3 Transitional arrangements
28. The Commission, through its delivery body, the
CSA, currently administers both the 1993 scheme (the old scheme)
and the 2003 scheme (the current scheme). However, the Commission
will also be responsible for the introduction in 2011 of the future
statutory scheme, as provided for in the Child Maintenance and
Other Payments Act 2008. It notes that it:
currently plan[s] to introduce a new child maintenance
service in 2011 to administer a new statutory scheme ('the future
scheme'), with new calculations and rules. The future scheme is
designed to be more simple and transparent than its predecessors,
more cost-effective and professional and backed by a tougher enforcement
regime.[27]
29. Over a period of approximately three years from
the introduction of the future scheme in 2011, there will be a
period of transition for clients on the old and current schemes.
Cases on the old and current schemes will be closed and clients
will be advised of the options available to them, including applying
to the future scheme. The Commission adds that its ability to
launch the future scheme and manage the transitional arrangements
for those parents on the old and current schemes "is, of
course, dependent on the availability of sufficient public funding
over the next two-three
years".[28]
30. Once the future scheme is launched in 2011, the
first wave of the old and current scheme case loads to be transferred
to the future scheme will be the clerical cases.[29]
Stephen Geraghty expected most of the clerical cases to have been
transferred to the future scheme by the end of 2012.[30]
However, Janet Paraskeva emphasised that the rate of transition
of cases, and the objective of completing transition by 2014,
were "absolutely dependent on the resource that we have mapped
out".[31]
31. The Child Maintenance Options Service was made
available to all parents from October 2008. It meets the Commission's
statutory function, under the Child Maintenance and Other Payments
Act 2008, to provide "such information and guidance as it
thinks appropriate for the purpose of helping to secure the existence
of effective maintenance arrangements for children who live apart
from one or both of their parents."[32]
It is intended to advise parents on the range of options available
for putting a maintenance arrangement in place and provides "authoritative,
impartial information and support to parents so that they are
able to make informed choices about the child maintenance arrangement
most suited to their circumstances".[33]
Many parents who will be moving off the old and current schemes
will opt for a private arrangement; the demands placed on the
Child Maintenance Options Service are therefore likely to increase
as the Commission moves into the transitional period.
32. We asked the Commission whether it would be able
to cope with the administrative burden of effectively operating
three different schemes on three different IT systems, as well
as continuing clerical management of many cases, during the transitional
period. We were told that on current projections, the Commission
was expecting to maintain administrative costs for managing the
old and current schemes while preparing for the new scheme. Stephen
Geraghty predicted
an increase [in administrative costs] in the
years when we are actually moving the cases from the current two
schemes to the future scheme […] and once we have got
everybody [transferred to the future scheme], in 2014 we envisage
about a third reduction in the running costs of the scheme through
a more efficient system, more automation and spending more time
on enforcement rather than on calculation, because we will be
using data from elsewhere round government to do the calculations.[34]
33. However, the "bulge" in administrative
costs will occur largely after the end of the Comprehensive Spending
Review 2007 period, financial years 2008-09 to 2010-11 (CSR 2007).
The Commission has agreed a 10-year business plan with the Treasury,
the first three years of which are covered by the CSR 2007 financial
settlement. No guarantee can yet be given that the additional
funding will be made available when required.[35]
34. Janet Paraskeva noted that the Commission had
already "built in something like 70% efficiency savings over
the next ten years";[36]
on the basis of the funding in the original business plan, this
would be "tough but achievable".[37]
However, she feared that making even further cuts could jeopardise
the rate at which transition from the current two schemes on to
the new system could be carried out.[38]
She added
Our skill in negotiating with our sponsor department
has to be to try to help them see that the greater savings to
the public purse come by leaving investment where it is, because
delays are not only not good for our customers but are not good
in terms of the overall costs. You simply push them away and
then they increase not decrease.[39]
35. The Child Maintenance and Enforcement Commission
faces the challenge of introducing the new statutory maintenance
scheme in 2011 and arranging for the transition of cases on the
old and current schemes. The Commission acknowledges that it will
increase its administrative costs, although it expects significant
administrative savings once the future scheme is up and running
and the old and current schemes have closed.
36. The launch of the future scheme represents the
"clean break" from the past and current systems of child
maintenance recommended by Sir David Henshaw. It is essential
for the future health and equity of the system of child maintenance
that this launch, and the transition of cases from the old and
current schemes is managed successfully. However, we are concerned
that the requirement to operate three schemes on three different
IT systems concurrently during the transitional period will pose
a formidable administrative headache.
37. We are very concerned that the escalating costs
of clerical administration of cases risk placing an intolerable
burden on the Commission at just this crucial moment. We also
note that delaying the process of transition will only increase
the long-term costs of clerical administration.
38. It will be for our successor Committee to oversee
the transition process and maintain a close eye on the work of
the Commission in this crucial period. We call on the Commission
to provide our successor Committee with six-monthly updates on
what steps it is taking to contain the numbers of clerical cases
and on the total monthly cost of clerical administration. We also
ask for six-monthly reports on its planning for handling old and
current scheme cases in the transitional period.
27 Ev 47 Back
28
Ev 47 Back
29
Q26 Back
30
Q29 Back
31
Q28 Back
32
Child Maintenance and Other Payments Act 2008, Section 5. Back
33
Ev 46 Back
34
Q7 Back
35
Q8 Back
36
Q9 Back
37
Q84 Back
38
Q9 Back
39
Q84 Back
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