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Children: Maintenance

Volume 476: debated on Tuesday 20 May 2008

To ask the Secretary of State for Work and Pensions how much unpaid maintenance was owed by the Child Support Agency to parents with care in each quarter since 2005; how much has been written off in each year since 2005 as uncollectable; and if he will make a statement. (200818)

The administration of the Child Support Agency is a matter for the chief executive. He will write to the hon. Member with the information requested.

Letter from Stephen Geraghty, dated 20 May 2008:

In reply to your recent Parliamentary Question about the Child Support Agency, the Secretary of State promised a substantive reply from the Chief Executive.

You asked the Secretary of State for Work and Pensions, how much unpaid maintenance was owed by the Child Support Agency to parents with care in each quarter since 2005; how much has been written off in each year since 2005 as uncollectable; and if he will make a statement. [200818]

Unpaid child maintenance is not owed by the Child Support Agency but by those parents who have failed to meet their responsibilities towards their children.

The Agency has increased the amount of child maintenance including arrears collected or arranged over the first two years of the Operational Improvement Plan, collecting a record-breaking £1 billion in the year to March 2008. In addition internal Agency figures show that the rate at which child maintenance debt has been growing continues to reduce. In the year to March 2008 child maintenance debt grew at a rate of £10 million a month, which is less than half the rate at which debt was growing in the year to March 2006.

The amount of unpaid child maintenance owed at the end of each quarter for the period March 2005 to March 2008 is set out in the attached Table 1 including Agency internal figures for the year ending March 2008. This represents the total owed by parents, which has accrued over the 15 years of the Child Support Agency's operation.

The Agency does not have the power to write off debt and has never done so. The Agency does, however, undertake an annual Debt Analysis Exercise based on a sample of cases, to estimate the amount of debt assessed as collectable, and that which is deemed either possibly, or probably uncollectable. The results of this annual sample exercise are subject to review by the National Audit Office as part of their audit of the Agency's accounts, therefore the estimate for the year ending March 2008 will be published with the Agency's 2008 Annual Report and Accounts later this year. The latest annual estimate of the collectability of unpaid child maintenance information is also available in Table 22a of the Quarterly Summary of Statistics, and has been set out in the attached Table 2 for ease.

It should be noted that classing a debt as possibly or probably uncollectable does not mean the Agency will not take action in the future to collect any outstanding money. The Agency will continue to make every effort to ensure parents fulfil their financial responsibility to their children, to provide a stable foundation on which the new Child Maintenance and Enforcement Commission can build.

I hope you find this answer helpful.

Table 1: Gross child maintenance debt (by quarter)

Month

Total gross debt (£ billion)

March 2005

3.3

June 2005

3.3

September 2005

3.4

December 2005

3.4

March 2006

3.5

June 2006

3.6

September 2006

3.6

December 2006

3.6

March 2007

3.7

June 2007

3.7

September 2007

3.7

December 2007

3.8

March 2008

13.8

1 Figures for March 2008, are internal Agency figures and are subject to review following National Audit Office scrutiny on the agency accounts for 2007-08.

Notes:

1. Figures rounded to nearest £0.1 billion.

2. Latest available data is March 2007.

Table 2: Gross child maintenance debt (debt analysis exercise)

April to March each year (£ billion)

2004-05

2005-06

2006-07

Total gross debt outstanding at year end

3.3

3.5

3.7

Of which:

Possibly uncollectable

n/a

0.2

0.1

Probably uncollectable

2.0

1.9

2.1

Collectable

1.3

1.4

1.5

Notes:

1. Figures are rounded to the nearest £0.1 billion.

2. “Possibly Uncollectable” debt refers to amounts outstanding which the debt analysis exercise revealed some uncertainty over whether it will be collected. The amounts are considered doubtful where, for example, payments have been infrequent or it has not been possible to establish an arrears agreement or impose a deduction of earning order.

3. “Probably Uncollectable” debt refers to the amount outstanding which the debt analysis exercise revealed is likely to be very difficult to collect due, for example, to the lack of contact with, or the personal circumstance of, the non-resident parent. In many of these cases the Agency has suspended recovery action until such time as the individual's circumstances change.

4. “Collectable” debt refers to the amount outstanding which the debt analysis exercise revealed is likely to be collected. This takes into account factors such as regular contact with the non-resident parent, where regular payments are being made or an arrears agreement has been set up.

5. From 2005-06 a provision has been included in the annual accounts to reflect the fact that the Agency may not collect an element of the possibly uncollectable debt, the accounts for 2004-05 have been restated on this basis, please refer to 2005-06 annual report and accounts. Therefore the possibly uncollectable figures for 2004-05 and 2005-06 are based upon the provision in the accounts only, leading to an increase in collectable debt in these years.

6. Figures for the period April 2007 to March 2008 will be published in the Agency's 2008 annual report and accounts.