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Baroness Morris of Bolton: My Lords, when I looked at the minutes of proceedings yesterday, I was more than a little surprised to find the Unstarred Question of the noble Lord, Lord Kirkwood, still on the Order Paper, given that the Government's intentions on the future of the Child Support Agency were made quite clear in a Statement on Thursday, repeated by the Minister here, and, at one moment, contributed to by the noble Lord, Lord Kirkwood, himself. I could suppose only that the Government's intentions were not as crystal clear as he would like.
I pass on the good wishes of the Conservative Benches to the noble Baroness, Lady Hollis. I hope that she is soon back in good and robust health.
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I believe that we all, except regrettably some absent fathers, are agreed on two things: that it is right that children resulting from failed relationships should be supported financially by both parents, and that no one is happy with how the Child Support Agency has performed the task of getting money from absent parents to the parent with care.
One other thing that we can all agree on—as we did in 1991, although I am not so sure now, having heard the 10-point plan—is that the previous system relying on the courts was inequitable since too often a case in one part of the country had a totally different outcome from that of a similar case in another part of the country, and the process was slow. We now know that speed has not increased under either the Child Support Agency as originally formulated or the Labour Government's reforms to date. Indeed, it has got worse. The speed of assessment is now so abysmal, with a backlog as of last month of 330,000 cases, that only root-and-branch reform will do.
One reason for this is the formula used for the assessment. Although it is intended to be fair it takes into account so many variables—around 100, I believe—that it is unbelievably complicated. The Minister shakes his head but perhaps he can explain how many variables there are. The Government's solution to this was a computer programme. Computers are formidable machines and should be able to apply this formula to each case relatively quickly—"should" being the operative word. Unfortunately, the programme should have been introduced in 2001, but was delayed because of what might best be described as teething problems. When there were, I am told, as many as 1,000 alterations between tendering and commissioning, "teething problems" is almost too kind an expression. How that was allowed to happen I do not know, but it should not be. Nor do I know how the 1,000 alterations arose. The Minister should tell us whether a whole succession of his civil servants wanted to tinker with the formula "or what?", as they say in Bolton.
Whatever the reason, there can be no doubt that in trying to be all things to all men, the formula is overambitious. The noble Lord, Lord Kirkwood, asks what the Government intend to do about it. Clearly, three things could be done: first, scrap it and start again; secondly, have a support system that operates on a flat rate per child, whatever the financial means of the absent parent; and, thirdly, have a graduated scale, depending on the salary of the absent parent. It would not surprise me to be told that there just might be a fourth option that nobody has yet thought about, and that this is one of the things that Sir David Henshaw, in his root-and-branch review of the CSA, will no doubt consider.
It is noteworthy that even after the internal review of Stephen Geraghty, the chief executive, a new review is now needed. It is even more noteworthy that the Government do not have a very good track record of
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reviewing the work and the operation of the CSA. Their 1998 review did not start to produce results until 2003 and, as I have shown, not exactly spectacular results at that. If history is to be repeated, it would mean that some children who are 12 years old today will never get any financial support from their absent parent.
Various other aspects of the problem, over and above the assessment process, need to be addressed. A notice has to be served on the absent parent, who may well have moved house and may well be in a second or further relationship, with children whom they are supporting, or not as the case may be. If the latter is the case, presumably more than one assessment will be necessary.
Having traced the absent parent, it is then necessary to extract the money and pass it on to the parent with care. Can he afford it? Certainly—that is if the assessment was made properly in the first place. Will he afford it? Well, that is the heart of the problem. He may well hide his income as far as possible or simply not pay. Here, to give them credit, the Government have come up with some ideas which, as I understand it, they will introduce well before Sir David reports. I refer to attachment of earnings orders, such as those used when people get into default with their utility providers. They also need to contract out "some" of the agency's debt recovery; why "some"?
The current improvement plan also involves using Revenue and Customs to help to trace absent parents. Credit reference agencies and private sector tracing agencies are also in the Child Support Agency's sights, to be used where the internal teams are unsuccessful. How many of those have been used up to now? What about the electoral roll—how useful is it, if it is used at all?
The accuracy of assessments is all-important. I have no doubt that many absent parents appeal. Will the Minister tell us something that my noble friend Lord Skelmersdale has been trying to get him to divulge for months—how many appeals are in progress, and what percentage of the case load does that represent? Communication with clients is of course a fundamental part of any business. So often the letters that the Child Support Agency sends out are written in such a complicated way as to be almost unintelligible. That can and should be improved by staff training, although I doubt that any amount of training would improve the accuracy of assessments.
The discrete operations of the Child Support Agency, namely assessment, case management, collection and enforcement, could all be carried out by separate organisations, either inside or outside the agency. According to the Guardian, the Secretary of State has told the unions that he has no intention of breaking up the Child Support Agency. I am told that the department has denied that. Whatever the truth of the matter—and perhaps the Minister could tell us—it does not bode well for industrial relations. Not only that, it must, to an extent at least, spike Sir David's guns even before he gets started. It also makes for
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confusion even now, as last week's Statement said quite clearly that Sir David was instructed to redesign the agency.
