Draft Public Bodies (Child Maintenance and Enforcement Commission: Abolition and Transfer of Functions) Order 2012
The Committee consisted of the following Members:
† Baker, Steve (Wycombe) (Con)
† Bell, Sir Stuart (Middlesbrough) (Lab)
† Blenkinsop, Tom (Middlesbrough South and East Cleveland) (Lab)
† Crabb, Stephen (Preseli Pembrokeshire) (Con)
Donohoe, Mr Brian H. (Central Ayrshire) (Lab)
† Dowd, Jim (Lewisham West and Penge) (Lab)
† Laing, Mrs Eleanor (Epping Forest) (Con)
† Lopresti, Jack (Filton and Bradley Stoke) (Con)
† McGuire, Mrs Anne (Stirling) (Lab)
† Miller, Maria (Parliamentary Under-Secretary of State for Work and Pensions)
† Mitchell, Austin (Great Grimsby) (Lab)
Paisley, Ian (North Antrim) (DUP)
† Selous, Andrew (South West Bedfordshire) (Con)
† Stevenson, John (Carlisle) (Con)
† Tredinnick, David (Bosworth) (Con)
† Williams, Mr Mark (Ceredigion) (LD)
† Williams, Roger (Brecon and Radnorshire) (LD)
† Wood, Mike (Batley and Spen) (Lab)
Mark Etherton, Committee Clerk
† attended the Committee
Eleventh Delegated Legislation Committee
Tuesday 3 July 2012
[Mr Mike Weir in the Chair]
Draft Public Bodies (Child Maintenance and Enforcement Commission: Abolition and Transfer of Functions) Order 2012
4.30 pm
The Parliamentary Under-Secretary of State for Work and Pensions (Maria Miller): I beg to move,
That the Committee has considered the Draft Public Bodies (Child Maintenance and Enforcement Commission: Abolition and Transfer of Functions) Order 2012.
It is a pleasure, as always, Mr Weir to serve under your chairmanship. The order was laid before Parliament on 23 April under the powers of the Public Bodies Act 2011. It provides for the abolition of the Child Maintenance and Enforcement Commission and the transfer of its functions to the Secretary of State for Work and Pensions. Before addressing the order I thought it would be helpful to provide some background on CMEC and the proposed abolition and transfer.
CMEC was established by the Child Maintenance and Other Payments Act 2008 and it took over the responsibility for child maintenance in Great Britain. Its primary objective is to maximise the number of effective maintenance arrangements in place for children who live apart from one or both of their parents. To achieve this objective CMEC has three core functions: promoting the financial responsibility that parents who live apart have for their children; providing information and support to help parents make effective maintenance arrangements; and providing an efficient statutory child maintenance service with effective enforcement.
CMEC has two delivery bodies to put that all into action. Those two bodies are staffed by 8,000 dedicated and hard-working people who are committed to provide this important service: Child Maintenance Options, which provides free and impartial information and support services and the Child Support Agency, which continues to administer two parallel statutory maintenance schemes. The current child maintenance reforms are all about reshaping the system because despite all of these detailed objectives and structures, CMEC does not achieve its mission in life. For half of the children living in separated families—that is 1.5 million children—there is no effective maintenance in place. It receives 23,000 complaints every year. It costs the taxpayer £450 million a year when the Government spend less than 10% of that on helping families positively with their relationships.
The current system needs reform and that is what we are working on. We know that encouraging parents to work together is the best way we can help them to get effective arrangements in place to support their children and to ensure that we have an effective system for both families and the taxpayer in the long term. The proposal to abolish CMEC was announced on 14 October 2010 as part of the Government’s review of public bodies.
The review’s overriding aim was to increase transparency and accountability as well as to cut out duplication of activities. Three criteria were set out which determined whether a body or a function should be delivered at arm’s length from Ministers.I am satisfied that CMEC does not meet any of those criteria because it is not a technical or fact-gathering body that needs independence. It does not require political impartiality to discharge its responsibilities. Nor does it need to act independently to establish the facts. Quite simply, it performs an administrative function and the services it provides should be managed within Government rather than by a non-departmental public body.
