems. There is a host of problems, which has undermined public confidence and the confidence of most MPs in the CSA.
We all want CMEC to be different. We want it to work and to provide a better system. The priority must therefore be to get CMEC up and running, working well and enjoying the confidence of both non-resident parents and parents with care. I was interested in the Minister’s statement, which gave the impression that CMEC may be considering introducing charges from a fairly early stage. That would create unnecessary complexity and would lead to disagreement between parties.
There is also the problem of the level of fees, on which there has been no indication as yet. I appreciate that that is a matter for CMEC, but unless the fees are on a staggered basis, they may not mean much to someone who is earning a reasonable amount of money. For someone on low income or on benefit, however, they may make a huge difference to the level of child maintenance.
Fees are a cul de sac that we should not go down at this stage. The better enforcement that is promised by the Bill is a better way of ensuring that those who are liable to pay child maintenance will pay it. Fees should be considered only once we are all satisfied through an independent appraisal that CMEC is doing its job and that it is making things better for parents with care and children.
Mr. Harper: I have three relatively brief points. What assessment has the Department made of the relative cost of entering into private agreements? Clearly, if a private agreement is a relatively straightforward standard agreement that can be downloaded from the internet and entered into without taking legal advice, it will be fairly cheap. On the other hand a private agreement that meets the requirements of both parents as well as those of the children could be more costly. That needs to be taken into account when setting the level of fees.
If entering into a private agreement is relatively expensive and the fee is not set at an equivalent level, people will use CMEC instead of using private agreements. That will lead to a situation that the Government have said that they do not want, namely CMEC being the default mechanism. The other thing that is not really laid out is whether any fee structure that is set up will involve a flat fee, a fixed monetary amount, a means-tested amount or a figure linked to the income or amount of maintenance. What is the Minister’s view?
11.15 am
I have asked that because, according to the graph in the regulatory impact assessment showing the number of cases and the level of maintenance, the majority of cases involve amounts of money that are not very large, although they are a lot for the parent with care. If the fees are high enough to have any effect, they will be significant compared with the amount of maintenance in the vast bulk of cases, but very small in the smaller number of cases that involve a significant amount of maintenance. Does the Minister intend to structure the charges so that they vary according to the income of the parent?
Mr. Plaskitt: Hon. Members have raised a wide range of points. I was going to reassure the hon. Member for Mid-Bedfordshire that there is, of course, going to be access for MPs pursuing constituents’ cases, but she has gone.
The hon. Member for Inverness, Nairn, Badenoch and Strathspey raised a number of points. First, he asked whether I could place the recent staff survey before Parliament. Yes, I shall be more than happy to do that. Then he spoke about staffing. He knows that we have increased staffing levels in the agency in recent years as part of the operational improvement plan to deal with a considerable legacy of issues and problems in the agency. A concerted effort is taking place during the three years of that plan to resolve those problems before we move on to the new commission arrangement, but this is only the first year of the plan. The agency, in common with other parts of the Department, has a mission to achieve head-count numbers.
We envisage that numbers will reduce gradually as we implement the head-count plan. That should take the numbers back, broadly, to where they were before the boost to staffing levels associated with the operational improvement plan. The hon. Gentleman should remember that if the OIP does what we expect it to do, a lot of issues will be removed from the agency, and as we move into the new arrangement there will be different levels of people coming into the statutory system. It will be for the commission, once it is set up, to decide the staffing level that is appropriate for it to run the services that it is deemed to have to run. It is important to understand that the current trajectory on staffing numbers does not presume decisions that the commission will make, and the hon. Gentleman should not do so either. The numbers that are published relate to the agency and to the head-count plan that applies to the Department.
Danny Alexander: The Minister rightly enjoins us not to make assumptions about CMEC staffing levels. Does that imply that resources would be made available should the commissioner and his board at CMEC decide that they need more staff? The Minister makes the point that one year into the operational improvement plan, staffing is on a downward trend that is expected to go through to March 2008. The reduction is significant. Does he have early evidence that he can give the Committee on whether, in that first year, the operational improvement plan has succeeded to the extent that a reduction of 2,000 staff by March 2008 can be justified?
With the operational improvement plan, we are focusing on the outcomes in terms of the agency’s performance, which is the important thing to keep an eye on. As the problems are resolved and as the IT releases go in, a lot less will have to be done clerically. That will facilitate a reduction in head count without jeopardising the continuous improvement in the performance of the agency that we are looking for.
The hon. Member for Inverness, Nairn, Badenoch and Strathspey and others have raised concern about the situation in Bolton, and I hope that I can reassure them. Thirty-four thousand of the most complex cases in the agency were transferred to Bolton for a concerted drive to try to tackle them. That is a tough job, and I willingly accept that there have been difficulties in the early phase of the operation. I will not dwell entirely on those cases, but I will return to them in a moment. The fact that those 34,000 really tough cases have gone to Bolton means that agency staff who were dealing with them are free to deal with other cases, which is helping to improve performance.
We want to see results coming out of the Bolton mission, but it is early days. So far, it is administering £15 million in additional maintenance payments as a result of focusing on those problems. Again, part of the solution is getting the IT right, and there are further releases to come for the Bolton operation this year, which should help in getting on top of the situation.
The hon. Member for Daventry asked about the compensation scheme, which will continue essentially as it is under CMEC. However, it is open for CMEC to consider, in the light of its operations as it comes into being, whether it wants to make further changes. At this stage I envisage it taking on the existing compensation scheme.
The hon. Member for Angus asked, in connection with the amendment, how we will know how the commission is doing. He wanted to know whether we can assess its performance before it comes back to us or to Parliament asking to implement any fee charging scheme. When discussing clause 9, we will look at the reporting system and the annual report that the commission must make. There are amendments that we will debate, but it sets out the framework of how the Secretary of State and Parliament will have a regular check on how the commission is doing against the performance criteria in the Bill. Therefore, there will be a way of measuring how it is doing against its objectives. However, I agree with the hon. Gentleman that the critical thing is to get performance, delivery to clients and enforcement right. That is what we need to keep our relentless focus on. That is the point of the fundamental change and the clean break that we are making with this Bill.
The hon. Member for Forest of Dean raised some interesting points about fees. He wondered whether behavioural impacts will arise from the structure of fees. I am sure that that will happen, and that is one of the issues that the Commission will have to think about, if it chooses to come forward with a proposal for fees.
Mrs. Dorries: Will the Minister give way?
Mr. Plaskitt: In a moment.
One of the things that we will want to see is its assessment on the potential behavioural impacts of any fee structure that it proposes. It goes without saying that we would not be inclined to support a fee structure that has detrimental or adverse impacts. The hon. Member for Forest of Dean asked whether the fee structure will be flat, varied or means-tested. That is entirely an issue for the Commission, so I repeat to him that any fee proposals that the commission comes forward with are subject to affirmative debate in Parliament, so they will get intense scrutiny before they are implemented. That will be the point at which we can look at the questions that he has raised, should the situation arise.
I shall give way to the hon. Lady, but first I repeat the answer that I gave to her earlier question, while she was out of the Room. She asked whether MPs will continue to have access to the systems to pursue cases. Yes, they will.
Mrs. Dorries: I thank the Minister for that answer. I was trying to make a wider point, because he gave that answer in the evidence session.
With regard to the fee structure, I have a practical suggestion. Can the new scheme be given a six month run-in period while we see how it beds down before the fee-charging scheme is introduced later? I mention that because of particular cases involving fathers who are very difficult to track down. When such fathers are tracked down, it is very difficult to get payments out of them. I am worried that those people will disappear altogether. Could we not see how the system beds down, and then introduce the fee-charging scheme?
Mr. Plaskitt: I am afraid that I cannot agree with that suggestion, for a very simple reason. It is important to understand the principle on which we are making these changes. We are moving to a commissioning basis in the system of child maintenance. I really do not want to fetter the commission in the decisions that it is going to make. I understand why the hon. Lady has said that, and I am sure that a whole host of suggestions about making various changes will be made. However, the more that we hem in the commission, the less clean a break it will be. That is how it has to be, and I want those decisions to rest with the commission.
As I have said, if the commission comes forward with fee-charging proposals, it will need the approval of the Secretary of State and an affirmative resolution from Parliament. It is not as if the subject is being lost from scrutiny and that there will be no opportunity to raise the points that the hon. Lady has mentioned—far from it. I want the initiative to rest with the Commission, which is the point of the change.
