[Mr Mike Weir in the Chair]
It is a pleasure, Mr Weir, to speak in the Chamber this afternoon with you in the Chair. I am not sure whether we are setting a record here, but women outnumber men by about five to one at the moment. That is an extremely good sign on an afternoon when Parliament is debating sitting hours.
This afternoon’s debate is about reform of the Child Support Agency. When I was elected, I expected to deal with a number of cases relating to welfare benefits, the United Kingdom Border Agency and organisations such as Her Majesty’s Revenue and Customs. What I did not expect was that one of my largest and most enduring case loads would relate to the Child Support Agency. In just over two years, my constituency office has dealt with 70 individual cases in which something has gone wrong, and I am just one Member of Parliament. In the borough of Charnwood alone, in December 2011 the CSA had a live case load of almost 2,600 cases.
Before I go into the details of some of those cases, it might be helpful if we consider why the CSA was set up in the first place. Back in 1993, when John Major’s Government introduced the agency, the aim was for it to pursue parents who failed to support their children financially. Savings were expected because parents claiming benefits from the state would instead find their income supplemented by a maintenance arrangement paid by the non-resident parent. I support that intention, but as I aim to show in this debate, it is clear to me and doubtless to other hon. Members that the system is not working and must be reformed, as children, through no fault of their own, are not receiving the financial support they need or deserve.
Despite an often heavy-handed approach, and costs of £440 million every year, half of children living in separated families in this country have no financial maintenance support in place. The CSA is expensive to run, with 40p being spent to collect each £1. Those costs often result from the Child Maintenance and Enforcement Commission running two separate, failing IT systems, and an additional 100,000 clerical cases—that is, paper cases—that the system cannot cope with.
Recent CMEC statistics show that 48% of complaints were from non-resident parents, and 50% were from parents with care, so it is clear that no one is happy with the current system. CSA data also show that more than 5,000 past and current CSA cases remain, with more than £50,000 in arrears. I congratulate CMEC on producing an excellent set of statistics. It should be congratulated on the transparency with which it produces its figures. It is a model for many other non-departmental public bodies and other arms of Government to follow.
Despite the statistics, there has been some progress, with deduction orders, under which money is removed directly from debtors’ accounts, having trebled since 2009. We need a simple and flexible system that supports families in making and sticking to their own arrangements, if that is possible, and that steers families through a tough time, keeping negotiations constructive and preventing a difficult family break-up from becoming worse or potentially destructive.
The problem with the current system from my perspective is, first, that it seems to invite conflict, and is often accused of being heavy-handed and far too arbitrary. The evidence shows that the most effective and enduring arrangements are ones that parents come to themselves. Secondly, the CSA does not offer value for money; and thirdly, enforcement may be ineffective, with huge arrears totalling nearly £4 billion in March 2012. A specific issue that I suspect other hon. Members will also speak about relates to self-employed partners paying child maintenance.
I congratulate my hon. Friend on securing this debate. Does she recognise that at the moment the system seems to penalise those dads and absent parents who want to do the right thing and want to contribute to their children’s welfare, but the CSA seems to have no power to grab hold of those who want to avoid the system, and to make them contribute to their children’s lives?
I thank my hon. Friend for making that point. He is absolutely right, and I will refer to a couple of constituency cases in which the non-resident parent, usually the father, is trying to do the right thing, perhaps by looking after the children on one or two days a week, but that is not recognised, when other people seem to be able to play the system. That is certainly something we in my constituency office have found.
I want to bring a human element to this debate. Numbers and statistics are all very well, but what I and other hon. Members—including the Minister—see in our constituency casework is the negative effect that the CSA is having on people’s lives, particularly children. I do not expect the Minister to comment on the individual cases I am about to raise—she has been good enough to see me twice with her officials to discuss two very difficult cases—but I feel that I owe it to my constituents, who often come to see me and my caseworkers in a state of some distress, to talk about their cases.
I shall start with poor enforcement. Karon Hollis is the mother of four children. All have the same father, who is self-employed and was using the accounting system to tell the CSA that he does not earn enough to pay her anything but the bare minimum of £5 per week—£5 for four children. Ms Hollis gathered evidence to show that his lifestyle could not possibly match what he was saying about his finances, but the CSA did not take her evidence, or lost it on the several occasions when she sent it in. Ms Hollis asked for our help with putting her evidence to the CSA, which has resulted in an assessment of £50 per week—10 times the amount she was originally getting. Why must ex-partners so often have to become detectives to get a fairer assessment?
My second case relates to Tracey Warren. It is currently with the adjudicator, who is carrying out a formal investigation. Ms Warren told the CSA 18 months before her ex-husband left the country that he was planning to go, and kept doing so, but nothing was done to get him to pay before he went. He has now moved to the middle east, and because Britain does not have a reciprocal arrangement with the country in question, the CSA cannot chase him for payment. The same issue has arisen in another case, in which the mother has moved to China.
Moving on to cases where paternity is an issue, I have had two cases in which the father queried the paternity of the child and, as a result, the whole CSA claims process ground to a halt. I cannot say whether that is a delaying tactic, but in one case, after a father had asked for a DNA test, he heard nothing further from the CSA for three years, when they contacted him to say he was £16,000 in arrears. Surely an efficient and effective system should not allow such a long period of silence to occur. Paternity should be swiftly established to allow the CSA system to proceed, or the CSA to cease involvement if paternity is not proven.
