5 Improving outcomes
51. The NAO reported in 2006 that one third of non-resident
parents were not paying any maintenance to support their children.[52]
It was also estimated at the time that around £3.5 billion
in maintenance was outstanding. The number of children benefiting
from maintenance payments was 623,000 in March 2006. Over the
course of the OIP, the number benefiting increased to 780,000,
and by September 2009 had increased to 797,000. While progress
appears to have been steady, the NAO has judged that "compliance
remains below anticipated levels".[53]
Case compliance and maintenance
outcome measures
52. The OIP set out to increase the level of current
scheme "case compliance"—the percentage of non-resident
parents who have been contacted by the CSA and are paying maintenance—to
80% by March 2009 but missed this target by a wide margin.[54]
Based on this measure, the CSA saw an improvement in case compliance
from 67% to 68% for current scheme cases over the course of the
OIP. Compliance for old scheme cases rose from 71% to 72%.
53. However, in 2007, the case compliance target
was replaced with a target to achieve 69% positive maintenance
outcomes—the percentage of cases where a maintenance liability
exists and where the non-resident parent is paying some money—across
both schemes by March 2009. This revised target was met with a
figure of 71% positive maintenance outcomes achieved in March
2009.
54. Over the course of the OIP, the percentage of
non-resident parents paying no maintenance at all fell from 37%
in March 2006 to 29% in March 2009. By September 2009 it had fallen
further to 27%. The percentage of non-resident parents paying
the full amount of maintenance required rose over the same period
from 46% in March 2006 to 51% in March 2009 (and further to 53%
in September 2009). Stephen Geraghty was satisfied that the Commission's
performance against the maintenance outcome measure was "pretty
good by international standards".[55]
55. The maintenance outcomes target covers both old
and current schemes unlike the case compliance measure which relies
on separate measures for each. It also provides a more accurate
measure on two grounds. The case compliance measure excludes maintenance
direct cases (where the non-resident parent pays the parent with
care directly, rather than through the CSA); excluding these payments
would therefore incentivise caseworkers not to recommend this
form of payment, which in many circumstances will be the best
solution for parents. The case compliance measure also excludes
cases with assessments but no collection schedule; again this
could encourage staff to suspend payment schedules to improve
the measure. Stephen Geraghty explained that the Commission had
dropped the case compliance measure because it was "not a
helpful measure" and, for the reasons outlined above, had
the potential to drive caseworkers "to the wrong behaviour".[56]
56. The maintenance outcome target appears to be
a more complete measure as it includes parents who do not have
a collection schedule in place (which will have a negative impact
on results) and also those with direct payment arrangements (which
will have a positive impact). However, whatever the shortcomings
of the case compliance measure, this target was missed by some
distance.
57. Although the case compliance target was set at
80%, the maintenance outcomes target was set at 69%. However,
the Commission's June Quarterly Summary Statistics indicate that
performance for current scheme case compliance has not differed
by more than two percentage points from maintenance outcomes in
any month since October 2007.
58. Whilst the newer maintenance
outcomes target may be more complete, it nonetheless appears to
have been set at a much more achievable level than the previous
case compliance target. Although the Commission met its revised
Operational Improvement Plan maintenance outcomes target, it missed
the original case compliance target by a wide margin. We ask the
Commission to set out how it calculated the maintenance outcome
target to ensure that it was sufficiently challenging.
Collection of arrears
59. The OIP acknowledged the scale of the accumulation
of child maintenance debt since 1993—the total level of
arrears had reached £3.3 billion in April 2005—but
noted that, as the Agency had no powers to write off debt and
some historical debt was uncollectible, this level was expected
to rise.[57] At the
end of March 2006, the value of outstanding maintenance arrears
was £3.5 billion, having risen by £242 million in the
2005-06 financial year. Over the course of the OIP, the rate of
increase in gross arrears slowed but the total level continued
to rise to reach £3.82 billion at the end of March 2009.
However, the level was subsequently reduced to £3.796 billion
by September 2009. The Commission noted that the growth of arrears
had been "stemmed".[58]
The Commission has assessed that only £1.065 billion of this
total level of arrears is collectible.[59]
60. The OIP set targets for collection of arrears
for both 2007-08 and 2008-09. The CSA met its target for 2007-08,
collecting £126 million against a target of £120 million,
but missed its target of collecting £220 million in 2008-09,
collecting £158 million. The target for 2009-10 has been
revised down to £170 million; the NAO reports that £74.3
million, 44%, of this sum had been collected in the first six
months of the year.
61. To increase the levels of arrears collected,
CMEC contracted two debt enforcement agencies, iQor and Eversheds,
to undertake collection of arrears worth a total of £357
million in 63,500 cases. By September 2009, only £26 million
of this had been collected, out of an expected £113 million.
The debt collection agencies received a payment of £3.5 million.
