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Child Maintenance and Other Payments Bill

moved Amendment No. 2: 2: Clause 1, page 1, line 4, leave out ““a body corporate”” and insert ““an Executive Agency under the control of the Secretary of State”” The noble Lord said: This is another important aspect of the Bill that takes us into the question of whether we should have a body corporate, an executive agency under the control of the Secretary of State, or anything else. I shall speak also to Amendments Nos. 4, 5, 14 and 70. I hope that this will give us a chance to look at some of the questions arising from the David Henshaw report. It was a seminal piece of work that made a big difference, certainly to the way in which I looked at some of the issues that he was asked to study. Some of the other amendments, which I shall touch on briefly, deal with the operational improvement plan, the residuary body idea, staffing levels in the commission in future and professional staff rights to transfer. I will try to make this as expeditious as I can. The first question that needs to be asked is: are we are treating a clean break? If he said anything, David Henshaw argued a compelling case that child support should be delivered by a very different business. He also considered that, given the existing agency’s operating model and organisational culture, which we have seen since it was set up, it would be impossible for it to, "““morph successfully into that new way of working””." I was attracted by that and interested in his view. He advocated a clean-break approach. We talked under the previous amendment about the importance of the drag factor and legacy issues. He considered that there were two areas of activity. One was engaged in making a rebranded new organisation efficient and fit for purpose, dealing with customers who could be dealt with where cases could be kept up to date in real time from day one. That was a very different operation and organisation; it required different skills, organisational cultures and performance management from a residuary body that did nothing but chase down debts with the resolve, rigour and professionalism necessary to deal with the big backlogs. The Government quietly dropped Sir David's plans for two separate good-book, bad-book organisations. Instead, as I understand it, CMEC will have responsibility for legacy issues as well as new arrangements. Some questions arise about that. What is the Minister's answer to the charge that this is not a fresh start but a makeover? It will be impossible to argue anything else. The computers are the same; the contracts are the same; the chief executive is the same; the locations of business will be the same. Where is that fresh start, if that is what the Government claim it is? What considerations will the new commission inherit in terms of the agency's debt book? We know that £1.5 billion is regarded as collectable to date. That is a lot of money and could make a lot of difference to a lot of families. What is the commission’s priority in terms of its objectives on chasing that debt? What is the new operating model? There is some concern that a lot of decisions seem to be being made before the board has even been put together. I noticed last week that Mr Plaskitt has ordered a new computer system for resource management at a cost of £1 million. The new board and commission will not have looked at any of that, so my fear is that when the new board meets for the first time, there will be nothing much left for it to decide in terms of the shape and scope of the business’s operating model. Another point raised by Henshaw in connection with the new operating model concerns contracting out. Although I am not advocating this, Henshaw was very clear that the new commission would head towards what is essentially a commissioning body. We understand that the commission will make up its own mind on how to proceed once it is in place but we know that the current agency has been trialling the use of private debt collectors. I think that a target under the operational improvement plan was to collect £100 million of debt over three years. I have looked at the statistics but may not have understood them properly. However, looking at page 12 of the Child Support Agency report, I see that to date the debt collected via private collection vehicles has amounted to only £1.6 million, which is a long way short of £100 million. I also have some concerns about Vertex and how it is managing to deal with the clerical cases at CSA Bolton. Again, the Henshaw report had something to say about that, but I wonder how the new commission will deal with them. Other questions also arise in relation to cost. I believe that the government amendments in this group will be moved by the Minister, but the only thing that I have seen is the Second Reading speech. If I understand it correctly, the idea is now to move back to a Crown non-departmental public body. Is that just because we forgot about the VAT? I understand that a Crown NDPB does not pay VAT but, left to its own devices, an NDPB would. There was no provision for the £140 million of VAT, so the Government had to change their plans at the last minute and turn it into a Crown organisation. However, that is only a rumour and I have nothing more than that to go on. I shall be very pleased to be corrected but, if that was even a factor in making a change at the last minute, it shows a worrying level of incompetence. It would be very good to have that rumour squashed, and I expect the Minister will do so. There are other questions of cost relating to NDPBs and so on. I know that the commission will have to work within its budget but it is very difficult to work out exactly how much more expensive a commission of this kind will be. Because it is at arm’s length, there will obviously be location costs and new contract costs. We tried to work out the differences between a variety of models and the Government eventually decided to go for a Crown NDPB. I think that the Committee is entitled to be given some idea, plus or minus £50 million, of what its effect will be in the long run on the Budget and the public purse. Finally, in relation to Amendment No. 2, I have a whole list of concerns about the commission operating at arm’s length from the Government. We will come to this later in Clause 10 but I am particularly interested in how the Government will use the directions and guidance powers to keep the commission in line. I do not know whether there have been any discussions about how the powers will be used but they certainly mean that ministerial control over how the commission decides to fulfil its main objectives will be lessened in the future. I also have concerns about child poverty—a matter that we will come to later. It has to be acknowledged that the Government have done an enormous amount of work in that respect. Child poverty is to be a number one priority in things such as the public service agreements that have just been published in the Pre-Budget Statement. If the body is to operate at arm’s length, I would like an assurance that child poverty will be a high priority for it when it is up and running and that Ministers are confident they will not lose control over one of the key instruments of policy during the remainder of this CSR period. As to the operational improvement plan, it is a pity that we are not having this debate on Thursday. We will receive the quarterly statistics tomorrow and the noble Lord, Lord Skelmersdale, and I will fall on them with great relish over breakfast and look at some of the targets. The operational improvement plan is flat. There have been some successes, which you would expect with £120 million being spent on developing the policy. It will come to an end in 2009 and I am worried that it will fail or be only partially successful. This relates to Amendment No. 4. I give credit to the Ministers. The noble Baroness, Lady Hollis, was a key player in this and she was right to make the decision in 2000-01 not to take CSCS cases on to CS2 because the system would not have coped with it. There is an analogy here in taking a new system into operation without the operational improvement plan being completed over its programme timeline, but it had achieved the ambitious targets set out for it in the original document. I do not believe it will be complete by March 2009, although I think we will make progress. I hope we do. There may be a case for delaying the implementation of the commission until the operational improvement plan has delivered every last one of its objectives. Apart from anything else, that will deal with some of the legacy issues and give the new organisation a fighting chance of survival once it starts up. However, the noble Lord, Lord Skelmersdale, and I will use our ingenuity to make sure that the quarterly statistics are made available to the Committee, in whatever guise, within the rules of order in future amendments. The residuary body was a Henshaw idea and, from the way he argued for it, it certainly has some merit. I do not understand why one minute he was deep in the department getting advice from people who know what they are doing and being left to make a clear report on a residuary body, and then, a few short months later, the department turns its face against any such thing. It puzzles me why there should be such a change in such a short space of time. Amendments Nos. 14 and 70 concern staffing levels. The professional staff within the agency do a first-class job. They have been messed around a great deal—the uncertainty has not helped them—and they will welcome the move to a Crown NDPB. But if the move is only to get the VAT fixed in the first three years and we then go back to being a non-Crown NDPB, they will be less enamoured with that. I beg to move.