On arrears being allowed to accrue without the CSA seeming to notice, Mr B in my constituency had a deduction of earnings order so that maintenance was deducted from his salary every month. Unfortunately, the employer failed to pass that amount on to the CSA, and the CSA failed to notice. When the employer went into administration, my constituent, Mr B, was told by the CSA that he would have to pay the outstanding amounts all over again. He did eventually recover a percentage of the debt as part of the administration process. What I cannot understand is why the CSA failed to spot that it was not receiving the money from the employer in the first place.
An element of flexibility is needed in the system. My constituent, Christine Barrell, is claiming maintenance from her husband, who is self-employed. He has been “nil assessed”, which Mrs Barrell is challenging. Her husband’s business accounts, which will support her appeal, are not due until the end of the year, but the CSA needs her appeal within the next 28 days. Can that period be extended to reflect the particulars of this case?
Finally, I want to highlight those cases that I have already mentioned, thanks to the intervention by my hon. Friend the Member for Sherwood (Mr Spencer), in which the non-resident parent is trying to do the right thing and to maintain contact with their children by seeing them regularly. They often feed and clothe their children, as well as incurring transport costs to see them and to return them to the parent with care. But those costs are not reflected in the maintenance calculation, and the parent with care may not agree to the calculation being adjusted to help to meet those costs. In one case, the CSA recommended that the parent with care should share the child benefit they are receiving, but that was met with a flat refusal.
I hope I have shown that we have a system that no one seems satisfied with; so where do we go from here? In a recent survey carried out for CMEC, two thirds of parents with a family-based arrangement said they were happy with their situation. Only one third of CSA clients said they felt the same. Almost 90% of non-resident parents complied with their own arrangements, compared with just under two thirds of those who had payments assessed and enforced by the CSA. Most parents with family-based arrangements considered them to be fair, whereas only 42% of those whose payments were calculated and enforced by the state system did so. More than 50% of parents who use the CSA say that they could make their own arrangements if only they had the right help and support.
I welcome the Government’s proposed collaborative approach. Hopefully, it will mean that separated parents are able to avoid the conflict that often comes with CSA involvement by making their own, family-based maintenance arrangements whenever possible, and the Government have already committed £20 million to developing better co-ordinated local support services to help that happen. The money will be used to work with voluntary and community groups to make it easier for parents to navigate existing support, and to consider what additional help is needed.
There has been criticism of the charges that will be introduced to allow people to access the statutory system. The previous Government introduced a wide-ranging power to charge all parents as part of the Child Maintenance and Other Payments Act 2008, and the coalition is building on that legislation and on Sir David Henshaw’s report to the previous Government on the CSA, and implementing those charging proposals. I understand that there will be heavy discounts for those on the lowest incomes, and total exemption when domestic violence has occurred.
In her response to the debate, will the Minister say more about those charging proposals? Who will be affected, how will they work, and when will they be introduced? Will she also address an issue that has been raised with me by Gingerbread: what will happen to new and existing cases when the new system comes into force? We hope that parents who separate after the new system is introduced will be signposted to a range of support services and encouraged to make a private arrangement, but what about parents who are already caught up in the system? If, for example, a deduction of earnings order is in place, what will happen to that when the new system comes into force?
In conclusion, I hope I have shown that the current statutory child support system needs speedy reform. I appreciate, however, that it is difficult for any Government system to cope with the complexities of family life. Parenting is hard enough for both mothers and fathers, without having to make allowances for the access arrangements, work pressures and new relationships that make every situation unique, and that is why any child support system will, perhaps by necessity, be a fairly blunt instrument.
The hon. Lady is making a powerful case and we all agree that changes to the CSA are needed. Does she feel that it is important that the new system works smoothly immediately—something that has foxed all previous Governments? At a time of cuts and rising living costs, child maintenance really matters to families. We must not risk making things worse by getting things wrong and making the situation even more difficult for those families who are on the breadline.
I think the hon. Lady might have read the last sentence of my speech, and she is absolutely right. It will be interesting to hear speeches from all parts of the House, but we probably all want to get to the same place and ensure that families who cannot make arrangements receive help to do so, that children get the money they need in order to have the essentials required in life, and that families get the support they need. The hon. Lady is right to say that any transition must be as smooth as possible, and I am sure the Minister will address that point. We are talking about IT systems and family arrangements, and although things will never be entirely smooth, we do not want to see families put in a worse position than they are already in, or the unhappiness that I have already mentioned.
It is right to encourage families to make their own maintenance arrangements. However, the Government should consider how we can become better at getting assessments right in the first place and at enforcing arrangements when things go wrong, and how we can best help families to resolve such issues themselves. I hope to hear from my hon. Friend the Minister on those points.
As I have already hinted, it would be a terrible legacy if, in addressing all the problems I have highlighted, we were to introduce new instabilities into the new system. I look forward to hearing from the Minister about how lessons have been learned and how the system will avoid the situation—this is where I started my speech—in which half the children in this country who live in families that have separated have no financial maintenance support in place.
It is a pleasure to serve under your chairmanship, Mr Weir, and I congratulate the hon. Member for Loughborough (Nicky Morgan) on securing this important debate. It is an issue that, even during our discussions on reform, often comes at the end of a lot of other matters and has sometimes not received the full amount of time that it deserves.
I do not for an instant pretend that the CSA has not had problems, but I am concerned that we are making a wrong analysis of them, and it is possible that we could again make a gigantic mistake. Many mistakes were made when the CSA was set up in 1993, and one reason for that was because at the time, the views of those who worked in the field were almost totally disregarded.