Mr. Boswell: Although I fully understand that the Minister does not want to hamper or fetter the commission in coming up with any fee-charging scheme, or in the general discharge of its functions, would he mind if I put down a marker on the question of costs? The clause, as drafted, has a cost-related fee structure, but does the Minister agree that it is very important that CMEC at least gets a grip on its costs in individual cases, in particular categories, and at the margin in pursuing individual cases? Unless it understands that structure, even if it does not reflect it in the unit charge, it will not be able to manage its job or discharge the work efficiently overall.
Mr. Plaskitt: I understand what the hon. Gentleman is saying, and I potentially agree with him. I refer him back to clause 3, which we debated last week. It includes an obligation to the commission to
“exercise its functions both effectively and efficiently”.
One of the tests whether it is functioning efficiently is the way in which it spends its money and handles its costs. I agree with him, and the opportunity for us to assess that is already covered by clause 3.
I shall now return to the core of the amendment, on which the debate hangs. The amendment poses some difficulties, although I understand why it has been tabled. It would require a subjective test of the capability of the commission and of what constitutes a satisfactory service. Any view that the Secretary of State takes on those matters could be open to challenge, which would threaten the validity of any regulations then brought forward.
The amendment would potentially stop the introduction of fees until the new scheme is up and running, when a clearer assessment of the commission’s ability to provide a satisfactory service is possible. That would prevent the commission establishing fees as an integral part of the new scheme. That might be what the hon. Member for Inverness, Nairn, Badenoch and Strathspey wants, but such fettering of the commission is not appropriate at this stage.
11.30 am
Let me add, however, that the Child Support Agency charged fees between 1993 and 1995. The regulations allowing them to be charged were revoked, partly because the service that the agency provided at the time was simply not good enough to justify charging a fee. The commission will have that experience in mind when it considers arrangements for any future charging regime and its timing. That will be borne in mind not only by the commission, but by Ministers, and Parliament will bear that precedent in mind if and when charging regulations are laid and considered under the affirmative procedure. Given those reassurances and reminders, I hope that the hon. Gentleman will withdraw his amendment.
Danny Alexander: We have had a good debate and some important points have been made. I should have referred to the experience of charging by the CSA in my opening remarks. The Minister rightly made the point that charging was withdrawn because of issues of effectiveness. Notwithstanding his assurances, I believe that the Bill would be improved by the amendment and I therefore seek to test the Committee’s opinion.
Question put, That the amendment be made:—
The Committee divided: Ayes 9, Noes 10.
Division No. 6 ]
Alexander, Danny
Boswell, Mr. Tim
Dorries, Mrs. Nadine
Harper, Mr. Mark
Jackson, Mr. Stewart
Penrose, John
Rowen, Paul
Selous, Andrew
Weir, Mr. Mike
Clapham, Mr. Michael
David, Mr. Wayne
Engel, Natascha
Griffith, Nia
Hesford, Stephen
James, Mrs. Siân C.
McCarthy-Fry, Sarah
McGuire, Mrs. Anne
Plaskitt, Mr. James
Turner, Dr. Desmond
Question accordingly negatived.
Mr. Plaskitt: I beg to move amendment No. 57, in clause 6, page 2, line 38, at end insert—
‘(3A) The Secretary of State may by regulations provide that the provisions of the Child Support Act 1991 (c. 48) with respect to—
(a) the collection of child support maintenance,
(b) the enforcement of any obligation to pay child support maintenance,
shall apply equally (with any necessary modifications) to fees payable by virtue of regulations under subsection (1).’.
The amendment clarifies the intention behind clause 6(2)(f), which enables regulations to include matters relating to the recovery of fees. The amendment is modelled on section 47(4) of the Child Support Act 1991. Fees will not be an effective tool if they cannot be enforced, which is why the clause originally said that regulations could provide for the recovery of fees. However, we felt that the intent of the provision might not be clear enough, which is why we tabled the amendment.
