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Lord Higgins: My Lords, I shall not detain the House long. So far as concerns the Child Support (Temporary Compensation Payment Scheme) (Modification and Amendment) Regulations 2002, perhaps I may ensure that I understand what the noble Baroness has just said. The scheme provides that, in cases where there has been a delay of more than six months in making a maintenance assessment and where at least three months of the delay was due to the Child Support Agency, the absent parent may be allowed to pay only the last six months' worth of the arrears of child support maintenance that has accrued.
I am not absolutely clear whether that concession means that the parent with care will receive any less than he would otherwise have done or whether the difference is made up by the taxpayer. That is essentially the point which has given me some cause for concern.
I also understand that the arrears are suspended if the individual concerned agrees to pay the future charges regularly. But is it the case that that suspension will continue indefinitely, even though the individual continues to pay on a regular basis? Is there a time limit?
So far as concerns the order, as I understand it, effectively it perpetuates the existing situation introduced by Statutory Instrument 9396 and
maintains the position that decisions on parentage should be decided by the courts rather than by a tribunal. That seems to me eminently sensible. Indeed, it has some topical interest in that it relates to a case which hit the headlines this morning. It is obviously a decision that should be made by a court. Therefore, I have no reason to object to what is proposed.
Earl Russell: My Lords, I, too, have no objection either to the order or the regulations. The temporary compensation scheme has always been a sensible approach to a problem which has been capable of turning into an avalanche falling on to the head of a parent whose assessment has been delayed. Its continuation is clearly necessary because of the delay in the introduction of the new Act. I believe, first, that that delay is no fault of the Minister. Secondly, in the course of proceedings on the Tax Credits Bill we have already had our pound of flesh. I do not believe that we are entitled to a second and I shall not ask for one.
With regard to the jurisdiction of courts, I believe that clearly it is sensible that questions of paternity, which have wide ramifications and raise rather complicated questions about rules of evidence, should go to the courts. Like the noble Lord, Lord Higgins, I believe that that case appears a great deal stronger today than it did yesterday.
Baroness Hollis of Heigham: My Lords, I am grateful to both noble Lords for their response. I believe that the precise questions to which I need to return are those raised by the noble Lord, Lord Higgins, concerning the parent with care and her position under the regulations. Your Lordships will forgive me if I use gendered language in relation to this matter.
The parent with care would not receive any less, although she may well receive it later. Let us assume that a person is self-employed. He has arrears of £10,000. As a result, he has been ducking and weaving. He may still be seeing the child but not paying any money. He is liable for £30 a week, but he regards the £10,000 as too much to pay and therefore continues to operate in the shadows.
We may be able to come to an agreement with him whereby he pays the £30 a week. He pays off six months' worth of arrears, which, although I am unable to work it out, may amount to approximately £1,500. He pays regularly over the next 12 months and also, over that period, pays back six months' worth of the arrears. If he does that satisfactorily for 12 months, those arrears will then be suspended indefinitely and he will not have to pay any more. However, if, in the process, he falters, the arrears can still come back into play.
As for the parent with care, at the end of 12 months some of the £10,000 which is owed in arrears may be owed to the Secretary of State if the individual is receiving benefit. Some of it may be owed to the parent if she has entered work. If it is owed to the Secretary of State, it is put aside. If it is owed to the parent, the taxpayer will make up the difference. Therefore, the parent recovers the money that would have been paid
because we accept that, to a degree, the agency was culpable in not getting the money to her earlier. For our purposes, the important point is that that arrangement has proved successful in bringing people out of the shadows and into paying maintenance reliably in future, thus reducing future burdens on taxpayers to support parents on benefit.On Question, Motion agreed to.
Child Support (Temporary Compensation Payment Scheme) (Modification and Amendment) Regulations 2002
Baroness Hollis of Heigham: My Lords, I beg to move.
Moved, That the draft regulations laid before the House on 24th June be approved [34th Report from the Joint Committee].—(Baroness Hollis of Heigham.)
On Question, Motion agreed to.
Contracting Out (Functions of Local Authorities: Income-Related Benefits) Order 2002
8.30 p.m.
Baroness Hollis of Heigham rose to move, That the draft order laid before the House on 26th June be approved [34th Report from the Joint Committee].
The noble Baroness said: My Lords, the responsibility for administering housing benefit, council tax benefit and discretionary housing payments rests with local authorities. Local authorities can already contract out many aspects of that work.
However, there are important functions which cannot be carried out. Contractors or agency staff cannot at present make the decision which determines entitlement to benefit. They can make recommendations, but an officer directly employed by the local authority must make the final decision. Neither can contractors or agency staff make decisions on the award of discretionary housing payments.
Checking the work done by the contractor or agency staff and making a benefit decision places a large burden on local authorities. It involves unnecessary and expensive double handling. Everything has to be done twice. We want to see improvements in benefits administration and we hope that the order, which is warmly welcomed by local authorities, will help us to do so.
The provisions are as follows. First, the order gives local authorities a power to authorise other people to undertake functions relating to housing benefit, council tax benefit and discretionary housing payments that at present only the local authority can undertake. That will enable contractors and agency staff to undertake those functions in so far as the local authority authorises them to do so. I refer to Article 3(1).
Secondly, it specifies the functions which the local authorities will not be allowed to authorise other people to undertake. Those are mainly areas which, because of subsidy or fraud implications, we believe should be reserved for the local authority to make the decision. I refer to Article 3(2). Thirdly, it imposes a condition that the authorised person passes a daily random sample of cases—10 per cent—to the local authority to enable the local authority to check the quality of the work. I refer to Article 4.
That requirement will apply only to people employing at least one other person; that is, only the contractor, not agency staff. I refer to Article 4(5). That is because local authorities have the same day-to-day control over agency staff as they do over their own employees. Finally, it provides that a local authority cannot give an authorisation to a person who has a financial interest in the outcome of a claim, or to whom rent is payable for a dwelling in respect of which a claim is made, to avoid any possible conflict of interest. I refer to Article 5.
I stress to your Lordships that the order does not remove any accountability from local authorities. They retain full responsibility, as now, for all housing benefit and council tax benefit expenditure. They are expected to have proper controls and checks in place in order to ensure that the contractors are doing the work to an acceptable standard. In addition, authorities will remain subject to an independent check by external audit and by the Benefit Fraud Inspectorate. We see an increased role for the BFI to ensure that that is done.
I believe that the order will enable local authorities which use or want to use contractors or agency staff to have less of an administrative burden. We shall issue guidance to local authorities to ensure that they have strong contract management in place when coming to such arrangements. There may be other issues we want to include in guidance. However, this is a discretionary and permissive power for local authorities which already contract out their work to be able no longer to have to do the same work twice over. There are proper sample quality controls in place. There will be codes of guidance to local authorities after consultation with them. I hope that, as a result of that, your Lordships will accept the order. I commend the order to the House.
Moved, That the draft order laid before the House on 26th June be approved [34th Report from the Joint Committee].—(Baroness Hollis of Heigham.)
Lord Higgins: My Lords, having heard the explanation from the Minister, I have doubts about the order. The noble Baroness will know that I have always been somewhat concerned about the way in which housing benefit is administered by local authorities. However, as I understand it, the order will now enable them to contract out some of the responsibility for administering housing benefit, other housing payments, and so forth. Apparently, the way in which the contractor carries out the work will be checked by taking a random sample of 10 per cent of
cases. Why do the local authorities need to contract out? Why should not the local authority carry out the responsibilities Parliament has given to them.Perhaps I may make another point. We know that such work involves confidential information. However, is that information, which presumably may be relevant to some of the decisions to be made by the contractors, to be passed on to them? That issue has been raised on previous occasions and gives cause for concern. Overall I am not clear as to whether this is a complete innovation or whether it has been done before. If it is an innovation, have we given sufficient consideration to the problems which may arise?
Finally, the noble Baroness stated that the sampling does not apply to people who do not have someone else working for them. That is not the same as the council having an employee, with all the usual requirements as regards national insurance contributions, and so forth. Should not an individual sub-contractor be subject to the same somewhat inadequate provisions for random sampling?
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