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Child Maintenance

My Lords, it is all too easy to say that it is a failure of management and administration and it is all too easy to criticise those who have done their best to improve the situation. I pay tribute to my noble friend Lady Hollis, who has had to leave. She had responsibility for the CSA for some years. She is one of a number of Ministers who have done their very best to improve the condition of the CSA. The Government’s conclusion, which I am absolutely convinced is right, is that essentially the CSA was almost designed to fail in the first place. A couple of hours ago, I was interested to hearMr Alistair Burt speak in the Commons. He was Minister for the CSA in 1993. He gave two reasons. The first was retrospection—the fact that the CSA did not start with new clients on day one, but was meant to capture all those on benefits who were due maintenance. Secondly, the system was simply too sensitive; it was a charter for delay. I believe that he is right. In essence, a system was created in which too many people were forced to use the system against their will. If one were on benefits, most, if not all, the money paid over in maintenance was clawed back by the state, so there was no incentive on either side to make the system work. The fundamental change, and the answer to the noble Lord, Lord Oakeshott, on why C-MEC will work, is that we are altering the dynamics so that there are incentives to support parents who wish to do the right thing. We know that it is much better that private arrangements are reached between two former partners. If that is done, it is much more likely that resources will flow from the non-resident parent to the parent with care. At the heart of the matter, the only outcome that really counts is how to increase the amount of money that flows to the children. On HMRC, I believe that the approach that we are taking gives us the best of both worlds. We have access to HMRC information, which means that there will be far less delay and less dispute about the financial assessment of the non-resident parent. The fact that there is a new organisation devoted to dealing with those cases where private agreement has not been reached means that there is a much better chance of ensuring that money flows. The noble Lord, Lord Skelmersdale, supported the thrust of encouraging private agreements, but he rightly asked about the operational improvement plan, which is now in process. It is very importantthat we continue to encourage the CSA to improveits performance as a foundation for the new arrangements. So far about £320,000 has been raised as a result of the use of private debt collectors. That started only a couple of months ago, so it is too early to give a definitive view. Around 10,000 cases have been transferred over. It is also interesting that £400,000 has been raised through sending clients a letter that essentially says that, unless they pay up within seven days, their case will be referred to the private debt collector. This is the start of a better and more systematic approach to dealing with debt. The noble Lord asked about the caseload. My understanding is that roughly half the caseload on the books of the CSA relates to parents with care on benefits and half relates to private cases. I am happy to send him further details. He is clearly right: extending the disregard to parents with care on benefits under the old scheme will be a huge boost to about 40,000 parents and 50,000 children. Our aimis that, when new clients are accepted by the commission around 2010, a significantly higher disregard will be brought in at the same time, which will apply to all customers, whether they are new customers or existing customers who are carrying on with the state system. We have a figure of 7 per cent of birth registrations where the father is not named. In Australia, where naming is compulsory, the figure is 3.5 per cent. We can learn from that. We will explore the issue of vulnerable parents or parents with care who do not want the father named for one reason or another. We will have to be careful to ensure that their position is safeguarded, but the Australian position is clear and provides a good model. I say to the noble Lord, Lord Skelmersdale, that naming and shaming is not to be considered in isolation. One of the big problems of the CSA over the years has been a culture of non-compliance. We have to turn that round and make it clear that the system is about rewarding, encouraging and incentivising parents who, when they separate, do the right thing as far as their children are concerned. Where they do not, or where the non-resident parent is not prepared to pay, there has to be tough enforcement, of which naming and shaming is but one aspect. It is essential that we change the culture, and naming and shaming is an important element in doing that. The noble Lord, Lord Skelmersdale, asked about taking revenue directly from bank accounts. We will explore the scope of that with financial institutions. We have opened up constructive discussions. As for placing deduction from earnings orders far more quickly than is done at present, we want to pilot that to see how it works. We will discuss that with business interests as well. That is all part of a much more streamlined approach to assessment of the financial contribution, followed by much quicker enforcement if the non-resident parent is not paying. Finally, the noble Lord, Lord Skelmersdale, could not resist asking me about the IT system. He will know that it has had a troubled history, but a few months ago the contract was reassigned with a£65 million saving to the Department for Work and Pensions. There is a programme of fixes going on. I would not stand here and pretend that the system is performing as it was hoped it would when it was brought in, but it is gradually improving. That is important, because I want to end by paying tribute to the staff of the CSA. It is not their fault that the system has proved to be so difficult. They have done a good job in difficult circumstances, including the IT system. I pay tribute to them for their efforts.