Supporting families, particularly those 3 million children living in separated families is very much at the centre of our Government’s aims and objectives. I believe that it is right that Ministers should be directly accountable and responsible for the operational delivery, strategic direction and policies all relating to child support. In the longer term, efficiencies will also be achieved to enable a better service to be provided to parents and children.
The order has been scrutinised by several Committees within Parliament; in this House by the Select Committee on Work and Pensions, in the other place by the Merits of Statutory Instruments Committee, and collectively by the Joint Committee on Statutory Instruments. None of those committees chose to trigger the longer optional 60-day scrutiny period. The Merits of Statutory Instruments Committee reported on the order on 15 May and concluded that it increased direct ministerial accountability by reversing the provisions in the Child Maintenance and Other Payments Act 2008.
Under the order, the CMEC will be abolished and no longer exist as a separate legal organisation. Staff will transfer from CMEC to the Department for Work and Pensions and will retain their civil servant status, and staff terms and conditions will be protected at the point of transfer.
David Tredinnick (Bosworth) (Con): I am listening with interest to what the Minister is saying. I welcome this measure, because I think that anything that we can do to help improve the process is important, and it is right that the Committee considers it today. Can she confirm the rumours that there were very few responses to the consultation process, which suggests that this is extremely uncontroversial?
Maria Miller: I thank my hon. Friend for that important intervention, because he is right. I was going to come on to it later, but we entered a period of consultation from 10 October last year to 3 January this year and we received 11 responses. It is important that we received those responses, but he is right to point out that that would suggest that the order may not be the most controversial measure that Committees in this House consider.
It is important for us to focus on the fact that there will be continuity, despite the change that the order makes. Although CMEC will become part of the Department for Work and Pensions—an important
change—we will continue to have continuity at the most senior levels, particularly in regard to the current chief executive and commissioner, Noel Shanahan, who will continue to head up the organisation, albeit within the operational business unit, which will be called the child maintenance group and will report directly to the permanent secretary at the Department for Work and Pensions.There is no intention to change the services currently delivered by CMEC when its functions are transferred. As my hon. Friend has already prompted me to say, we ran the consultation exercise required under the Public Bodies Act 2011, and, as I have said, the number of responses received was not great—it was 11. Five of those responses were broadly supportive of our proposals, either agreeing with or welcoming them, albeit with some minor comments. Three respondents disagreed or asked for reconsideration. The remainder were generally neutral. I hope that that helps the Committee in its considerations today.
The Work and Pensions Committee held an evidence session on the draft order on 25 April, which the child maintenance commissioner—Mr Shanahan—and I attended. The Committee raised a few issues, including how CMEC’s current objective and functions would be pursued after the changes, how its activities will be reported on following the transfer; and about improving value for money. Those issues were also raised during the passage of the Welfare Reform Act 2012. The assurances that we were able to give were important and the Secretary of State will continue to bear all the issues that have been raised in mind. We already have sufficient powers to ensure that the Department can maximise the number of effective child maintenance arrangements and there are strong incentives to do so. The Secretary of State also has sufficient power to provide information and does not need legislation to set out objectives on information sharing. The commissioner and I confirmed to the Committee that transparency and information would be improved as a result of the change.
In conclusion, the abolition and transfer of CMEC is designed to increase the effectiveness of the support that we are able to give families and to achieve economies over the longer term. Most significantly, those delivering the service will no longer be at arm’s length from Ministers, who will be accountable and answerable to Parliament for their performance and for the ongoing reform of the child maintenance system. That will enable Ministers to manage the major reforms currently being made to child maintenance, and to work towards the goal of helping more parents to make the right choices in the best interests of their children.
