6. In his report on the Agency's Client Funds Account for 1998-99, the Comptroller and Auditor General noted that 77 per cent of maintenance assessments made during 1998-99 were correct, and that the accuracy rate in earlier years had been much lower. These mistakes in maintenance assessments had led to errors in receipts from non-resident parents—35 per cent of receipts were for the wrong amount in 1998-99 compared to 33 per cent in 1997-98—and maintenance balances—79 per cent were wrong.[3] We asked the Agency how they could justify an accuracy target where over one in five new assessments would be incorrect, why the accuracy of receipts collected had deteriorated, and what they were doing to improve accuracy.

7. The Agency accepted that the current level of performance was not as high as it should be, and admitted that the accuracy of new assessments in 1999-2000 so far was only 72 per cent. Of the errors, 48 per cent resulted in the amount of maintenance being overstated and 52 per cent understated, and the main reasons for error were miscalculation and lack of information on earnings and rent and mortgage payments. But they told us that it was the best they could achieve given the complexity of the current assessment formula and the deficiencies of their existing IT system. Increased resources would not lead to any significant improvement, until the underlying assessment system was simplified, and this was the reason for the new legislation.[4]

8. The Agency's Client Funds Account for 1998-99 showed that levels of outstanding maintenance debt had now risen to over £1.7 billion (Table 1),[5] and suggested that the Agency was concentrating its debt recovery on those debts judged to be collectable.[6]

Table 1
SUMMARY OF OUTSTANDING MAINTENANCE BALANCES AS AT 31 MARCH 1999
	Full Maintenance Assessment Balances	Interim Maintenance Assessment Balances	Total
	£ million	£ million	£ million
Balances deemed as collectable or possibly uncollectable	511.5	178.7	690.2
Balances deemed as probably uncollectable written down in the account	387.6	682.1	1,069.7
Total	899.1	860.8	1,759.9

9. The Agency assured us that they try to collect maintenance from all customers and did not focus on soft targets. But following their last appearance before the Committee they had identified debt that was collectable, possibly uncollectable and probably uncollectable. The longer debts were outstanding the more difficult collection became and, inevitably, they did focus on those debts they believed to be collectable at the end of the day.

10. They pointed out that compliance had improved considerably over the last three years, with the proportion of the amount collected increasing from 57 per cent to 67 per cent in cash terms. Securing compliance was harder for some categories of customers, but they had been targeting one or two groups, in particular the self-employed where they were instituting new procedures which had markedly improved compliance. And one of the major objectives of the new legislation was to enable the Agency to stop spending so much of its resources on collecting information, so that they could move them into areas such as debt management in order to improve compliance.[7]

11. As a consequence of our earlier criticisms of delays in processing maintenance assessments, the Secretary of State set the Agency tougher targets for prompt clearance of maintenance applications, particularly those that were more than one year old. During 1998-99, the Agency improved their performance and cleared 62 per cent of new maintenance applications within 22 weeks. The Secretary of State also required the Agency to have processed all outstanding maintenance applications over 52 weeks old by 31 March 1999. The Agency made significant progress towards this, reducing the backlog from 424,000 cases to 48,000 by 31 March 1999.[8]

12. The Agency told us that they had further reduced the backlog to 43,000, and hoped to reduce this further to 20,000-24,000 cases. They pointed out that there were legitimate reasons for some delays, such as paternity disputes, and that because of these they would be unlikely to clear this backlog fully.[9]

13. In his report, the Comptroller and Auditor General drew attention to a range of initiatives the Agency were taking aimed at improving customer service, including more flexible working hours for staff to improve customer contact; more face-to-face interviews; and improvement of the Agency's Client Helpline and National Enquiry Line.[10]

14. The Committee asked the Agency about the standard of their customer services, especially as in the experience of some members, chasing up after assessments had been made and subsequent errors brought as many complaints from constituents as the formula itself. We also asked about problems with communication, in keeping customers waiting for replies, in passing customers from one member of staff to another, and the Agency's reliance on computer generated correspondence, which left many customers receiving letters in rapid succession and which often contradicted each other.

15. The Agency assured us that they had staff who were very committed, were working extremely hard, and had materially improved the position in the last few years under extremely difficult circumstances. However, in the early years of the scheme the Agency had suffered from a number of problems, all well documented, which had swamped the system, and left a legacy of error. Since 1997 they had started to work through this legacy, but the basic problems around complexity and an inadequate computer system remained. They were now getting to the stage where there were fewer people handling a case than there used to be. But until the new legislation and the planned new IT system had been implemented they would not be able to move to a fully personalised individual case officer or provide an end to end service to customers.[11]

16. The Agency told us that face to face interviews were now provided by a network of local offices. Some 600 staff were now based in a network of local offices, and they would go to peoples' homes, to other Benefit Agency offices, or wherever it was convenient for the customer. And the Agency had received extremely good customer satisfaction ratings from these interviews.[12]

17. In addition to face to face interviews, the Agency pointed to significant improvements in their telephone services both in terms of the hours of availability and the numbers of people working on the telephones. They were also moving to analyse their customer database, to help them manage the risks of certain types of customers, for example non-compliance by the self-employed, and to help target resources to those parents and children most in need. They were looking at reasons for variations in performance between individual benefit offices. And they had also improved the quality of the plain English of their notices and information given to the public and provided customer-handling training to staff. The Agency considered that this has led to significant improvements in productivity which had doubled in the last three years.[13]

