Select Committee on Work and Pensions Fourth Report

1  Introduction

Background to the inquiry

1. This Committee's predecessors have produced a series of reports on the failings of the Child Support Agency (CSA).[1] In 2005, for example, the then Work and Pensions Committee recommended:

"that consideration must be given to the option of winding up the CSA and plans made for an alternative set of policies that work, in order to provide financial support for children in future. We also recommend that our successor Committee considers alternative policies in the event of the CSA being wound up."[2]

2. For many people the involvement of the state in child support arrangements over the last 14 years has not been a positive experience. The CSA was established in 1993, following the enactment of the Child Support Act 1991, to assess, collect and enforce child maintenance on a formulaic basis. This was a radical policy shift which involved considerable investment in developing an entirely new administrative agency. The move was deemed necessary due to the failings of the courts in establishing fair and consistent maintenance awards, as well as problems with keeping such orders up to date and enforced effectively. While the Agency was not able substantially to improve on what was already a poor situation, it did succeed in getting money to some parents with care who had previously received nothing. However, the problems caused by the complicated calculation process under the 1991 Act in an attempt to create "fairness" are well documented.[3]

3. In order to simplify the child support system, the Government brought forward proposals in 1999 which were subsequently enacted by Parliament in Part I of the Child Support, Pensions and Social Security Act 2000. These reforms included a simpler formula for calculating child support liabilities, based on a percentage of the non-resident parent's (NRP's) net income, new enforcement powers and the promise of a better service for the Agency's customers. The new scheme did not come into force until 3 March 2003, and performed badly from the start owing to chronic problems with the IT and operational systems.[4] In particular, old scheme cases taken on before 3 March 2003 were unable to transfer to the new scheme's simpler assessment process. This left the Agency trying to administer two different systems concurrently. Even now, in 2007, the majority of the CSA's cases are still being dealt with under the old scheme.[5] Moreover, across the total of 1.4 million cases that the CSA currently handles, only 455,000 of the 750,000 non-resident parents liable to pay maintenance actually do so.[6]

4. The Secretary of State for Work and Pensions announced in February 2006 that he had commissioned Sir David Henshaw, former Chief Executive of Liverpool City Council, to lead a redesign of the child support system. Sir David's report, Recovering child support: routes to responsibility, was published in July 2006 along with the Government's response.[7] Following this the Government carried out a consultation exercise on his findings and the results of this fed into the White Paper, A new system of child maintenance, published in December 2006.

5. The White Paper represents another fundamental change in child support policy making. In recognition of the past failings it proposes that all parents, even those in receipt of Income Support or income-based Jobseeker's Allowance, should be encouraged to make their own private arrangements for child maintenance.[8] The plan is also to replace the CSA with a new body, the Child Maintenance and Enforcement Commission (C-MEC). We summarise the difference between the "old old scheme", the "old new scheme" and the White Paper proposals in a table at Annex 1.

6. The White Paper states that there should be four principles of reform, to:

i.  "help tackle child poverty by ensuring that more parents take responsibility for paying for their children and that more children benefit from this;

ii.  promote parental responsibility by encouraging and empowering parents to make their own maintenance arrangements wherever possible, but taking firm action - through a tough and effective enforcement regime - to enforce payment where necessary;

iii.  provide a cost-effective and professional service that gets money flowing between parents in the most efficient way for the taxpayer; and

iv.  be simple and transparent, providing an accessible, reliable and responsive service that is understood and accepted by parents and their advisers and is capable of being administered by staff."[9]

7. The main reforms outlined in the White Paper are to:

a)  Encourage more private agreements and remove the compulsion from parents with care claiming income support or income-based Jobseeker's Allowance to apply for formal maintenance via the CSA;

b)  Improve the quality and accessibility of information and guidance services to help parents reach private agreements;

c)  Change the formula for calculating child maintenance and base it on gross income tax data from HM Revenue and Customs;

d)  Move to a system of fixed-term awards of one year unless income differs by at least 25%;

e)  Increase the flat rate of maintenance paid by non-resident parents on benefit from £5 to £7 a week;

f)  Extend the child maintenance premium to all current CSA cases;

g)  Significantly increase the child maintenance premium;

h)  Focus on 'tougher' enforcement measures;

i)  Increase efforts to collect historic debts; and

j)  Promote 'joint registration' of both parents at birth of a child.

8. A 13 week public consultation process is currently under way and is due to be completed on 13 March. A series of nine questions have been set covering a range of topics including: advice and support services, a register of private agreements, principles and objectives for the new agency, the transition arrangements, the new formula, enforcement and debts.[10]

9. In light of the recommendations of our previous report, we are pleased to note that the Government's proposals to reform the CSA include its eventual wind-up.

10. We announced that we intended to inquire into the Government's proposals soon after the White Paper was published, in December 2006. We asked that submissions address the questions set out in the White Paper. Written evidence was sought and 18 submissions were received.[11] Given the need for our report to be published around the consultation deadline, we held three oral evidence sessions in January and early February. We would like to thank all those who contributed to the inquiry, particularly given the tight timetable we imposed, and our two advisers Professor Nick Wikeley, John Wilson Chair in Law, University of Southampton and Dr Christine Skinner, Lecturer in Social Policy, Department of Social Policy and Social Work, University of York.

11. We also had the chance to hear the opinions of those who will be affected if the Government's proposals are implemented, through a session on the Radio 4 programme "You and Yours". Listeners had the opportunity to call, email or text their comments to the programme and put their views to the Chairman. This took place shortly before we met to agree our report. The programme received a high volume of calls, and we publish a summary provided by the You and Yours team in Appendix 2 of this Report. We are very grateful to those who contacted the programme, and for the opportunity to reach a wide and diverse audience as part of our inquiry.

1   Social Security Committee, Fifth Report of Session 1993-94, The Operation of the Child Support Act: Proposals for Change, HC 470; Second Report of Session 1995-96, The Performance and Operation of the CSA, HC 50; Fifth Report of Session 1996-97, Child Support HC 282; and Tenth Report of Session 1998-99, The 1999 Child Support White Paper HC 798, Work and Pensions Committee, Second Report of Session 2004-05, The Performance of the CSA, HC 44 Back

2   Work and Pensions Committee, Second Report of Session 2004-05, The Performance of the CSA. HC 44, para 226 Back

3   Helena Barnes, Patricia Day and Natalie Cronin Trial and Error: a review of UK child support policy (FPSC/Nuffield Foundation, London, November 1998), Gwynn Davis, Nick Wikeley and Richard Young, Child Support in Action (Hart Publishing, Oxford , 1998) and Nick Wikeley, Child Support Law and Policy (Hart Publishing 2006), ch 5 Back

4   Work and Pensions Committee, Second Report of Session 2004-05, The Performance of the CSA, HC 44 Back

5   CSA Quarterly Summary of Statistics, December 2006 Table 1: 58% of cases are old scheme and 42% are new scheme. Back

6   Department for Work and Pensions, A new system of child maintenance, Cm 6979, December 2006, p 4 referred to throughout this report as "White Paper". Back

7   Sir David Henshaw's report to the Secretary of State for Work and Pensions, Recovering child support: routes to responsibility, July 2006 and A fresh start: child support redesign - the Government's response to Sir David Henshaw July 2006 Cm 6895. Referred to throughout this report as "Henshaw Report" and "Government's response to the Henshaw report" respectively. Back

8   White Paper, para 2.1 Back

9   White Paper, p 27 Back

10   See Appendix 1 Back

11   Published in Volume II of this report Back

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Prepared 15 March 2007