---

Child Maintenance and Other Payments Bill

I have spoken to the government amendments and indicated previously that we would oppose the amendments tabled by the noble Lord, Lord Kirkwood. His Amendment No. 2 would see the commission operating as an executive agency under the control of the Secretary of State. Effectively, that would mean the continuation of the Child Support Agency. We believe that a more fundamental change is needed. There have already been several attempts to reform the CSA, which have failed. We believe that the move to a new organisation, operating under a new governance structure, will help provide a break with the past and build a platform for the future. The change in governance is facilitated by the break with the benefit system. The child maintenance system will no longer be a guardian of benefit expenditure and so there is no need to keep the organisation close to central government. The commission will be concerned with establishing financial arrangements between two individuals. Given the personal and sensitive nature of this work, we consider an arm’s-length relationship with Ministers, as provided by an NDPB, is appropriate. As an NDPB, the commission will have its own legal status, distinct from its sponsor department, and be led by an independent board. The board will be focused entirely on delivering a successful child maintenance system and will have the operational autonomy to make the changes it thinks appropriate. Within an executive agency there is not as great an opportunity for that single-minded focus. The most senior leaders of an executive agency are part of the leadership team of the entire department. They cannot always be focused on one key area of delivery, such as child maintenance. Amendment No. 4 proposes that we do not move to the new governance structure until the Child Support Agency’s operational improvement plan has met its targets and objectives. I agree that the successful delivery of the plan is crucial to the success of our reforms, providing a stable platform on which the commission can build. I understand why it may seem beneficial to wait until the plan—in particular, the forthcoming IT changes—has been fully delivered before handing responsibility for the child maintenance system to the new commission. However, we believe that that would not be the right approach. I shall answer the point made by the noble Lord, Lord Skelmersdale, about the IT system. I think that the discussion we had was about the delivery of a major upgrade to the system called PR1. As I understand it, that is still on track to be put in place towards the end of March. That is quite key to helping the business model under which the CSA and, at least initially, CMEC will operate. It is still being tested extensively. It is important to recognise that the operational improvement plan was designed prior to the comprehensive reforms that will be brought in by the Bill. Although the benefits that the plan will bring remain relevant, it does not incorporate the key building blocks of the new child maintenance system, such as the removal of compulsion, new enforcement powers and, ultimately, the new approach to assessment. If we were to delay a handover to the commission, we would risk delaying those changes. We believe that it is right to establish the commission and to give it responsibility for the remainder of the plan as soon as possible. That will allow for the development of an integrated change programme that includes the new measures enabled by the Bill. We believe that will facilitate the fundamental reforms we want and will help us maximise the number of effective arrangements as quickly as possible. Amendment No. 5 proposes that the Child Support Agency continues to manage cases under the existing schemes and to have responsibility for outstanding debt. The amendment suggests that that arrangement continues until 2010. That approach has certain attractions; in particular, it would have provided the new commissioning body with the opportunity of a completely clean break from the legacy of the Child Support Agency. We have two principal concerns, however. First, we do not believe that that approach would be the best use of resources. Instead of the new organisation building on the existing Child Support Agency, it would have to start from scratch. That would no doubt lead to significant duplication: a strong leadership team, for example, would be needed in both organisations. We would also be in the difficult position of having two organisations, with potentially different goals, competing for the same limited finances, and we could not flexibly deploy resources according to overall need, resulting in staff, IT and contracts in two chimneys. Secondly, we want to introduce changes to the child maintenance system as quickly as possible, and our reforms will do that. By the end of the next financial year, for example, we will have removed compulsion, extended the maintenance disregard and introduced new enforcement powers, and those changes are all powers of the existing schemes. If a residuary body were managing the existing schemes, the new organisation would have no part in the implementation of those crucial reforms, and we did not think that that would be right. Linked to that, we were concerned that two organisations would lead to an incoherent experience for clients. The interplay between the different child maintenance schemes is complicated enough without adding organisational barriers. After careful consideration, therefore, we decided to give responsibility for all aspects of the child maintenance system to the Child Maintenance and Enforcement Commission. The commission will work to a single set of objectives, allowing the process of change to be as seamless as possible for clients and enabling existing skills, knowledge and experience to be utilised to best effect. Amendment No. 14 proposes that the commission must ensure that an appropriate level of staff is maintained to fulfil its functions. I recognise the underlying concern behind the amendment. Appropriate staffing levels are crucial to the delivery of an effective service, and decisions on headcount should be taken only on the basis of the strongest possible evidence and the most rigorous business planning. The Bill already requires the Commission to act in that way. Clause 3 requires the commission to exercise its functions in a way that is both efficient and effective. The commission could not exercise its functions effectively with insufficient staff and would be failing in its duty if it did not secure the resources necessary to maintain appropriate staffing levels. I shall try to pick up on some of the points that have been raised. If I do not cover them all, I will happily have another go. Both noble Lords were eagerly awaiting the QSS. I am sure there will be a chance to debate the consequences of what those statistics contain later in our deliberations. The noble Lord, Lord Kirkwood, asked about Vertex and how that was all going. He will be aware that the contract with Vertex was to cover clerical cases, which were driven by failures in the IT systems of cases that could not readily migrate from one system to another. One of the consequences of the changes to the IT systems currently proposed is that the impact of those situations should be reduced, and therefore reliance on some clerical cases being contracted out should diminish. The noble Lord asked about the new operating model. That is down to the commission to develop; it will start with an operating model, but we want the commission’s expertise in developing that model. That touches on the point made by the noble Lord, Lord Skelmersdale, about staffing levels. Where those levels end up will depend very much on what that model is, particularly what happens on commissioning. Again, it is for the commission to develop those proposals through transition and at the end of transition. Both noble Lords raised the point of why the new arrangements are different, and I have touched on that in part. They are genuinely different for a number of reasons. The first is that they uncouple the arrangements from the benefits system. People will no longer be compelled to use a statutory system. As part of that, parents will be encouraged to enter into voluntary arrangements but to be aware of, have access to and be supported in accessing the statutory system if they do not. That is a significant change. There are major changes around enforcement powers, and we have an information and support service, which we will debate and discuss later on, that is simply not in place at the moment. We have arm’s-length governance arrangements, which is a change; that allows the expertise of a separate board to develop the business model and to address the challenges and objectives that we are imposing upon it. The noble Lord, Lord Skelmersdale, said that the system will be dealing with significant sums of money and commitments in an important policy area but will be entirely free from government. As the Bill identifies and the noble Lord, Lord Kirkwood, said, there are opportunities for guidance and directions to be given by the Secretary of State to the commission. We consider that directions would be few and far between; they are not necessarily the nuclear option, but they would not be a routine occurrence. We have provided in the Bill that directions would be subject to commercial confidentiality and would be tabled in Parliament. Guidance could cover a range of operational issues, small and large. At the end of the day, the commission will secure its funding from the department and therefore the normal sort of arrangements will be in place: there will be a framework, a business plan will need to be developed and targets will be imposed on the commission so that there is a link and accountability to the Secretary of State and to Parliament. Again, we are discussing the issues of the report that has to be made in due course. I hope that that has convinced the Committee that there is a distinction. This is a new start, although there is a prolonged transition to achieve it because we want to ensure that we do not do it in a way that means the IT systems cannot cope. We need to build that future over a few years. Having said that, I urge the noble Lord to withdraw the amendment.