I had better declare an interest because I am a family lawyer by profession although I am not currently practising. The CSA was introduced to meet a need because the previous systems were not working well. Then as now, many children and families were not receiving the money that they should have been getting, and the Government did not invent the CSA simply to be difficult. When it was introduced, however, it was an all-or-nothing system that was not terribly helpful and produced a huge work load right from the start. That was probably the wrong end to go from. I am still convinced that the CSA should have been started, at least in the early stages, on a slower basis, perhaps dealing only with some types of situation, and that we should have listened to some of those who were used to working in the field.
Many of the problems that the hon. Lady mentioned are endemic to the situations in which people find themselves, rather than caused by the Child Support Agency. The hon. Lady mentioned self-employed people, and they are always extremely difficult to tackle. They were extremely difficult under previous legal powers when we went to court, or used the system in Scotland that did not involve going to court—I will mention that in a minute. Trying to get from the self-employed what we felt they ought to be paying was extremely difficult, and their ability to produce accounts that made it look as if they did not earn much was notorious. That was always a problem, as were people who disappeared and went overseas. I had a client whose husband worked on oil rigs. Every time we got an earnings assessment for him, he would simply give up that job and take another. He was a scaffolder and very well paid, and his ability to thwart the system, as it was then, was great. I do not, however, believe that that situation would have been any easier for the CSA. We must address the real problems, and not necessarily blame the CSA.
Surely the hon. Lady will acknowledge that within her constituency there will be people who experience enormous frustration when trying to communicate with the Child Support Agency. People get moved between different offices around the country; the CSA loses information and does not acknowledge the simple facts that are happening in people’s lives. That is the fault of the CSA rather than the lifestyle of those individuals.
I must say that my case load on this matter is not as large as some people’s appear to be. Some of the cases are almost a legacy because they come from the previous system. I have some long-standing cases, and in my experience, although I do not seek to defend the CSA, it is not necessarily much worse than dealing with other large Government agencies.
I am worried that we are in danger of making another big leap based on a wrong premise. The Minister’s assumption—this also came through in the opening speech by the hon. Member for Loughborough—is that the statutory child support system is the cause of discord and bad feeling between parents. However, if we start off with a wrong premise, we will come to a wrong conclusion.
The hon. Lady cited research that indicated that two thirds of people with family-based arrangements were happy with them, whereas only one third of CSA clients were happy. Some 74% of those with family-based arrangements considered them to be fair, compared with 42% of those with CSA arrangements. However, the crucial point missing from that analysis is that the people who end up using the CSA are those who cannot reach family-based arrangements. Those who can reach such arrangements do so, and we are not comparing like with like if we come to that conclusion and decide that we should basically shrink the existing statutory system. If I understand the situation correctly, those currently within the system will be asked to close their cases and restart the process by trying to get a family-based arrangement. If they cannot, presumably they will come back through the process. The idea is to shrink the system due to the analysis that the CSA is what causes discord between parents.
My experience as a family lawyer is that separation is a very difficult situation. People do not separate because they are getting on well. They do not usually separate because they can communicate well. Often they are angry and often they have good cause to be angry. That anger is not something that is just stirred up either by the courts, which is one of the assertions that we hear, or by the Child Support Agency. People are angry. They do have difficulty getting money, and there are reasons why that will always be quite difficult.
Generally, when people separate, both partners lose financially. It is a financially difficult situation for them, and often it does not get better after a few weeks, months or even years of separation, because new liabilities come into play. People form new relationships and they find it even more difficult to cope. These things influence people’s attitudes to one another, and some people clearly are not willing to come forward to make an agreement. My concern is that we are making the wrong assumption—that having a statutory system is causing discord—and if we start from the wrong point, we will reach the wrong conclusion, and the solution will not be the one that cures the problem.
I would like to make a practical proposition to the Minister. It is drawn from Scots law and could fill a gap. The Government should think seriously about it, especially if they are determined to shrink the child support arrangements. In Scotland, it is possible to have not just the vague, family-based arrangement that everyone talks about, but a legal minute of agreement, which is enforceable in the same way as a court order would have been under the previous system. These minutes of agreement are usually negotiated with the assistance of solicitors. Many people have them drawn up, and they have worked extremely well. As I said, they are directly enforceable. All the same steps can be taken to enforce them as could have been taken with a court order. That model would enhance the system here tremendously. I offer it up, from Scotland, as something that perhaps the Minister will want to discuss with the Ministry of Justice. They may want to discuss how something such as that might be introduced into the English legal system to enable people to have something that, yes, is agreed—it is negotiated and agreed—but also has legal enforceability.
There is one minor point about minutes of agreement that the Minister might also want to consider. Under the previous CSA arrangements, after one year of having a minute of agreement, it was possible to go to the CSA and renege on it—that was possible for either partner, in effect. The Law Society of Scotland suggests that it would be better if that were a four-year period, and I concur. I think that if people have been properly advised and a minute of agreement has been drawn up—people can ask for a minute of agreement to be reduced in certain circumstances, such as if they have been coerced—a four-year period would be sensible.
Another couple of issues have been raised about how the much-diminished statutory scheme will work in the future. These have to do with finding out about the earnings and assets of some of those who are the most difficult to deal with. Under the present regime, the CSA can have regard to evidence about people’s assets and lifestyle that suggests that their income is not what they say it is. My understanding is that the Government propose to remove the effect of two regulations that achieve that at the moment. I believe that they are regulations 18 and 20 of the child support regulations. That, too, would be a mistake, because it would enable people to construct their affairs in a particular way. Regardless of gender, it is very frustrating for the parent with care, who is struggling, to see the other parent living what appears to be a fairly affluent lifestyle, yet able to present official records suggesting that they do not have the money to pay for their child. That makes people angry, but it often has to do with the attitude of the partner. The Government should reconsider that.
