The 6 year rule, maladministration
and compensation
275. There is no reference in the White Paper to
the substantial part of the debt which is legally unrecoverable
- i.e. debt more than 6 years old. The CSA originally had no powers
to obtain a Liability Order in respect of debts that were more
than six years old.[311]
New regulations introduced last year removed this limitation period
but only in relation to amounts that became due after 12 July
2000 (i.e. amounts that were not already time-barred at the commencement
of the new Regulations).[312]
276. Therefore, while there is now no six year time
bar, some arrears have already become time barred by the elapse
of time (for example, if liability started in April 1993 and the
CSA did not obtain a liability order until April 2000, then the
arrears up until April 1994 would be statute-barred). According
to a 2006 National Audit Office report, this amounts to about
£760 million, and the only way this debt can be collected
in the future is if the "non-resident parent [becomes and]
remains compliant and agrees to pay the debt back."[313]
Directly, referring to this £760 million, Stephen Lawson
in written evidence said "[in] many cases it seems there
has been Agency maladministration, which has caused financial
loss. The CSA should be taking proactive steps to make compensation
payments to parents with care who have lost money as a result
of CSA maladministration."[314]
James Pirrie from Family Law in Partnership warned:
"Lawyers groups now expect to pursue full and
fair compensation where maladministration can be shown. This
will radically increase the fairly minimal levels of compensation
now being paid and will consume significant amounts of Agency
resource in dealing with these historic cases."[315]
277. Janet Allbeson from One Parent Families said
in oral evidence:
"In a lot of cases some of this money is uncollectible,
due to the agency's own incompetence, and its own maladministration.
There are debts that are more than six years old worth £760
million sitting there that they cannot enforce. We also know
that one of the reasons they were not able to bring cases on to
the new system was because the data on which those cases are based
is dodgy. In a sense, it makes it very hard to enforce because
they cannot justify the debt. That is their own problem, and
what we say is if you are going to clear this amount of historic
debt you could do it by setting up some sort of compensation system
where they have been at fault, and maybe that is the way out.
We do not think they can just ignore it and hope it goes away;
they have got to face up to the fact that quite a lot of that
debt is caused by problems that they have had. That money is
legally owed to lone parents [
] there has also got to be
some kind of compensation for the sad history of the agency and
those parents who have lost out as a result - and children, of
course; a whole generation of children has grown up without the
maintenance that they were owed."[316]
278. Resolution pointed out that there are already
procedures in place to compensate where maladministration by the
DWP or its agencies can be proven:
"the [DWP] has its own guide called Financial
Redress from Maladministration. It is not mentioned in the White
Paper and very few people - certainly very few members of the
public - are aware of it. What this guide states, in paragraph
15, is that as far as possible a customer should be put back in
the same position that they would have been in but for the official
error."[317]
279. The Secretary of State gave the following statistics
on maladministration payments by the DWP:
"The largest amount paid to date to a single
individual (whether in one payment of several) is £91,000.
This was paid in four separate payments over a two and a half
year period."[318]
280. Furthermore, the following payments of financial
redress were made in 2005-06 in each of the following bands:
Figure 11: