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Child Maintenance and Other Payments Bill

moved Amendment No. 1: 1: Clause 2, page 1, line 11, leave out subsection (2) The noble Lord said: My Lords, in moving Amendment No. 1, I shall also speak to Amendment No. 2 in my name and that of my noble friend Lord Addington. I hope that the Minister will not take it amiss if I ask him whether he would not mind exhibiting a little displeasure to his business managers for the lateness of the hour. Without making too much of a meal of it, this is very important legislation. Colleagues, acting in good faith and given the importance of the measure in front of us, have made arrangements for the two days that have been set for this Report stage, which has now been slightly disrupted. The events of earlier today could have been foreseen by the business managers, and I hope the Minister will protect the rest of the time that we need. I, for one, am certainly not going to be rushed into trying to do things mixter-maxter and at a very high speed just because other business, important as it is, has intervened. I think that we can all be a bit upset about the business management. Now that I have that off my chest, I turn to this Report stage, which is an important reflection on what was a very important Grand Committee stage. I have had the assistance, as I am sure have other colleagues, of pressure groups such as Resolution and One Parent Families/Gingerbread in trying to distil what progress was made in Grand Committee. There are government amendments on the Marshalled List for the next two days of Report. They are welcome as far as they go, and we will come to them in due course. I shall briefly summarise where I think I am left after reflecting carefully on the extensive Grand Committee proceedings. I still think that the Bill can be improved by looking at some of the objectives in Clause 2 and by examining, as Amendments Nos. 1 and 2 do, the bias that is arguably there towards voluntary arrangements. Later amendments on the Marshalled List look again at the amount of maintenance that parents with care can keep. More than anything else, the abolition of Section 6 now looks more and more, risky may not be the right word, but uncertain in terms of the Bill’s policy objectives. The more I look at this, listen to what people say, and discuss it with colleagues, the more I think that, as the Bill stands, funding for introducing a more voluntary way of accommodating these important demands and requirements may not really be safe. Amendments Nos. 1 and 2 anticipate looking forward to a unified system, which is entirely right. It will not come fully into effect until 2013, which is a long time in coming. But we have to make a start and we know that the Government are planning that. Amendments Nos. 1 and 2 will come into play in September 2008 if the timetable under the Bill keeps up to pace. After reflecting on the Grand Committee proceedings, I also worry that we are asking poorer households—poorer families and single-parent families—to fend more for themselves in a way that still is not entirely safe under arrangements in the Bill. Finally, some of the legacy issues are still haunting at the back and casting a shadow over everything that the new commission will do on arrears which, if I have done the calculations right, are still growing at a rate of £16 million per month. More arrears are being created than are being dealt with. That indicates that the CSA, and the commission when it gets started, will need to pay much more attention to debt recovery. In looking at Amendment No. 1, I also am concerned about the operational improvement plan. Perhaps the Minister could say something about that. The Child Support Agency quarterly statistics survey was published last week. The department rightly made hay with some of the improvements that had been made. The way in which case compliance and the cleaning up of cases have been addressed over the past 12 months has undoubtedly been welcome. But there are other less successful parts of the statistical analysis to which the House will want to pay careful attention when balancing these things. There is still a very poor picture in maintenance outcomes. The three-year operational improvement plan started in March 2006 and will not be finished for some time yet. We will need to watch that carefully because the original proposition on which this whole new system was built was that the operational improvement plan would deal with many of the legacy issues. I am not convinced that it has yet been able to do so. IT problems persist. The release of PR1 is delayed again. There is a second release on the Child Support 2 scheme, the general ledger scheme. It is billed as an important and significant productivity increase on the general ledger system which produces management information. Without it, it may not be safe to go into the new system in September 2008, never mind introducing the commission to its new responsibilities without that being sorted. Perhaps the Minister can say something about where we are with the IT problems. In particular, I noticed with some fear that clerical cases have accumulated to the point where they now number 36,900, a 94 per cent increase since the operational improvement plan began in March 2006. There are some really testing questions about information technology behind some of the proposals in these amendments. I should like to know when these major upgrades will take place and the implications for the start-up date of September 2008 and the commission in the longer term. Before I turn to the amendments, I have a final gripe. It is casual practice for the department to burrow into contingency funds for set-up costs for agencies of this kind. I know that the Treasury always has to approve sums of money, but we have had three or four slightly worrying levels of requests for money; namely, £300,000 in July 2007 for set-up costs, £1 million borrowed from contingency funds in January 2008, £2.4 million borrowed from contingency funds in April 2008, and, as the House knows, we have a contract for a £23 million Ventura support and guidance system. All those requests were in advance of Royal Assent. Call me old-fashioned, but I was brought up to believe that planning the significant financial expenditure for proposals of this kind should be done after Royal Assent and not before. Just saying, ““The Treasury says it’s OK and we’ll pay the money back once we have