Fundamentally to take away the system and say, “We want people to make their own arrangements,” especially if they will not be legally enforceable, is a mistake and underestimates the difficulty of making those arrangements. Furthermore, that is happening at a time when changes to legal aid may make it harder for people to obtain legal advice so that they can turn the arrangements into more formal ones, and to obtain advice on what their rights are. Sometimes—perhaps not always but sometimes—informal agreements are not very good ones. Let us say that one parent says to the other, “I’ll give you 20 quid a week. That’s fine. Just don’t shop me to the CSA.” I know people who have been through that. The weaker partner, the one who has perhaps traditionally been quite afraid—I am thinking not just of domestic violence as it is narrowly defined—may well accept that when actually it is grossly unfair. People need proper support. I am not convinced that the £20 million that is talked about will be sufficient to put in place for people the level of advice, support and mediation that will be required if the Government press ahead with their proposals.
It is regrettable that, because the Government have framed the question in the way that they have and made this assertion—created this straw man—about the CSA being the cause of so much family discord, that will lead them into a situation in which even fewer children will get maintenance.
The hon. Lady is touching on a very important point. Obviously, the position will differ throughout the United Kingdom, but I have found through experience that the turnover of staff at the Child Support Agency is pretty significant, given the difficult task that many of them face. Does the hon. Lady agree that additional training of staff coming into the agency would go some way towards trying to deal with what are very emotive and difficult problems and could help alleviate the issues to which she has just alluded?
I thank the hon. Gentleman for his intervention. I agree. Obviously, we want staff to be well trained, given that they are dealing with very difficult situations. My point was that, if the official agency is to be shrunk to the extent that appears to be the case and people are to be largely discouraged from going down that route, on the assumption that it will be relatively easy for them to reach family-based agreements, that flies in the face of the reality of the situation that many people find themselves in after separation. I am referring to the fact that it is very difficult to conduct these negotiations and that that will allow people who just want to walk away to do so even more easily than they can at the moment. If the answer is to put in support services, they have to be put in at a level that will be effective. Up and down the country, people know that there are often waiting lists to get support and advice and that mediation is not necessarily easily available—and mediation itself has a cost. Not all mediation services are offered free to users.
It is important that we do not throw the baby out with the bathwater and that a generation of children do not lose out as a result of these proposals.
It is a pleasure to speak under your chairmanship, Mr Weir. I congratulate my hon. Friend the Member for Loughborough (Nicky Morgan) on securing this exceptionally important debate. It is on an issue that spans all constituencies. I cannot imagine being able to find an hon. Member who has not had many letters and e-mails about the Child Support Agency. The issues that parents face when claiming or being claimed against are massive; this is such a complex issue on both sides of the coin. I am sure that all hon. Members will agree with me when I say that one answer does not fit all, as every incident is so case specific; and it is near impossible to attain the best solution for everyone, especially when one law applies to all. I agreed with the Under-Secretary of State for Work and Pensions, my hon. Friend the Member for Basingstoke (Maria Miller) when she said that the child maintenance system was “broken”. I am pleased that the Government are taking action to reform the system, which is unworkable in most cases.
Does my hon. Friend agree that a frustration our constituents often face, whether they are the parent with care or the non-resident parent, is that they find it very hard to make their voices heard by the CSA, or indeed anyone?
I thank my hon. Friend for highlighting that important point. I would like a formal mechanism through which parents can share experiences and suggestions with the Government and the CSA. A kind of CSA users forum or a panel made up of non-resident parents and those with care could be initiated to feed back their experience regularly to Government. That would enable the CSA to improve its performance for parents with care and non-resident parents.
A major issue seems to be the CSA’s use of the deduction of earnings system. Non-resident parents complain that the CSA does not adequately monitor changes in their income or give them sufficient notice that a deduction of earnings is taking place. Deduction of earnings comes out of the non-resident parent’s pay before they see it, and the payroll department cannot make changes if anything is incorrect. Nothing can be done if an error has been made; the person paying the money has to claim it back and prove that errors were made, which can take years.
An absent father who lives in my constituency has never missed a payment. He was following the old rules, and then the departure was granted and he went on to the new rules. The CSA now says that he has arrears of £8,000, although he has never missed a payment. There appears to be a catalogue of errors, which are being investigated, including putting the wrong child’s name on correspondence, which causes unnecessary angst. The CSA is now taking £400 out of his wages per month for one child, which is ridiculously high. Because that money comes out of a deduction of earnings, the father has no say over the amount taken out—at one point, it increased considerably with no explanation. The situation has caused untold stress to him and his family, especially when the paperwork says that he should pay £42 a month.
Outstanding child maintenance arrears increased by almost £1 billion between December and March. If net weekly profit is over £100, £5 plus a percentage of weekly income in maintenance is payable. That may help to explain the complaint that non-resident parents often try to avoid paying child maintenance. The Government recognise that, and the Child Maintenance and Enforcement Commission has recommended a new scheme, which is at consultation stage. It would use HMRC-sourced gross annual income for the income child maintenance calculation. That method would reduce costs to business by £0.8 billion.
A major difficulty for the CSA occurs when the non-resident parent is self-employed. Self-employed status means that it is much more challenging to obtain accurate figures. Money cannot be taken at source or from a deduction of earnings. A case in my constituency has taken approximately 14 years. The parent with care is owed a considerable amount of money. The absent parent owns a number of properties, and a charge should be taken on his properties. Allegations have been made—I cannot confirm or deny them—that the absent parent has put his accounts into his partner’s name, so it appears as if he has no assets. I obviously do not know whether that is true, but it is clear that it is not a straightforward case.