4.40 pm
Mrs Anne McGuire (Stirling) (Lab): It is a pleasure to be in Committee under your chairmanship this afternoon, Mr Weir. I look forward to what I hope will be a consensual sitting. I want to echo the Minister’s comments about the 8,000 civil servants who work for our various child maintenance and child support agencies. She is right to say that those civil servants have given great service over many years—sometimes working under
considerable strain and, frankly, in a context that has been delivered by politicians from both political parties—in the pursuance of child maintenance in this country.The Minister was right to identify the primary objective of the commission that was created in 2008, which was to maximise the number of children living apart from one or both of their parents for whom effective maintenance arrangements are in place, as well as the subsidiary objectives. We of course appreciate that those objectives and duties will be abolished by the order, and I want to test the Minister on one or two issues in that area. I am delighted to see the hon. Member for South West Bedfordshire, who may reflect that, when the legislation was going through, he welcomed it on behalf of the then Opposition and was very positive about the sort of work that could be done. I am interested to know how that view has been reconfigured in a short period of time.
In Committee on the Welfare Reform Bill, the Minister was asked whether the principal aim of CMEC—to maximise the number of effective maintenance arrangements—would be pursued once it became part of the DWP. She said that child maintenance was just one of the issues that face separating families. She continued:
“We want to be able to put it into the broader context, because we believe that that will help more families come to more effective arrangements.”––[Official Report, Welfare Reform Public Bill Committee, 24 May 2011; c. 1103.]
She will not be surprised to know that concern has been flagged up about mission creep in the new arrangements. As Ministers require a wider, more diffuse policy objective, there may be a danger of using the need for maintenance as a tool to encourage better relationships between parents living apart. There might also be some blurring of the key focus that currently drives the commission’s activity—to ensure that children living in separated households do not lose financial support—and it might be difficult to maintain that focus.
The Minister will know that we divided the Committee on the Welfare Reform Bill on the purpose of the new agency. At that time, she promised a large-scale baseline survey from which to determine the new body’s performance. I am pleased that Ministers have assured us that the focus of the new agency, which is replacing CMEC, will remain on ensuring the welfare of the child. However, I have to say that we remain concerned that removing the objectives from the new body will dilute its focus. Will the Minister give us further assurances that that will not be the case? We of course recognise that there will be budgetary pressures on the new group. Her focus and that of the Department on the broader context and the challenges that face separating families will perhaps create difficulties in maintaining the primary objective. How will she ensure that that primary objective is rigorously pursued?
In addition, the monitoring of CMEC’s functions will no longer be achieved through the annual report. During parliamentary debate of the Welfare Reform Bill, an amendment was tabled that sought to impose an overriding objective on the Secretary of State in applying the provisions of the Child Support Agency Act 1991. At that point, however, the amendment was considered unnecessary and rejected. Can the Minister confirm that the DWP’s data releases on the new child maintenance group’s performance will be as rigorous as
the CMEC reports? When and what data will be published to monitor the new organisation? Again, I ask the Minister for some time scale in which she will provide the large-scale survey that will identify the baseline for monitoring the performance of the new group.One other matter is the tension between the DWP’s main focus, which is the payment of benefits and pensions, and the nature of child maintenance. Frankly, child maintenance involves the transfer of income between parents and not between Government and claimant. Every case, as the Minister is well aware, involves two separate parties, with the commission currently engaged in attempting to achieve behavioural and attitudinal change to encourage payment—something on which I agree thoroughly with the Minister. That also involves a quasi-judicial role in resolving disputes between parents, as well as between the parent and the commission. Indeed, some parents might never have claimed DWP benefits. All such factors make child maintenance very different compared with the other work of the Department, which I am concerned could be overlooked in the effort to rationalise the processes, systems and staff. It is how we pull together those two roles and, given some of the difficulties that the Government have had in understanding quasi-judicial roles, I would like confirmation that Ministers are well aware of the potential for some tension.
In many ways, we regret the Government’s determination to pursue this course of action, but we have to be realistic and to recognise that the Government are determined to establish this new line of management or oversight on child maintenance payments. The arm’s length body was established with support on both sides of the House, as I have mentioned, to give a focus to the importance of maintenance orders. It was established in such a way that it could be judged against a set of established criteria. I have no intention to press for a Division on the draft order, but I trust that the Minister can reassure the Opposition that by taking the agency back in-house, so to speak, her Department will not replicate the errors of the past—by both political parties—when, frankly, direct ministerial control did not work.
