| Previous Section | Back to Table of Contents | Lords Hansard Home Page |
Child Support Agency
6.03 pm
Lord Kirkwood of Kirkhope rose to ask Her Majesty's Government what steps they are taking to improve the effectiveness of the Child Support Agency.
The noble Lord said: My Lords, I am very pleased to have the opportunity to introduce a debate on the Child Support Agency. I am not growling at the Minister; I am suffering from a lingering throat infection. When I start growling at him, he might know about it. I apologise to the House for the quality of my voice. I hope that people can make out what I am saying. I will be as distinct as I can.
The debate today is apposite. The Government have taken some very important decisions on this important area of public policy. I hope that the Minister will share with the House more extended thoughts about the Statement last week. There is a market outside the House for him. He is the responsible Minister and he has an important role to play in the development of the review that has been announced. If he can share his thoughts with us today, it will be to everyone's benefit.
I am told that it is customary when referring to the Child Support Agency to acknowledge the work of the noble Baroness, Lady Hollis. I have not yet had a chance to do so, but as a former chairman of the Select Committee which dealt with the issue over two Parliaments, I more than most can say that the noble Baroness was absolutely diligent and an expert in her subject. Any failures that may or may not have arisen in the systems employed by the agency were certainly
14 Feb 2006 : Column 1127
not down to her lack of interest in or knowledge of the subject. I hope that she is now recovering from her recent minor illness.
The House knows that the Select Committee conducted an inquiry into the performance of the Child Support Agency and published a report in January 2005. The committee was careful about making extreme recommendations, but at the time we were impelled to make the decision that the agency was coming to the end of what was reasonable in terms of whether it was fit for purpose. We came to the conclusion that the Government might have to consider whether to wind up the agency altogether and replace it with alternative plans for providing financial support for children in separated families. After the exhaustive report undertaken by the incoming Secretary of State, it has now been decided to have a major root and branch review to look at those alternatives. I welcome that. It is a brave decision and, in my view, the only option available to the Minister. I hope that, in now moving forward, we can make the best of a very difficult situation.
The position is difficult because big questions remain on legacy issues. Whole categories of people are in difficulties because they have been caught in the meltdown of the existing failed models. Obviously we want to be careful and follow the Government's thinking about what is to replace the agency in due course. It is tempting just to consider the "blank piece of paper" rightly handed to Sir David Henshaw as a reason for moving on from the failure of the past 15 years. I certainly hope that psychologically we can get into that way of thinking, but we cannot move on while the misery caused by the agency's catastrophic performance remains unaddressed. The agency's Operational Improvement Plan, which covers the years 2006-09, is intended to bring major improvements to cases taken on since 2003. We wish the plan well. But I want to draw attention to those caught up in the mess of the pre-2003 scheme. Today I shall highlight two issues.
First I turn to parents with care and on benefits who are trapped in the old scheme. We discussed this during the response to the Statement last week and we know that around 270,000 parents with care and on income support or receiving the jobseeker's allowance remain on the pre-2003 scheme. Their children get absolutely no benefit whatever from any maintenance paid. These parents and their children have been waiting for three years to be transferred to the new scheme in order to gain access to the £10 child maintenance premium. The Government of course concede that there is a problem in treating two groups of the poorest parents in different ways, but the argument appears to be that they can do nothing about it because of "operational feasibility and cost".
I understand that it may be difficult and expensive to identify those parents with care on benefit whose ex-partners are paying child maintenance and pay them extra. I do not think for a moment that it is easy, but perhaps I may suggest a solution that would make this a great deal simpler and cheaper. We should disregard
14 Feb 2006 : Column 1128
completely any child maintenance paid by non-resident parent where the parent with care is on income support or JSA. That is the system operated in Australia, where there is a 100 per cent "pass through" for parents out of work and on benefit. The cost of that has been quantified at some £230 million, which is a substantial sum. But against that sum one must set the considerable savings in administration which could be made by allowing the agency simply to pass on all the maintenance paid to parents with care without having to split the money where the parent with care is on benefit.
More important is the incentive for non-resident parents to pay if they know that all the money they are paying is going straight to their children and not being siphoned off to the Chancellor of the Exchequer and the Treasury. That incentive effect is clearly demonstrated in Australia in getting non-resident parents to be more reasonable about the way they react to their responsibilities and family duties.
After all that has been said, there is a basic argument of fairness. We know that lone parents with care on income support exist below the poverty line. The last figures I saw, contained in recent research carried by Bath University, indicate that a lone parent with a child aged five is 18 per cent below the poverty line after housing costs. This cohort of the population is intrinsically poor.
We also know that, controlling for other factors, receipt of regular child maintenance is strongly associated with leaving benefit and returning to work. That is playing with the grain of established government policy which is successful and I am sure that the House generally supports. More than that, we already allow working parents subsidised through the working tax credit to keep child maintenance payments that they receive, so how on earth can we justify less well off parents and their children being financially worse off in that respect? It is contrary to natural justice; Sir David Henshaw must look seriously at the issue and the Government must support him in doing so. Six years after rightly conceding that it was unfair that children in families on benefit had no direct financial gain from any maintenance paid and three years after introducing the child maintenance premium to rectify the situation, the Government now have an urgent obligation to play fair by families in this position.