The circumstances the hon. Lady describes are familiar to me, but would she not concede that such difficulties existed before the CSA and there would undoubtedly be difficulties whoever enforced decisions? Such cases were always hard to pursue, because people could do exactly as she describes.
I accept what the hon. Lady says, but I am sure that we can do something with the system to ensure that there are not such anomalies and long-standing cases. It has been 14 years and there is still no conclusive result. The situation needs to be addressed.
I must express my concern that in such circumstances, the only option left open to parents with care is variation mechanisms, such as lifestyle inconsistency tribunals, and the Government have announced their intention to scrap them. If the last line of defence for parents with care is removed, what hope is there for justice to be done and for children to get the money they are owed? Some non-resident parents are engaged in practices that, if this were income tax and not child maintenance, would be seen as tax evasion. I urge the Government to think again and ensure that parents with care have adequate opportunities to appeal against obviously perverse CSA assessments.
In another constituency case, the absent parent lives in a caravan, which is not an official registered address. That completely throws the normal process off balance, because the CSA has to send out officials to identify the tenant. In that case, the non-resident parent denied their identity to the CSA and had to be photo-identified by the parent with care. That process has taken months. The CSA should be equipped to deal with unusual situations. The person concerned has asked for face-to-face meetings, but is being ignored. I have even visited the regional CSA centre with my caseworker to discuss long-standing cases—the regional manger of my centre was a classmate of mine from school.
The CSA costs the public £450 million, and a typical case costs the taxpayer £25,000. Reform is desperately needed, but we must be exceptionally careful because botched reforms by the previous Government cost almost £1 billion, left thousands of families in hardship and were deemed one of the greatest public sector disasters of recent times. I am glad that we have a Minister and a Government who understand that reform is necessary and a priority, and that we have learned the lessons from the previous Government’s time in office.
It is a pleasure to serve under your chairmanship, Mr Weir. I congratulate my hon. Friend the Member for Loughborough (Nicky Morgan) on securing the debate. I will not repeat the excellent points made by the speakers so far, but will simply use a couple of examples from my casework to illustrate two recurrent problems from which the CSA suffers and which need to be addressed as part of the reform process, as we move to 2013 and that all-important change.
More than 4,000 families in Swindon use the CSA to recover maintenance payments. In my constituency, £6.9 million is owed in arrears—the highest figure in the south-west—so the number of parents, either with care or non-resident, who come to me, as a last hope in many cases, because of the problems they are experiencing, is no surprise. I will use two examples: one of a non-resident parent and one of a parent with care.
First, Mr D, the non-resident parent, was on tour with the Army in Afghanistan for six months. Prior to his tour of duty, he informed the CSA that it meant that he would be away and therefore would technically not be a shared carer, because he would see the children for fewer than the required 52 days. By way of a court order, he has the children for approx 70 days a year with split holiday time. He told the CSA, went on his tour of duty and came back to find that the CSA had finally acted and presented him with a large bill for arrears.
That is not acceptable. The least courtesy we can offer to serving members of the armed forces is to deal promptly when they provide information to the CSA, rather than reward them with a massive bill on their return. Mr D accepts that his tour of duty means a reduction in shared care and that consequences follow, but really, more must be done to improve the quality of how we deal with cases such as his. I do not believe that he and many others should be penalised in that way for serving and representing their country. Active service should be taken into consideration when such issues are being determined.
There is a broad-brush approach that does not help anyone. I find it hard to believe that no mechanism can be found to deal more sensitively with payment changes for serving military personnel. This is an ongoing problem, not just for Mr D but for countless serving military personnel, because they never know when they might be redeployed. I urge the Minister to consider a more flexible approach in those circumstances, so that we can do better by our armed forces. I have already raised Mr D’s case with the Minister and I am grateful to her for corresponding with me about it. Today I make a heartfelt plea, not just on Mr D’s behalf, but on behalf of thousands in the same position.
My second example illustrates what I regard as a poor use of enforcement powers. Miss C is a parent with care of a young child. She first contacted the CSA in 2006, but is yet to receive any money. She has had liability orders and has had the non-resident parent taken to court on two occasions, but still she has received nothing. Her bitter experience has taught her that the powers available to the CSA are not being used strongly enough. Those powers include the removal of driving licences and, yes, imprisonment. At the moment the maximum sentence for non-payment is six weeks, but there are clearly cases where that is an insufficient deterrent and maximum term, and it seems the courts are slow to remove driving licences or impose such sentences. There must be stricter penalties for evading responsibilities. More people are being imprisoned for animal cruelty—itself a serious offence—than for non-payment of child maintenance.
Miss C’s former partner is of no fixed abode, as in the example cited by my hon. Friend the Member for South East Cornwall (Sheryll Murray), and works in what I shall describe as an irregular way, for cash payment. I understand that it is proving very difficult for the CSA to trace and track activities of that nature, but other powers are available in such circumstances and they are not being adequately used. I urge that a different approach be taken with persistent non-compliance of this nature—we are talking about six years. There should be more automatic powers available to the successor body to the CSA to freeze and remove money from bank accounts, where available, and to impose restrictions on holding passports and driving licences, without the need for costly and cumbersome court proceedings.
In the years since its creation, the CSA has become an organisation that, despite the best efforts of many of its employees, is still failing far too many parents with care and non-resident parents. I urge the Minister to do everything she can to ensure that the reforms address some of the issues raised today.
It is a pleasure to serve under your chairmanship, Mr Weir. I will endeavour to keep my comments as brief as possible, so that colleagues may also contribute.