The Minister said that the new organisation will be better placed to achieve its objectives. I am not sure whether she has given me enough detail as to how that will be pursued or how she will guarantee that the new structure will achieve those objectives. Also, is the Minister in a position to identify who will be on the new group, so that the Committee is totally informed in its discussion? As I have indicated, however, I have no intention to divide the Committee, but I would appreciate the Minister dealing with some of my detailed points.
4.49 pm
Austin Mitchell (Great Grimsby) (Lab): I did not intend to speak, but there is a muddle about the function of child maintenance. Also, the Child Support Agency succeeded in causing much agony, and agonising work for Members of Parliament, so it would be indecent to see it buried in the tomb of the Department for Work and Pensions without some funeral lamentation on its role and the problems that it has caused.
My right hon. Friend was perfectly correct to say that this is a merger with a Department that has the very
different function of paying out benefits; the DWP is now taking on the role of collecting from one parent and paying to the other. One worries whether those two roles can be effectively conducted by the same Department. One also wonders what effect departmental staff and funding cuts will have on the child support system. The child support system as it currently operates, and has operated since the Child Support Agency was created in those distant days, creates enormous work for MPs and their staff. The problems that that creates should be mentioned because if they are going to be made worse by staff cuts and the merger into a new Department, we will inherit a serious problem.These are the key problems on which I hope the new structure can make some advances and provide some satisfaction to MPs. First, there is a lack of local advice and support for parents, whether paying in or receiving, who find great difficulty in communicating by telephone, which is abrupt, difficult and, from their point of view, expensive. In the initial stages of the Child Support Agency, a local officer was appointed in Grimsby whom people could consult on their case. That officer quickly vanished and people came back to the MP’s office or were hanging for ages on the phone. That is the first point: what provision will be made for local support and advice for people who use the service?
Secondly, one of the key problems was the lack of investigation staff. Wives came to me with enormous piles of documents—some even employed private detectives to follow ex-partners around to prove that they were working, going on expensive trips or had big foreign cars in the garage and, therefore, had enormous amounts of money—but the old support system took no notice. That left a continual feeling of anger and dissatisfaction that husbands were getting away with not making the contributions to the support of their kids, which the system was supposed to provide. If no effective investigation will be carried out and no staff appointed to investigate such complaints, the system will fail as the old systems failed. So I worry that that will not be provided given the staff cuts. There have to be investigations when wives—in some cases, husbands, but mainly wives and ex-wives—provide evidence that maintenance is not being paid by people who are perfectly capable, wealthy enough and have income enough to pay. That cannot be allowed to continue.
Thirdly, one person should work continuously on each case. I do not know what the arrangements for merging the staff into the DWP will mean, but the problem was put to me graphically by people who complained that, when they got through to an official who understood their case and had the papers in front of them, the next time they rang somebody else was working on the case and had to be educated from the start, which is wasteful.
I hope those three points will be addressed by the new arrangements, and I want to make two other brief points. What is the Government’s estimate of the decline in the use of the service, given attempts to conciliate before divorce and to reach agreement between the parties without putting the case to the child support system? Will the system waste away and eventually become entirely unnecessary?
Secondly—this is a more important point emotively—we on the Public Accounts Committee heard evidence that a system of charging is being considered. In other
words, the new Department will charge up to 20% and, in some cases, 25% to pay out money to the partner and the children, as well as charging to take it in. If the Department is going to charge up to 17p in the pound to take the money and up to 25p to pay it out, that is half the money that should be paid to the children.After all, as the Minister said, it is about what is in the children’s best interest. What is in the children’s best interest is that they get the money and the maximum support that the system can provide. If there is to be a system of charging—I hope that she can assure us that that is not the case—it will halve the effectiveness if the charges amount to half the money paid in, and the system will fail in its duties to support children. What assurances can she give us about charging in the new structure?
