I now submit the additional information requested at my appearance in front of the Committee on 19 January 2000.

  Although the level of compensation payments made is high, this is due to the delays caused by the complexity of the current formula and the outdated IT system that is presently used. In place of the current confusing and error-prone formula which can require more than 100 pieces of information to make an assessment, the Government is introducing a new system of rates that will base liability simply on the Non-Resident Parent's income and the number of children involved.

Child Support Agency

18 February 2000

Q 102A.  AN ANALYSIS OF THE CAUSES OF ERROR THAT HAVE CONTRIBUTED TO THE HIGH LEVELS OF OVERPAYMENT OF RECEIPTS IN 1998-99

  The NAO have provided us with details of the causes of error in the 33 cases (out of the total sample of 93) where they identified 43 separate errors during their audit activity. This information is set out in the table below.

  These figures show that, as was stated by the Agency at the hearing, the main causes of error are due to miscalculation and lack of information for employed and self employed earnings and rent and mortgage payments.

  The NAO's sample shows that 25 errors (58 per cent) resulted in overpayments of maintenance and 18 errors (42 per cent) resulted in underepayments.

  The Independent Monitoring and Guidance Unit, which reports to the Agency's Standard Committee, have examined a sample of 1,047 cases in the current year to date. This sample has confirmed that the main causes of error continue to be earnings and housing costs. However, from this larger sample the proportion of errors overstated and understated has been identified as 48 per cent and 52 per cent respectively.

  There is therefore no established trend towards the majority of assessment errors leading to overpayments of maintenance.

Q 103B  THE PROPORTION OF ERRORS ATTRIBUTABLE TO THE FAILURE TO IMPLEMENT A REVIEW

  In the National Audit Office's sample of 93 cases they discovered three errors in the maintenance assessment, which had, been caused by the Agency's failure to implement a review. This represents 3.2 per cent of the NAO's total sample and 9 per cent of the 33 cases where they identified errors. If these percentages were applied to the Agency's live caseload (924,000 at 31 March 1999) this would represent a total of 29,568 cases where the Agency had failed to implement a review.

Q 49 & Q 98C  THE ACCURACY RATE OF 1999-2000 ASSESSMENTS CHECKED TO DATE

  The accuracy rate, to the nearest penny of the assessments checked in the current year to date, is 71.6 per cent.

  This is based on a sample of the cases checked by the monitoring and guidance unit, of the errors identified 48 per cent resulted in the amount of maintenance being overstated and 52 per cent understated.

Q 176D  THE LARGEST SINGLE AMOUNT OF COMPENSATION AWARDED AND THE REASON FOR ITS PAYMENT

  The largest single amount of compensation paid was £27,393.60. This was awarded to a Parent with Care following the Agency's delay in issuing a Maintenance Enquiry Form to the Non-resident Parent. This payment represented monies that would have been due to the Parent with Care from the Non-resident Parent had the Agency issued this form timeously and included a payment for loss of use of this money (interest).

  However, this should be considered in context as payments of this magnitude are very exceptional, the average payment made by the Agency in 1998-99 was £795.91 (£515.60 in 1997-98).

  Compensation is awarded in accord with guidelines set by the Department. These rules are regularly reviewed and following representations by the Parliamentary Commissioner for Administration (PCA) and the Independent Case Examiner (ICE) the grounds and conditions for making special payments have been expanded by the Department.

Q 190 & Q 192E  AN ESTIMATE OF THE NUMBER OF CUSTOMERS WHOSE OUTSTANDING MAINTENANCE BALANCES CONTAIN ERRORS IN EXCESS OF £1,000

  It is difficult to provide definitive information to this level of detail. If the Agency identifies a case where there is an error in the maintenance assessment and hence an error in the balance of the maintenance outstanding the Agency would correct the assessment and the balance.

  To provide this information the Agency is therefore relying on the sample of cases used by the NAO in carrying out their audit activity.

  From the NAO's sample of 140 cases they identified errors in the balance of maintenance outstanding in excess of £1,000 as set out in the table below.

  Based on this small sample if these percentages were applied to overall caseload the number of cases with errors in the balance of maintenance outstanding of over £1,000 would be:

Q 96F  DETAILS OF THE LARGEST OVERSTATEMENT AND UNDERSTATEMENT ON BOTH FULL AND INTERIM MAINTENANCE BALANCE

  Details of the largest overstatements and understatements for both Full Maintenance Assessments and Interim Maintenance Assessments from the sample are detailed below. These figures represent the cumulative value of the over/understatement to the date of examination.

  We have included the average overstated and understated amounts for the same sample, where the sample has identified an error, in order to give a balanced view in light of these examples.

  The legislation provides for Interim Maintenance Assessments to be used as a punitive measure where Non Resident Parents are unwilling to provide the Agency with the information required to calculate a Full Maintenance Assessment. Therefore, they are deliberately imposed at a higher rate in order to encourage compliance, and associated figures should be viewed in this context. One of the reasons that Interim Maintenance Assessments are categorised as errors, is that they should have been converted to Full Maintenance Assessments. These cases normally have a cumulative Full Maintenance Assessment balance on recalculation, which will have built up as a result of non-compliance. Of the 19 per cent error rate for Interim Maintenance Assessments, 15 per cent fall into this category where the overstated amount, when re-calculated, will normally be significantly lower than the IMA balance.

Q 146G  DETAILS OF VALUE OF COMPENSATION PAYMENT MADE TO REDRESS INCONVENIENCE AND DISTRESS

  The Agency incurred expenditure of £4,350,437 on compensation payments, of which £561,633 (13 per cent) was paid in relation to inconvenience and distress. There were 4,218 of these payments made by the Agency, the highest payment made in the year was £1,150 and the lowest was £50.

  The balance of expenditure is incurred by the Agency reinstating the individual to the positon they would have been in if the Agency had not made an error in their case.

H  DETAILS OF MAXIMUM AND AVERAGE AMOUNTS OF COMPENSATION, WITH AND WITHOUT "CONSOLATORY" ELEMENT

  As detailed previously in our response the maximum amount of compensation paid was £27,393.60. This did not contain any "consolatory" element. The maximum amount paid inclusive of a "consolatory" element was £18,686.51 (including £50 for inconvenience and £750 for severe distress).

  Although we are unable to provide all the information requested above we are able to supply the total number of compensation payments made in 1998-99, 5,466, and the value of these payments, £4,350,437. Thus allowing us to calculate the average payment figure of £759.90. We also know how many individuals received a "consolatory" payment, 4,218 in 1998-99, and that the total value of these was £561,633. This gives an average "consolatory" payment of £133.15.

  However we are unable to identify which of these are just "consolatory" payments and which are linked to reinstating individuals to their former position. Therefore we are unable to provide you with an average payment of compensation which includes a "consolatory" element.

Q 185I  THE NUMBER OF TIMES THE AGENCY HAS WRITTEN TO MINISTERS TO CORRECT POINTS MADE TO THEM IN PREVIOUS BRIEFINGS

  The Agency does not hold statistics on the information requested. We take out responsibility extremely seriously with very strict procedures in place to try and ensure that all letters are 100 per cent accurate.

  On any occasion where a letter was subsequently found to hold inaccurate information a letter of personal apology would be issued, however we have no record of any such cases.

Q 196J  DETAILS OF THE FORMULA USED BY THE AGENCY TO DETERMINE THE AWARD OF COMPENSATION

  We as all other Agencies within the Department of Social Security are subject to the limitations laid down by the Government and Her Majesty's Treasury.

  Each case is considered on its own merits, taking into account the full circumstances and facts of the case according to detailed guidance laid down for all DSS. This guidance covers a wide range of circumstances however, five basic principles are followed when considering redress.

  1.  All mistakes are admitted and put right.
  2.  Arrangements for considering redress are made public
  3.  Redress is fair and reasonable
  4.  Redress restores the customer to the position he/she would have been but for the maladministration
  5.  Account is taken of protection of the public purse and the needs of the customer

  Where there is evidence of delay in payments due to official error a special payment can be considered provided that the circumstances of the case accord with the Departmental guidance. These payments are calculated in the form of interest using the Average Shares Rate supplied by the Building Society Commission.

  Arrears or overpayments of child maintenance are allocated to the tax years in which they accrued. Interest is then calculated separately for each tax year from the date of the initial error to the date the arrears or overpayment is paid.

  Financial redress may be appropriate in exceptional circumstances where, although the customer has suffered no actual financial loss, the Agency's maladministration has had an adverse effect on their life. This may have resulted in:

—  Gross inconvenience resulting from persistent error


—  Gross embarrassment, humiliation or unnecessary personal intrusion


—  Severe distress

K  A NOTE ON THE POSSIBLE IMPACT OF EU LEGISLATION ON HUMAN RIGHTS ON THE AGENCY'S POOR PERFORMANCE IN DEALING WITH ITS CUSTOMERS

  To prepare staff for introduction of the Human Rights Act in the day to day performance of their duties the Child Support Agency has commissioned a compliance audit of all internal and external guidance and advice. The Project will analyse the impact of the Human Rights Act on training issues, guidance about business processes and Human Resource issues.

  The objective is to identify all procedures, guidance manuals, notifications and leaflets where there is a potential that the Agency is not meeting the standards required by the Act. A programme of awareness training will be prepared to ensure that staff are aware of their own, and the Agency's, responsibilities under the Act.

L  AN ANALYSIS OF THE AMOUNT OF STAFF TIME EXPENDED ON ACTIONING PROBABLY/POSSIBLY UNCOLLECTABLE DEBT

  The Agency does not hold the requested information. The White Paper makes it clear that because of the complexity of the current legislation we cannot devote more than limited resources on debt collection or enforcement. And that we will not be able to shift that balance to any marked degree until the legislation is simplified.

  In the meantime we are trying to ensure that we focus our time on those cases that will make a difference to our customers by getting money flowing to Parents with Care and children will benefit directly however, this does not mean that other cases are ignored.

  As an ongoing process for improvement we are using private sector expertise to examine debt management and compliance procedures and identify improvements.

M  WHAT IS THE CURRENT TIMESCALES FOR THE INTRODUCTION OF THE CHILD SUPPORT REFORM?

  The Secretary of State recently announced that the new scheme for calculating Child Support would come into effect from April 2002. Existing cases will be transferred at a later date when it is clear that the new arrangements are working well.