As has been pointed out, the Child Support Agency is a recurrent issue in every MP’s mailbag. I would like to raise one key aspect of the reforms with the Minister: the family-based arrangements. We know from past failures that parental responsibility is key to any workable CSA reform. Parents should be encouraged to make their own arrangements, with minimal interference either from the CSA or from the courts, which of course should be the last resort for those whose separation is so rancorous or potentially violent that private arrangements are not possible.
Like the Government and Resolution, an organisation representing 5,700 family lawyers, I support the concept of family-based arrangements wholeheartedly. However, many family law solicitors are concerned that the Government’s objectives will not be achieved unless those arrangements are enforceable. That is not because lawyers are looking to feather their own nests, but because they have a duty of care towards their clients—a duty of care that the CSA sadly lacks and which unenforceable agreements simply do not fulfil. Lawyers will therefore be obliged to recommend that clients refer themselves direct to the agency or pay for a court order. Family lawyers assure me that, if the agreements were enforceable, the duty of care would be fulfilled and their uptake might be vastly increased. However, there is a risk that the number of couples making such an arrangement will be pitifully small, due to the inability to provide security or certainty.
One might be tempted to argue that a parent who wants an enforceable arrangement should simply pay the fee and use the agency or the courts, but I would argue that logic is flawed in both its economic and social consequences. In terms of social policy, while the fee could be sufficiently high to discourage or even prevent those who most need CSA assistance from getting it, in economic terms the fee makes no substantive contribution towards the real cost of agency services. That cost will not fall, as levels of case load will remain near constant, prompting one to ask what the purpose of the fee is.
The logical and pragmatic answer is to establish agreements that, if possible, bypass the CSA and the courts, yet are none the less enforceable. There are several ways to establish that. Perhaps the simplest option would be to lodge the agreement with the CSA and rely on the agency for enforcement, passing the full cost of collection on to the defaulting parent, not the parent with care. One would hope that would be a significant disincentive to default. Secondly, the arrangement could be lodged with the court, so that in the event of default, the parent with care would look to the court for enforcement. However, as with the CSA option, that has cost and, most important, significant time implications for parents in financial difficulties.
It is with some trepidation that I follow the hon. Member for Edinburgh East (Sheila Gilmore), who not only is a family lawyer but has significant experience of Scotland, because I am about to launch a suggestion that a further option could be to replicate the system north of the border. I will not repeat her comments, but will add to the information she has already provided. I contend that the system in Scotland is far superior to anything thus far proposed in England in terms of simplicity, cost and speed of recovery of moneys due. It might also hearten the Minister to know that it also avoids the need to have an argument over who should be charged.
As we heard, Scotland has long had the benefit of a registered minute of agreement, which does not need to go before either a court or the CSA, and works because it is summarily enforceable. Minutes of agreement are easy to draw up, so they are cheap; and when it comes to default on child maintenance payments, the parent with care does not need to go to the CSA, with its long-winded collection processes, or return to court to seek an order. When the money does not get paid, the parent with care merely asks the sheriff’s officers—roughly the equivalent of an English bailiff—to enforce the agreement. The defaulting parent then has his or her assets frozen in a process that a Scottish lawyer described to me as being “quick and muscular”. They then have a choice: pay the maintenance or go to court to try to have their assets unfrozen. The reality is that, due to its enforceable nature, the minute of agreement rarely has to be enforced, as parties know the harsh measures that can be deployed in the case of default.
I do not suggest that we can expect the entire legal system south of the border to be turned upside down and made to replicate Scottish law. There are certainly different understandings about the use of bailiffs, but we can surely import the key principle: that the agreement is enforceable, and is enforceable quickly and cheaply. How could we replicate the Scottish system? Changing and improving the collection powers and methods of the CSA is an option and should be looked at, but the courts will ultimately use bailiffs anyway, so replicating the quick and muscular nature of a Scottish minute of agreement within English family-based arrangements, perhaps by making them summarily enforceable, would enable solicitors to recommend them and, most important for the Government’s objectives, it might make parents actually want them.
I can see no better way to reflect the spirit of the original legislation and meet the Government’s objectives than with a family-based arrangement that is speedily enforceable. If someone is destitute and has hungry mouths to feed, an arrangement that is not enforceable is useless, and an arrangement that is enforced many weeks or months after default is next to useless. The best solution is an arrangement that is enforceable speedily and, best of all, at no cost to the parent with care.
It is a pleasure to serve under your chairmanship, Mr Weir. I, too, congratulate my hon. Friend the Member for Loughborough (Nicky Morgan) on securing the debate—so much so that I have ripped up half my speech; but here we go. Hon. Members have given excellent examples and covered key issues in the debate, so I shall go straight to the heart of the two things that I think changes to the CSA should deal with, to make the agency truly effective. There are two loopholes that need to be addressed.
The first is undoubtedly the 12-month rule, which 87% of family lawyers say causes difficulties, because it enables the CSA to overturn court orders after just 12 months. What is the point of going to court to seek an order, when after only a year—and without the need for any substantive change in circumstances to be demonstrated—the order is void? As my hon. Friend the Minister has said before, the rule is open to abuse, and has become a tool whereby non-resident parents, especially the self-employed, can hide income to avoid paying the full level of support. Furthermore, family lawyers tell me that the existence of the rule skews divorce negotiations, with solicitors increasingly relying on spousal maintenance as a backstop because of the inevitable consequences of the CSA’s ability to scupper a court order after 12 months. The rule likewise promotes hostility, as after 12 months the parent with care returns to court to seek a pound-for-pound increase in spousal maintenance to compensate for what has just been lost through child maintenance under an agency review.