4.56 pm
Mrs Eleanor Laing (Epping Forest) (Con): I am sure that the Minister is aware that most Members of Parliament who have had to deal with difficult cases brought to them over the years by constituents trying to deal with the Child Support Agency will be delighted that the Government are taking steps to change the system and bring it more under control, as she has explained. I am not making any party political points, as the problems of the CSA and other bodies connected with it started under a Conservative Government and continued under a Labour Government. This has nothing to do with party politics; it has to do with genuine attempts on the part of many, if not all, of us to help constituents in genuine difficulty.
The hon. Member for Great Grimsby explained the situation well. Like him, I have a filing cabinet full of thick files on cases in which I have tried to navigate the CSA system on behalf of constituents, sometimes for seven, eight, nine or 10 years of an ongoing case. That cannot be right. The Minister has introduced new plans that have been discussed at great length in the Chamber. The vast majority of us are grateful to her for taking this action, and we wish her well with it.
4.58 pm
Maria Miller: The consensual nature of this debate has been helpful. The points raised by hon. Members from all parties are important, and I will try to address them directly, although I will turn first to the comment by my hon. Friend the Member for Epping Forest about trying to navigate CMEC. I agree as a constituency MP that being the Minister can be helpful, but it certainly does not always help me understand the complexities of getting the support that I know families in my constituency want. I am not surprised that we still get 23,000 complaints. I know that the commissioner is working on it, but it is still an unfortunate fact of how the operation is running.
The right hon. Member for Stirling raised a number of important points about the objectives and the reporting of the Secretary of State. As she will remember from our discussions during debate on the Welfare Reform Act 2011, an amendment was tabled, as she mentioned, on that point. Assurances were provided in that debate that the focus remained clearly on maximising the number of effective plans in place for children, keeping the current organisation’s prime objective at the fore. That is important, and she is right to press me on it again. I am content to underline our commitment in that area.
I was not, however, as supportive of her second line of questioning, which she defined as mission creep. The broader context within which child maintenance issues fall cannot be ignored. I will always remember going to the Options service call centre and talking to some of the telephone operators. They told me very clearly that families, at a time of family breakdown, are not just thinking about money; they are thinking about a whole catalogue of problems. Providing a way to download those problems, or to obtain some direction on how to resolve some of them, can help us to put a more effective financial support system in place for those children as well. All of that is part of trying to achieve our prime objective, which is to maximise the number of effective plans in place by trying to reach families where they are.
Mrs McGuire: Does the Minister appreciate fully the complexity of the operation that she is now opening up for Options? Although I accept that financial issues are not always the primary issue, some of the other elements have a far wider scope than even a reformed CSA operation could possibly deliver. What will the burden be on individual members of staff who are providing that service?
Maria Miller: The right hon. Lady is, again, right to press me on these issues. I am pleased to be able to bring the Committee up to date on the work that I am undertaking with my colleagues in the Ministry of Justice and the Department for Education. The right hon. Lady will know from her time spent considering these issues in detail that we have to have cross-departmental working if we are to maximise the effectiveness of the plans we have in place to support families, especially separated families. I am delighted that the three Departments are co-operating to put together an effective way forward for families.
The right hon. Lady is absolutely right to focus on the fact that we are there to make sure that financial maintenance is in place. As a result of our reforms—this is an important point for the Committee to note—I have been able to release £20 million that was previously spent on IT systems, to support the charitable organisations that all of us in this Committee know work effectively to support families. Indeed, in the past few days we have launched an innovation fund of £14 million to help ensure that we grow our understanding of which interventions work most effectively to help families achieve good arrangements, post separation, to get that financial support in place.
The right hon. Lady raised the availability of data and wanted some detail. We plan to continue to publish quarterly statistics. As for the broader view, questions on child maintenance will be included in the Understanding Society survey, which is published every two years, to give us the sort of insight that I think the right hon. Lady is looking for.