In his redesign, I hope that he uses the imaginative thinking called for by the right reverend Prelate the Bishop of Manchester and the noble Lord, Lord Kirkwood, and that he looks at better ways of sustaining relationships with separated parents. All the research shows that where parents are encouraged to maintain contact with their children, payment of maintenance is not an issue. We had long debates on that during the passage of the Children and Adoption Bill. Will the Government discuss with the Secretary of State for Education and Skills the possibility that Sir David Henshaw's remit includes the impact of decisions on access, currently managed by CAFCASS, on child support issues?
The department intends to give a £10 disregard to parents with care who are on social security benefits. However, that applies only to those receiving payment under the new system. By definition, as the noble Lord, Lord Kirkwood, and the right reverend Prelate the Bishop of Manchester have said, that is monstrously unfair to those parents who receive money under the old system. Why is that to happen? While I agree with the disregard, which will provide a little extra help to parents with care, surely to goodness it should apply to all parents with care. As the right reverend Prelate said, £10 is a lot to some parents.
This short debate could help to clear the air about some of the Government's intentions with regard to the Child Support Agency. However, we will have to await the Government's response to Sir David Henshaw's review to know exactly what they intend to do about all those thousands of children who are not currently funded by their absent parent. No review or redesign of the agency can get away from the basic problem: how can the state help families to stay together?
6.44 pm
The Parliamentary Under-Secretary of State, Department for Work and Pensions (Lord Hunt of Kings Heath): My Lords, I am grateful to the noble Lord, Lord Kirkwood, for giving us a further opportunity to debate matters to do with the Child Support Agency soon after the Statement that I repeated in the House on Thursday. It has been an interesting debate, which has raised a lot of interesting questions that will fall to Sir David to ponder as he redesigns the child support system in this country.
The debate also identified two things. Although noble Lords have enjoyed having a pot at the Government on some of the issues around child support, I sense behind that a real desire to seek some political consensus on the way forward.
Indeed, going back to 1993, there was all-party support when the previous Government produced the proposals, the White Paper, and then the legislation. There were some misgivings, but in the end the legislation undoubtedly enjoyed all-party support—and all-party disappointment when the 1993 scheme
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ran into so many difficulties from the start. In a sense, there is still general support for an efficient child support system that puts children at its heart and seeks to change the culture of so many people in this country who seem to think that it is perfectly acceptable to evade their responsibilities to their children. I am hopeful that, following Sir David's work, when we come to Parliament to announce the outcome of our deliberations, together we will find a way forward. I certainly take the point that if legislation is required, which it will be, we will enjoy holding debates about that.
It has also become clear that while there is focus on the operational issues and the problems faced by the agency, you cannot divorce those from the wider problems; the complexity of so many cases and those with links from one family to many other families in terms of the parent with care and the non-resident parent. Furthermore, staff at the CSA are often caught in the middle of aggressive, warring parents and have to take the brunt of aggressive communication. That is very difficult. There is a culture among too many people that it is okay to evade responsibility. While I would never seek to run away from the operational difficulties that must be faced, we need to recognise the context in which those have occurred.
I also thank noble Lords for their tributes to the noble Baroness, Lady Hollis, for her diligent scrutiny of the Child Support Agency over eight years and I am sure that we all wish her to be back in your Lordships' House.
The noble Lord, Lord Kirkwood, referred to his inquiry as chair of the DWP Select Committee which asked whether the agency and the child support system were fit for purpose. The Government's conclusion is that they are not fit for purpose. I know that the noble Lord, Lord Oakeshott, feels that we have taken a mite too long in coming to that conclusion, but I would defend the process that we undertook since that Select Committee inquiry.
It was right to appoint a chief executive in the shape of Stephen Geraghty, who had extensive private sector experience and to allow him to bring forward proposals in relation to the operational review of the agency. We took the view that the cost of his original proposals, which would have been £300 million and would have embraced conversion and migration—I shall return to that in more detail—could not be justified. We thought that it was too risky and the review identified that the system itself, not just the agency, was not fit for purpose. That is why we have asked Sir David to undertake the redesign. He does have a blank sheet of paper and it is very much up to him to come forward with his own proposals. He has not been given any steer by Ministers as to the route down which we might seek him to go. This is a genuine effort to achieve a redesign that will meet many of the points that noble Lords have raised.
The noble Lord, Lord Kirkwood, and the right reverend Prelate in particular have referred to the many cases that operate under the old system. That is absolutely right. Out of a caseload of some 1.5 million, over 900,000 are still being operated under those rules.
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When the new scheme was debated in 2003, the Government said that we would not be able to consider transferring the bulk of old scheme cases on to it until the organisational and operational arrangements were ready. Frankly, we are not ready, as was conclusively shown by Mr Geraghty's review. So we will continue to keep the decision under review.