I hope that Sir David Henshaw will also look at the second legacy issue, that of compensation for arrears which will never, in my view, be collected. The agency's Operational Improvement Plan frankly admits that "much of" the £3.3 thousand million owed in maintenance arrears since 1993 is "uncollectable". It puts this down to the limitations of the agency's power of enforcement. That is a huge and devastating admission for many parents with care. For 15 years they have had to rely solely on the CSA to collect and enforce maintenance payments which they are legally owed. These are legal entitlements under the statute created in 1991. Many of those families have struggled to raise their children in considerable financial hardship and are still waiting to receive many
14 Feb 2006 : Column 1129
thousands of pounds. There is no doubt in my mind that the agency bears a considerable part of the blame for the failure to collect the millions owed. As many parents with care will testify, it has repeatedly failed to take prompt and effective action—if any—to enforce non-resident parents' legal liabilities in many cases.
In parenthesis, however, I noticed that when reading the Statement last week, the Minister rightly underscored the important part played by the CSA's professional staff. They are as much the victims as some of the families. They were given systems that were not made to work. In any Child Support Agency centre I visited, I never left without thinking that the professionalism applied by the staff was remarkable in the circumstances. The Minister should take every opportunity to support staff morale. Given that they are operating in difficult circumstances, they do a very good job, all things considered.
The Government should not be allowed to walk away from the consequences of their own administrative failure. I hope that Sir David Henshaw will be asked to look carefully at whether there is any way that steps can be taken to compensate the hundreds of thousands of parents with care and their children who have suffered years of financial hardship as a result of the agency's failure actively to pursue collection and enforcement procedures of sums to which these families are legally entitled.
In conclusion, I should like to make two points which I hope Sir David Henshaw's review will consider. I refer first to the possibility of repealing Section 6 of the Child Support Act 1991. The House will know that, under that section, parents with care on income support or income-based jobseeker's allowance are required to apply for child maintenance as a condition of claiming benefit. This has turned out to be a singularly unproductive process for the agency, as the figures that the department has recently published have shown. It is currently costing the agency around £200 million to deal with benefit cases. In return, it is collecting £120 million in child maintenance. You do not need to be an accountant to work out that that is not a very clever return on investment.
Worse still, around 70 per cent of the agency's intake now comes via Jobcentre Plus, but nearly two thirds of the case load that is taken on in this way never gets as far as a calculation. The vast majority of cases are closed, because of a reconciliation or because the claimant goes off benefit. There is a whole raft of reasons. The department is doing an awful lot of work to no actual purpose. In contrast, 60 per cent of non-benefit cases result in an initial calculation and set-up. That speaks volumes about how the agency has a relevancy and can do a serious piece of work for non-benefit cases, in contrast with the difficulties which bedevil the whole system when people are required under Section 6 to take advantage of the Child Support Agency procedures.
The agency spends a considerable amount of staff time and effort on cases which never lead anywhere. That is a poor use of resources. It would be far better to
14 Feb 2006 : Column 1130
consider—I hope that Sir David will do this—a system where parents with care on benefit actively choose to use Child Support Agency in situations where they are likely to be materially better off and in situations where the agency could be expected to do a more professional job if a lot of the dead wood was taken away from it. If parents with care were given the option of choosing when to apply for the use of CSA, the whole system would be become an awful lot more workable, manageable, professional and fit for purpose.
Sir David should be asked to look carefully also at the practical and emotional consequences of family breakdown, again because of Australian experience. As we all know, the Child Support Agency intervenes at a very sensitive and difficult time in parents' lives. We know from research that a non-resident parent is much more likely to pay maintenance if he is still emotionally and practically engaged in the support and custody of his children. We know too that while most parents with care desperately need extra financial support that maintenance can bring, they can sometimes be reluctant to seek maintenance if it would jeopardise contact or make a fraught situation with an ex-partner even worse. Children can end up suffering long-term material deprivation and emotional damage when parents split up badly.
During the Work and Pensions Select Committee's inquiry into the Child Support Agency, it looked carefully at the family relationship centres in Australia. They provide a range of easily accessible services to parents and children at all stages of family life, including family breakdown. I hope that the Henshaw review will offer an opportunity for this country to look at whether those sets of circumstances and policies could work here. The Select Committee concluded that better co-ordination across all central government departments and agencies to help provide preventive family support systems at the early stages of prospective family breakdown would be a sensible public investment.
I hope that the Minister will take the opportunity regularly to update the House as Sir David Henshaw's report unfolds. I hope that we will be able to follow the steps that the Government are taking. We all wish the agency better fortune in future, but I hope that the Minister will agree with me that we cannot abandon the legacy issues arising from past systems which have prevented the agency working properly and with which people are still struggling.
6.19 pm
| Next Section | Back to Table of Contents | Lords Hansard Home Page |