18. Another significant development in 1999-00 was the introduction of the Decision Making and Appeals service, aimed at simplifying the way in which the Agency processes maintenance assessments and appeals. The Agency will now take a single decision on the whole case rather than on individual elements, making it easier for customers to understand. Clients will only be asked to supply information specifically relating to their case and reviews of incorrect or disputed decisions would be processed at the earliest opportunity. And an independent Standards Committee would oversee the work. The Agency hoped that this system would allow customers to better understand the maintenance application process, thereby encouraging compliance and also improving the Agency's efficiency.[14]

19. The Agency told us that experience so far showed that the Decision Making and Appeals system had led to real improvements. There had been an increase in the number of changes of circumstances requested by customers of around 25 per cent. It was helping the Agency with keeping assessments up to date. It had enabled them to speed up the time taken to process requests. Part of these improvements came about because the Agency now have a national centre which can provide guidance, and information about those aspects that are most relevant to improving accuracy.[15]

20. In his report, the Comptroller and Auditor General noted that in order to improve the standard of customer service, the Agency needed to have suitably skilled and motivated staff. However, during 1998-99, over 27 per cent of the Agency's staff left.[16] The Agency told us that in 1999-00, they expected wastage to fall from 27 per cent to under 20 per cent. This was a significant improvement, but rates were still high compared with the private sector, which would normally experience turnover rates of up to 15 per cent.[17]

21. In order to retain skilled staff, the Agency were trying to improve pay and remuneration. Many staff were relatively junior and towards the bottom end of pay scales, and in some cases were not paid as much as people working on check-outs in supermarkets. They were, however, extremely marketable because of the training the Agency gave them, and there were instances of new call centres being set up which had specifically targeted and advertised for CSA trained staff. So pay was a key issue, and in particular they were exploring ways of helping junior staff progress more rapidly up the pay scales. They were also increasing training and support, including management training. This included an emphasis on investors in people, involving them and training them and supporting them to do a very difficult job. They told us that they had also strengthened management of the Agency by recruiting more managers and increasing training. They were also importing particular types of skills and experience from the private sector, and in particular entering into a partnership with Deloitte Touche who were assisting the Agency by bringing their child support experience from the United States.[18]

Conclusions

22. The inadequacies of the child support arrangements and the Agency's information systems, and the Agency's poor performance ever since it was set up in April 1993 are well documented. Yet the fact remains that 5 years on, 23 per cent of new maintenance assessments made in 1998-99 were wrong, 35 per cent of receipts from non-resident parents were for the wrong amounts, and 79 per cent of maintenance balances were incorrect. All these errors affect hundreds of thousands of people at very stressful periods of their lives, and are totally unacceptable.

23. Compliance with child support assessments is an increasing problem, and total debt has now reached £1.7 billion. The Agency have taken action to improve compliance, by targeting those debts most likely to be recoverable, and by targeting groups, such as the self-employed, who have a track record of non-compliance. The growing mountain of debt will remain a problem, even after the new legislation is introduced and we look to the Agency to further develop its debt collection arrangements drawing on best practice elsewhere in the public and private sectors.

24. The Agency are relying heavily on new legislation which will simplify the child support arrangements and on new information systems, and we look at these later in our report. But in the meantime, we welcome the steps taken by the Agency to improve customer service through face to face interviews, improved telephone services, better targeting of resources, and improved communication. We also welcome the Agency's assurance that the new Decision Making and Appeals arrangements are leading to real improvements in customers' understanding of the system, and in helping the Agency speed things up.

25. Levels of staff turnover at the Agency are worryingly high, although loss of staff is expected to reduce from 27 per cent in 1998-99 to under 20 per cent in 1999-00. We urge the Agency to continue and strengthen the action they are taking to improve staff retention and skills, so that when the new legislation is implemented the potential gains are not reduced by staffing problems.

4  Minutes of Evidence Qs 1-2, 22-25, 43-44, 47, 50-55, 86, 97-98, 114-115 and Evidence, Appendix 1, pp 22-25 [Evidence submitted 28 February 2000] Back

5  CSA's 1998-99 Client Funds Account (HC 533 of Session 1999-2000), Notes 6 and 7 Back

6  ibid, Note 5.5 Back

7  Minutes of Evidence, Qs 3, 80-85, 126-129 Back

8  C&AG's Report (HC 533 of Session 1999-2000), para 3.6 Back

9  Minutes of Evidence, Qs 4, 116-118 Back

10  C&AG's report (HC 533 of Session 1999-2000), para 3.12 Back

11  Minutes of Evidence, Qs 60-69 Back

12  Minutes of Evidence, Qs 74-76 Back

13  Minutes of Evidence Qs 70-73, 89-91, 138-139 Back

14  C&AG's report (HC 533 of Session 1999-2000), paras 4.8-4.10 Back

15  Minutes of Evidence, Qs 156-157 Back

16  C&AG's Report (HC 533 of Session 1999-2000), para 4.14 Back

17  Minutes of Evidence, Qs 10-14  Back

18  Minutes of Evidence, Qs 5, 77-79, 140 Back