In general, the introduction of the new method of calculation does not mean that the old method produced amounts that were wrong. The reality is that the old scheme was very complex, and I think that the noble Baroness underestimated the number of calculations that needed to be made under it. There is no doubt that the new scheme is simpler to operate and that it is a more efficient way of assessing maintenance. Indeed, I would say that one success that has emerged from the changes is that the new assessment process is easy to understand. If you have a straightforward case in terms of income, it is easy to work out from the CSA's website what you should pay to your children. Members of Parliament have many constituents asking for conversion as quickly as possible. Many non-resident parents go to their MPs because they think they will have to pay less under the new system, but in many cases they will pay more. We calculate that around 60 per cent of all converted cases will pay more, although only around 40 per cent of employed non-resident parents will pay more. It also needs to be remembered that if the non-resident parent is paying less, that means that less money is going to support the children. Arguments about fairness in CSA assessments do not always consider that side of the story, but of course I understand the issue of fairness in relation to benefit recipients.
I have investigated this matter and have talked to officials about it, but the advice that I and the Secretary of State have consistently received is that, if we were to extend the child maintenance premium to all relevant old scheme cases, it could be carried out only via a very costly clerical exercise because the IT is simply not configured to pay the child maintenance premium on the old system cases. We would be faced with using a substantial number of staff in that regard. The knock-on impact would be that the work that we want to do generally to improve the system could not take place. I shall continue to look at this matter because I understand the issues that have been raised, but I cannot promise that I will come forward with a solution that will provide optimism to noble Lords. However, the matter continues to be reviewed and we will also look to Sir David for advice.
In relation to IT systems—a matter raised by the noble Baroness—I have already explained that the formula is much easier to operate and much more straightforward. The IT issues have been very well documented. I simply say to the noble Baroness that there has been a reassignment of the contract with EDS. The sum of £65 million has been taken off the price that was originally expected over the term of the
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contract, and we have also been able to hold back a certain amount of money in lieu of good performance.
I shall not pretend that we have reached the point where all the defects have been put right—that will be a steady process. I do not believe that ultimately the system will ever achieve what it set out to do, but I think that we can reach a point where things are stable, where it can do most of the basic tasks and where staff feel happier about its performance.
I visited the CSA in Hastings today to meet the staff and I talked to them about the IT system about which there are always mixed views. We all rightly pay tribute to the CSA staff. It is remarkable how many staff have been there since the mid-1990s; they have stuck with it and are committed to the children. It is great to be able to pay tribute to those staff. Initially, when you ask the staff about the IT system, they say it is hopeless, but when you question them further, they acknowledge that they are getting used to it, they have got used to it, and the system is being improved. We can expect to see further improvements over the next year or two. I fully accept that if one were to compare the system as it is with what it was hoped it would be there is clearly a big gap.
I do not believe I can say much more about Sir David's redesign. Having met him and spoken to him yesterday, I am confident that we have appointed a really good person for the job. Not only will he pick up many of the policy issues raised by noble Lords, but he will also ensure that whatever design we bring forward is practical for operational implementation. Surely, we have learnt over the past 15 or 16 years that one can have as great and as sensitive a policy as one wants, but if it cannot be operated in an effective and an administrative way it will disappoint.
On families and mediation, I agree with all that has been said. Seventy per cent of the agency's clients are benefit cases; one in five of the parents involved has never lived with the other parent; and half of the non-resident parents never see their children. We really need to get down to the issue of family breakdown and relationships. I am very interested in the comments that noble Lords have made about mediation. The Australian experience will be very interesting to watch. I can assure noble Lords that the scope of Sir David's redesign concerns the total, holistic approach and is not simply confined to the operational issues of the Child Support Agency. By its very nature, that will involve other government departments. Of course, other government departments have a very positive role to play in dealing with these matters.
I say to the right reverend Prelate that money and IT are important. We have to maintain the CSA as it is at the moment because I can assure him that, if we do not, many more non-resident parents will run away from their responsibilities. That is the lesson and the experience of the CSA staff. At the same time, we want to change the culture and do everything that we can to encourage parents to do the right thing.
I shall not comment extensively on the 10-point plan of the noble Lord, Lord Oakeshott. I believe my right honourable friend the Secretary of State made it clear
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that we do not believe that the idea of simply transferring the CSA to HMRC is a reasonable or practical option, but I believe that there is scope for exploring with HMRC the opportunities for closer working together. We have already set up a project to examine how we might use HMRC tax information for the calculation of maintenance.
I am reminded that I should sit down now. I shall finish by mentioning passing the buck. I have no intention of passing the buck. I do not believe that deciding that the current system fundamentally is not fit for the purpose is passing the buck. That is a clear decision by the Government. The invitation to Sir David to redesign is not passing the buck. I can assure noble Lords that when we have Sir David's redesign
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and we make the key decisions we will not be buck passing; we will be bringing to the House and to the other place very strong proposals for the effective system of child support that we all want to see.
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