I am sure that hon. Members remember that section 47(4) of the 1991 Act specifically states that enforcement powers shall apply to fees. However, that section will be repealed with the creation of the new fees provision. Despite the reference in clause 6(2)(f), it could be argued that in its current form the new fees clause does not give the commission the ability to use enforcement powers to collect fees. That is not the intention, so for the avoidance of doubt I am moving this amendment.
The amendment makes no substantive change to the Bill. It simply makes it expressly clear that the enforcement powers available to the commission, including those set out in part 3, may extend to the collection of fees. However it is recognised that some enforcement powers are not proportionate to the collection of fees—I refer to measures that we will come to later such as the removal of passports, curfew orders, commitment to prison, and disqualification from driving. These powers are clearly intended to be used for the collection of unpaid maintenance payments. I assure the Committee that we do not intend to use them just for the collection of fees, and restrictions to that effect will be placed in regulations.
It is appropriate to set out the exact details in secondary legislation, as it will allow any restrictions placed on enforcement measures to be developed as an integral part of the charging regime to which they relate. However, I reiterate the importance we attach to ensuring that the measures are used appropriately. Members of the Committee will of course have the opportunity to scrutinise all regulations made under clause 6; again, they will be subject to affirmative resolution.
Mr. Boswell: I do not want to cavil with the Minister’s intentions, not least when he is reinstating a piece of interesting Conservative legislation. However, one thing has changed. The amendment mentions
“enforcement of any obligation to pay child support maintenance”.
We are bound to focus on CMEC—a public body, albeit in a different form—and the obligations that it may impose. Does that power extend to any obligation that the parties may have undertaken in relation to a private agreement—one that has not been through CMEC—or to any other kind of obligation on the parties? I suspect that widening the means of collection rather than making it exclusive to the Child Support Agency may cause a slight difficulty.
Danny Alexander: I wish to make one brief point. The Minister made it clear that these sensible and proportionate provisions are necessary to ensure that the Bill operates as the Government intend. Under paragraph (b) of the amendment,
“the enforcement of any obligation to pay child support maintenance, shall apply fees payable by virtue of regulations under subsection (1).”
Will the Minister clarify whether using the enforcement powers to collect fees will apply only when maintenance is also being collected? For example, if someone has started to pay maintenance but for some reason refuses to pay the fee, can those enforcement powers, which are to be used for the collection of child maintenance, be used to collect the unpaid fee? I suppose that a fee could be levied even in cases where there is a nil maintenance assessment.
Mr. Boswell: As we begin to tease out this issue—subsection (1) makes it clear that it is about the agency—I have it in mind that the agency may nevertheless be required to pick up on private arrangements in which maintenance is not being paid. The question is whether it can charge fees retrospectively, as if were, on that portion of unpaid maintenance that was missed before it became directly involved?
Danny Alexander: I hope that the Minister will explicitly rule out the circumstance described by the hon. Gentleman, as I am sure that it would be against the Government’s intentions as set out by the Minister. I am trying to understand whether the provision would allow the enforcement powers to be used to collect fees when no maintenance was being collected through the enforcement process.
Mr. Harper: I want to make a brief point about the welcome intention that the Minister outlined when introducing the amendment. The amendment refers to the fact that the regulations to be used to collect fees shall apply equally, with any necessary modification. I listened carefully to what the Minister said about not using the enforcement mechanisms disproportionately to collect fees, so the use of the phrase “shall apply equally” seems to me to state the opposite intention. Given that that will be in the Bill, and the Minister’s comments will not, I wonder whether a different wording might be more satisfactory.
Mr. Plaskitt: I shall reply briefly to the points that have been made. The hon. Member for Daventry is seeking to extend the policing powers of the commission into private agreements. That is not what we intend to do. The answer to his question is that fees will not be levied in respect of private cases.
The hon. Member for Inverness, Nairn, Badenoch and Strathspey wanted to know whether enforcement powers could be applied just to fees. No, they could not.
The hon. Member for Forest of Dean wonders why the phrase “shall apply equally” is included. It is to ensure that the legal basis for taking action to pursue maintenance, is also available to pursue fees. Of course, it is restricted in terms of the powers that will be used in the way that I have clarified.
I hope, with those reassurances, that the Committee will accept the amendment.
Amendment agreed to.
Clause 6, as amended, ordered to stand part of the Bill.
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