Stephen Geraghty acknowledged that the results of this exercise
had been "pretty disappointing" but that it demonstrated
how difficult it was to collect arrears.[60]
62. Stephen Geraghty explained that the failure to
meet the 2008-09 target was due to the failure of the experiment
in outsourcing the arrears collection to the debt collection agencies.[61]
This debt has now been taken back in-house, and the target has
been revised down for 2009-10. Stephen Geraghty noted that this
lower target of £170 million was still "a very difficult
target. Halfway through the year, that is looking tough".[62]
63. The Child Maintenance and Other Payments Act
2008 and the Welfare Reform Act 2009 have given the Commission
a range of new administrative powers to support its enforcement
activities and collection of arrears, which do not require recourse
to the courts. These include the power to disqualify parents from
holding or obtaining a driving licence or travel authorisation
for up to 12 months;[63]
to issue a liability order against a non-resident parent to provide
legal recognition of the debt and to enable further enforcement
measures such as seizure of goods;[64]
and to disclose details on maintenance compliance to credit reference
agencies.[65] Since 3
August 2009, the Child Support Collection and Enforcement (Deduction
Orders) Amendment Regulations have also given the Commission the
power to collect child maintenance direct from the bank account
of a non-resident parent.
64. Another recent change in the law concerns when
a non-resident parent dies owing arrears of child maintenance.
From 25 January 2010, the Child Support (Management of Payments
and Arrears) Regulations 2009 have given the Commission the power
to contact the administrator or executor of a deceased non-resident
parent's estate to request payment of the arrears from the estate.
The Commission has estimated that each year around 3,000 non-resident
parents die owing a total of around £14 million in child
maintenance arrears; it has estimated that between £2.5 million
and £3 million of this sum may be recoverable.[66]
Prior to the change in the law, these sums were still counted
as arrears although they were, in practice, not collectible.
65. It is too early for us to assess the impact of
these legal changes and changes in the Commission's enforcement
powers on levels of arrears. However, it is clear that, with
27% of non-resident parents still paying no maintenance at all
and only 53% paying the full amount required, the accumulation
of debt will require ever greater efforts to keep the total sum
of arrears under control.
66. The Commission missed its 2008-09 target for
collection of arrears and acknowledges that the 2009-10 target
is looking very challenging. However, we welcome the Commission's
achievement in stemming the growth in arrears and anticipate that
the suite of new powers that it has obtained will stimulate further
progress. Reducing levels of arrears are key to restoring confidence
in the child maintenance system and represent an essential element
of the platform for launching the new system.
67. We encourage our successor Committee to maintain
a close eye on progress in reducing arrears and, to that end,
we call on the Commission to provide a six-monthly update on progress,
including specifically reporting on the use that has been made
of its new statutory powers.
Impact on child poverty
68. The 2006 White Paper stated that one of the principles
underpinning the child maintenance system redesign was the need
to tackle child poverty. The Operational Improvement Plan set
out to lift 40,000 children out of poverty by August 2010. This
represented the CSA's contribution to the Government's child poverty
targets. However, the NAO notes that the Commission now reports
that because this figure is small relative to the expected annual
variations in poverty statistics and because of the inherent difficulties
in associating changes in poverty levels with specific policies
enacted it cannot validate whether this target was achieved.[67]
69. The Commission also estimates that "the
receipt of child maintenance payments currently helps to lift
around 100,000 children [more] out of poverty than otherwise would
have been the case".[68]
In April 2010, the Government will introduce a full child maintenance
disregard for those on income-related benefits (the disregard
is currently £20). The Commission has estimated that this
full disregard, in addition to wider reforms to child maintenance
will lift a further 100,000 children out of poverty. [69]
70. We questioned the Commission about how its contribution
to the Government's child poverty targets is measured. We were
told that although
The narrative of the OIP states that 40,000 children
would be lifted out of poverty by August 2010, […] this was
a prediction of the impact of achieving the targets [in the OIP]
rather than a target itself.[70]
71. More broadly, the Commission noted that
Poverty estimates are based on modelling conducted
using DWP's Policy Simulation Model. As such, poverty figures
are hypothetical estimates of how many more children would be
in poverty without the measures in question.[…]
Child maintenance measures are just one element
of a whole package of policies designed to tackle the multifaceted
causes of child poverty, and will interact with other elements
of the child poverty 2020 strategy currently being developed.[71]
72. The Operational Improvement Plan explicitly set
out to lift 40,000 children out of poverty. Improving the operation
of the child maintenance system is integral to the Government's
strategy for reducing levels of child poverty. We are unhappy
that the Commission's contribution to these cross-Government targets
cannot be precisely quantified. We call on the Department to establish
meaningful performance indicators for the Commission to measure
its contribution to efforts to combat child poverty.
52 Ev 34 Back
53
Ev 34 Back
54
Ev 35 Back
55
Q47 Back
56
Q42 Back
57
Child Support Agency Operational Improvement Plan 2006-09,
paragraph 15. Back
58
Ev 50 Back
59
Ev 50 Back
60
Q49 Back
61
Q52 Back
62
Q56 Back
63
Welfare Reform Act 2009, Section 51 Back
64
Child Maintenance and Other Payments Act 2008, Section 25 Back
65
Child Maintenance and Other Payments Act 2008, Section 40 Back
66
Explanatory Memorandum to the Child Support (Management of Payment
and Arrears) Regulations 2009, paragraph 7.9. Back
67
Ev 34 Back
68
Ev 50 Back
69
Ev 51 Back
70
Ev 51 Back
71
Ev 51 Back
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