The right hon. Lady also raised the issue of the quasi-judicial role, something which came up when we were in discussion in the Select Committee. To underline this to the Committee, Ministers will not be involved in the day-to-day running of cases, in the same way that we are not involved in the day-to-day running of any of the benefits that also find their home in the Department for Work and Pensions. That is rightly for
officials, and for tribunals, if resolutions cannot be found. Nothing in the order changes that, and that is absolutely right.The right hon. Lady asked questions about the new structure; about not replicating the errors of the past, but ensuring that there was enough space for the agency to be recognised for being very different to many of the other entities within the Department. She will be reassured to know that the new structure will have the child maintenance function as part of an operational business unit within the Department for Work and Pensions. This very much echoes the structure for Jobcentre Plus. It will continue to be headed by Noel Shanahan, to give us that important continuity, and it will report to the permanent secretary. Mr Shanahan will continue to have oversight of both the operational and strategic side of this piece of our business, which will give us continuity into the long term.
The right hon. Lady’s final question was whether we would be better placed to reach our objective. I believe wholeheartedly that we will. We recognise that families need more than simply financial support at the time of family breakdown and need signposting to a broader suite of support. We have pulled together our plan with the able help and guidance of the leading organisations that already deliver services in this area. I thank them all for the immense amount of time that they have put into constructing it with us. This will leave us better placed to help more families to get financial arrangements in place for their children,
The hon. Member for Great Grimsby raised a number of important points, which I shall touch on before I close. He was particularly interested in the local services that our constituents often need. He rightly drew on his experience as a constituency MP of some of the practical problems that our constituents have with the current service. We will continue to have a co-ordinated telephony service and local services as well. I hope that the hon. Gentleman will feel that we have a better support system in place for face-to-face service as we move forward. I rely on him to make sure that he regularly feeds back to me how he feels this is going in his constituency. He also talked about the importance of making sure that we investigate non-payment of maintenance. One of the real changes that I am sure hon. Members will welcome is that we will be able to use HMRC data to ascertain the income levels of non-resident parents when we make calculations so that children receive the proper amount of money to support them.
This will be a much more robust way forward and will focus the new statutory scheme on the more difficult
cases. By helping the 50% of people who currently say that they would like to make their own arrangements outside the statutory scheme to do so, it will leave the statutory scheme for those that are the most difficult. We will be able to use our resources in a more focused way, to make sure that we use our tough enforcement powers in future. As for the declining use of the statutory system, I assure the hon. Gentleman that we want to make sure that the statutory system is there for the people who need it. As I said, around 50% of the users of the current statutory system say they would prefer to make their own arrangements outside it, and we support them in doing that, leaving the statutory service for those most difficult cases.In his closing remarks, the hon. Member for Great Grimsby touched on the issue of charging. That is slightly outside this Committee, but, if you will indulge me, Mr Weir, I will provide some reassurance. It is absolutely not our intention to take half the money away from children receiving payments through the statutory system. The levels of charging have been set out in the Green Paper we published some while ago. Our objective is to ensure that parents do not need to use the system where charging is in place; that even if they cannot come to their own arrangement outside of the statutory service and pay their application charge, or go within the statutory scheme, there is still an option for them to use Maintenance Direct, which has no ongoing charges. If there is a problem with the non-resident parent not paying the money, the statutory scheme is there for families.
The burden of the payment of charges will always fall more on to the non-resident parent but, importantly, the charges go some way towards recognising that the service is expensive. The scheme remains heavily subsidised by the taxpayer, and is over and above the £6 billion that the country pays out in benefits and on services to lone parents. With the charge, we also put some pressure on parents to say, “Actually, we should be working together.” The point of Henshaw’s report in 2006 was that we will perhaps get more parents to work together if we say that there is a cost involved in their not doing so and, at the end of the day, we know that that is much better for the children.
That the Committee has considered the draft Public Bodies (Child Maintenance and Enforcement Commission: Abolition and Transfer of Functions) Order 2012.