Finally, the 12-month rule is used as a tool for blackmail. I have been shown a shocking but sadly typical case, evidenced by the e-mail exchanges between the parties, of a woman who, having spent considerable sums in legal costs to secure a financial settlement, was threatened with having her children’s maintenance halved unless she agreed to dispose of a joint overseas asset that remained unresolved from the divorce. Her lawyers advised her against short selling. At exactly the same time as her ex-husband, a wealthy accountant working in risk management and financial services, was funding private education for his other children, he was threatening to use the 12-month rule to reduce his maintenance payments by 50%.
The rule was not designed to be used as a tool for blackmail. Indeed, correspondence between the lady in question and the Minister, which I have seen, showed that the Minister regarded that use of the rule as abusive. Therefore, I have to agree with the findings of Henshaw on the rule. It is used as a means of securing a better outcome for the non-resident parent, not the child, and the Government should consider scrapping it, or at least extending it to four years. That would give security and certainty for both parents, and prevent the current abuse.
The second issue that reforms must address is that of spurious zero assessments. It is perfectly illustrated by the case of a lady whose ex-partner, a Porsche-driving former executive who lives in a luxury docklands apartment and who she says has an extremely luxurious lifestyle, is assessed as having to pay less than someone on benefits. Despite his extravagant lifestyle, he simply claims he lives entirely on his new wife’s earnings. The mother however, forced to provide evidence to the contrary, lives in poverty, works full time in low-paid work, and last winter, at the height of the cold snap, was forced to accept charity food parcels and to beg £300 from a friend to put heating oil into her boiler when the tank ran dry. Often the only way the parent with care can attempt to secure some maintenance is through a lifestyle inconsistency appeal, where they can demonstrate that the lifestyle of the non-resident parent is inconsistent with his declared income.
It therefore causes me considerable dismay that the Government have now made clear their intention to scrap the only two effective measures—including the lifestyle inconsistency appeal—by which parents with care can secure support for their children from non-resident parents who seek to hide their real income and capital. Curiously, in the case I have just mentioned, despite claiming to have no income or assets, the child’s father is still able to fund expensive legal proceedings against the mother on a separate issue. It is bizarre.
The CSA needs to be reformed. That is self-evident just from the three examples I have given. I therefore ask the Minister to consider extending the 12-month rule to four years; to examine the issue of zero assessments; and, in particular, to maintain the right of parents with care to mount a lifestyle inconsistency appeal. Lastly, we need to ensure that the CSA has a duty of care. In this era of increased accountability, we need to ensure that Government agencies are held to account.
It is a pleasure to serve under your chairmanship, Mr Weir. I add my praise to that of other hon. Members for my hon. Friend the Member for Loughborough (Nicky Morgan), for obtaining this valuable and important debate. My hon. Friends and other colleagues have also made useful and admirable contributions. Many of the comments I wanted to make have already been made, so I will briefly voice the concerns of parents in my constituency.
Like many hon. Members who are present, I am contacted all too often by single parents who have struggled with the system and do not receive the support they need for their children. It is a tragic fact that up to half of UK children of separated families live in poverty, but it is one that is borne out by many of the cases I have assisted with in Gosport. The failures in the Child Support Agency, whether they arise from poor administration or bad decisions, have had a direct impact on the well-being and security of children throughout the country.
The hugely valuable Gosport citizens advice bureau has dealt with almost 100 CSA problems in the past year alone, and that highlights the instability caused by the CSA’s failure to secure payments. Most frequently, parents fall into arrears with their rent or mortgage, and then face the threat of losing their home, which of course gives rise to many other issues. One disabled lady in my constituency was advised by the CSA not to bother applying for child support at all, as her two children were 15 years old. That meant that she could not afford to stay in her home, in spite of her significant care needs.
As my hon. Friend the Member for South East Cornwall (Sheryll Murray) mentioned, the often irregular and unpredictable actions of the CSA also cause problems for non-resident parents. In one case, the CSA took payments ranging from £400 to £600 over a number of months from one of my constituents, without any notice. While it is without doubt the duty of both parents to support their children, such actions mean people suddenly find themselves unable to pay their own household bills.
I am also frequently left baffled by the catalogue of errors in the administrative handling of CSA cases. By the time many constituents approach me, they have endured months or even years of inaction, as other hon. Members have said. When contacted by my office, the CSA often, to its credit, gets things sorted relatively quickly, but that raises the question why it should be necessary for things to get to a stage when someone needs to contact their Member of Parliament.
That is why I welcome the Government’s reforms to the CSA. So much time and money is lost in its complex, creaking bureaucracy and the Government are right to do all they can to empower parents to come to family-based arrangements. However, in the light of my experiences in Gosport, I seek reassurance from the Minister that the Government will not neglect those for whom family-based arrangements, negotiation and collaboration are sadly not an option. Many people in my constituency have ex-partners in the armed forces, for instance, which presents greater challenges as their long periods of absence from the UK mean that they are not around to take part in the negotiations, which take time.
My hon. Friend the Member for Loughborough mentioned—as, indeed, did virtually every hon. Member who spoke—the problem of those whose ex-partners earn very little on paper, although the new car on the drive and frequent sunshine holidays belie that, and suggest more cash in hand. It may take significant joined-up thinking between Departments to address that, but we must do so in the interests of fairness, and for children’s long-term well-being. I wonder if the Minister has any thoughts on how to address the issue. It is vital that the Government’s far-sighted reforms should put vulnerable children, and, indeed, common sense, at the heart of all we do.