Royal Assent”” is, for my liking, taking Parliament a little too much for granted. Against that brief background, I turn to Amendment No. 1. This is an old argument that comes from our discussions in Grand Committee. It is not new, but for me it is now even more important. Amendments Nos. 1 and 2 suggest two approaches in order to redress the balance and ensure that there is no overt or explicit bias towards voluntary arrangements. They are fine and we understand the provenance of the idea behind them. They have their place and they will improve, as well as offering choice where it did not exist; that is understood and acknowledged. However, Clause 2(1) suggests that the default position for CMEC as currently set out is simply to make and keep up voluntary arrangements. That is how it can be read, and I think that it may well be read that way by the new commissioners. The wording of the statute is important. Of course voluntary can be better than statutory, but we have to be realistic about what we are asking some parents with care who are living on benefits to do in the brave new world we are creating. We have to bear in mind the financial and administrative background of the new commission: it must make administrative savings of £200 million each and every year. The business plan is launching the commission on the basis of 400,000 new cases a year and a 40 per cent increase in the number of voluntary arrangements is being planned for. We also know that the DWP will have to countenance a 5.6 per cent cut in annual expenditure over the course of the present Comprehensive Spending Review period. All of this is bound to bear down on the commission from day one, and there will be practical effects which will impinge on the amendments now before the House. A large number of parents with care will need to be actively encouraged to use the statutory maintenance systems that CMEC will offer in the future. Why is that? It is because many of them are in hostile relationships; that is the reality. Many of them have no contact with the non-resident parent, many have little knowledge of what is available through the statutory maintenance system, and many lack confidence in terms of what they can and cannot do in their personal relationships. If there is in any doubt about that, DWP research report No. 468 published last year makes the position clear. It talks about the confidence of parents with care versus that of non-resident parents about the introduction of private arrangements. It is no surprise that only 24 per cent of parents with care have any confidence that voluntary arrangements will work for them, whereas 57 per cent of non-resident parents think that it would work in their own circumstances. There is a clear difference of view on the arrangements that have to be made in households depending on whether you ask the individual with the income and cash on the one hand or the individual with custody of the children on the other. There is a clear conflict of interest between the parent with care and the non-resident parent. I turn to the support and information system. What the Government have planned is vital, but I am not at all certain that it will be equal to the task. I know that Ventura has been engaged and that a lot of important work is being done, but I remain to be convinced that the system will be capable of providing the active encouragement that I think will be necessary, if for no other reason than the obviously disproportionate bargaining power in the hands of the non-resident parent. Amendment No. 1 seeks to ensure that while voluntary arrangements will suit some people, and they are welcome in that regard, they will not by any means be suitable for all. The wording of Clause 2(1) does not reassure us that the commission will be able to be even-handed about the requirements necessary to support parents with care going into voluntary arrangements. Briefly, Amendment No. 2 takes another approach by promoting the idea of encouraging use of the statutory maintenance system. I think that CMEC should share this idea. I shall make one or two points to make the case. We all know that the DWP already has a strategic objective of reducing the number of children living in poverty over the next three years, and I am sure we all know—we discussed it in Grand Committee but it is worth reminding ourselves—that half of all children living in single-parent households are poor. So, if the Government’s objectives are to be achieved, these families will have to be targeted. Amendment No. 2 does that by introducing the idea of encouragement into Clause 2(1). The Henshaw report, which I read again recently, came to the conclusion that a great deal of trouble and time had been taken in the past transferring small amounts of money from poor households to poor households. It caused a disproportionate amount of administrative expense and we needed to get away from it. These small amounts of money are vital to parents with care. If the commission takes the Henshaw view that we can get a better bang for our buck if we go for bigger sums of money by targeting other people and attacking low-hanging fruit, and all the other clichés, we may again find that the poorest households in the lone-parent family client group are the ones that lose out. The people who establish successful voluntary arrangements are clearly in a better financial position in terms of housing, income groups and educational attainment. All parents with care who have these advantages seem to manage their voluntary agreements better—good for them—but what about those who cannot? Amendment No. 2 seeks to help such people. This tension needs to be resolved. In Committee, the Minister was at pains to say that the wording does not matter much because the information and support system will get alongside anyone who needs help and ensure that they get the service they need. However, I need to be convinced that every individual will be treated on a case-by-case basis. If there is any doubt in the mind of an officer acting on behalf of the commission that someone needs an extra bit of encouragement, that last mile must be undertaken by that professional person so that, when the decision is being taken by the parent with care about whether to go voluntary or to use the statutory maintenance system, we can make sure that she is doing so with full and informed consent. The amendments are important and this is a good place to start our discussions on Report. I beg to move.