I echo the comments made by other hon. Members: it is a pleasure to be here under your chairmanship today, Mr Weir, for this short debate on the Child Support Agency. I congratulate the hon. Member for Loughborough (Nicky Morgan) on securing the debate, and hope she will agree that she was well supported in the contributions made by my hon. Friend the Member for Edinburgh East (Sheila Gilmore) and the hon. Members for South Derbyshire (Heather Wheeler), for South East Cornwall (Sheryll Murray), for South Swindon (Mr Buckland), for Romsey and Southampton North (Caroline Nokes) and, last but not least, the hon. Member for Gosport (Caroline Dinenage).
What we have heard today shows how complex child maintenance is. I listened carefully to the various cases with which MPs illustrated what they were saying. Frankly, no two of those cases were the same. If we multiply that by 650 MPs and multiply that again by the number of families who find themselves in a period of stress, perhaps we will appreciate the challenge that all of us face in trying to design a system that reflects all those individual situations. They range from the example that the hon. Member for South Swindon gave of the soldier in Afghanistan to the example that the hon. Member for Gosport gave of the disabled parent trying to keep her children. How do we come up with a system that deals with all those situations?
We should encourage more people to make voluntary arrangements. However, as my hon. Friend the Member for Edinburgh East—who is an expert on these issues—indicated, the people who make the voluntary arrangements are not the ones who need the state to intervene or facilitate. They are the people who come to what we could call an amicable separation and who understand that parenting, and the responsibility for parenting, is a joint effort, in terms of providing both emotional support and financial support. Sadly—and it is sad—not every couple can separate in that way. I think that it was the hon. Member for Romsey and Southampton North, who I understand may also have some experience in—
If the hon. Lady is not a lawyer, she should get a Bachelor of Laws degree, because she certainly sounded as if she had that sort of hinterland; studying an LL.B, perhaps part-time, might be an opportunity for her to take. Anyway, she highlighted some of the issues about how people try to manage these things.
Having said that, I must say to hon. Members that some of the situations that have been described today are hopefully not quite indicative of the changes that have happened in the CSA. I will just refer to a comment from a former Chairman of the Public Accounts Committee, which I think some hon. Members will probably agree with. The BBC reported:
“The public accounts committee said the CSA had a catalogue of complaints, a backlog of cases, and poor enforcement of uncollected payments”
and that the PAC said the CSA was one of the
“greatest public administration disasters of recent times”.
That was the view of the PAC in 2007, when it was under the chairmanship of the hon. Member for Gainsborough (Mr Leigh).
In May of this year, the PAC said:
“The Commission has made real progress in recent years but the challenges it faces”—
and hon. Members have illustrated some of those challenges today—
“in supporting separated families and securing maintenance payments for children are serious.”
So there have been significant changes, and the hon. Member for South Swindon remarked on the range of enforcement actions that exist and that were supported across the board; the Minister was in the House at the time. We had to realise that sometimes the carrot might not work and that sometimes it is about the stick. We can argue about whether six weeks is an adequate sentence, but the difficulties that people would face if they had their driving licence withdrawn, as well as all the other issues relating to enforcement, would really focus the minds of many people.
As a constituency MP, I have had nothing like the volume of CSA cases recently that I previously had. Ten years ago, I would have had a little queue of parents—both with care and non-resident—complaining about all the issues that have been highlighted today. I can now count on one hand how many live cases about the CSA that I have. I do not know if there is a particular problem in Loughborough, but I am just being frank with hon. Members in saying that I have seen a significant change. That is not to say that I do not occasionally have cases where somebody has had a wage deduction charge that has been wrongly applied—
Mr Weir, I hope that you will agree with me that there must be a change in the atmosphere in Scotland, although I have to say that it is nothing to do with your political party. My experience is not the same as that of the hon. Lady. I can only put my experience on the table, in the same way that other colleagues have done.
Since the range of enforcement actions have been introduced, I have seen a significant downturn in the number of CSA cases. That is not to say that there have not been occasions when people have come to me and complained about the administrative errors at the CSA, which are unforgivable, or about the fact that the wrong assessment has been made. Those are the types of problems that have been highlighted in the debate today.
The comments that I quoted from the two distinguished Chairs of the Public Accounts Committee are intended to show that there have been changes in the CSA. The reality is that all of us have to wrestle with the legacy of a flawed initial approach; that includes the Minister, who is doing so quite admirably. The introduction of the CSA had joint-party support at the time, but it was rushed. The technology was not up to it and the scale of the problem in those initial years was grossly underestimated. Perhaps because we always want to believe the best of humankind, the idea was that if we suddenly introduced the CSA, everybody would conform. That was not the reality, as we know from individual experiences.
I am sure the Minister could tell us how many connections have to be made just to reach a conclusion in a single CSA case. Reaching a conclusion is quite a complex business; everything has to be tested. As MPs, we all know that someone can have a perspective on a particular case that might not fit with what another person thinks, whether that case is about the CSA, a housing complaint or any other complaint. So, all those checks have to be made in each case. I am trying to illustrate that this problem is not easy to solve, and there are some questions that I hope the Minister will address, which have been raised by colleagues in her own party as well as by my hon. Friend the Member for Edinburgh East.
I echo the advert that the hon. Member for Romsey and Southampton North gave for the Scottish legal system. Minutes of agreement are a good vehicle for getting parents to come to an understanding and to recognise that such an agreement is not something they can sign off and then just park; it is legally enforceable. That makes a significant difference to how those agreements are seen in Scotland.
The hon. Lady also suggested that such an approach could be exported, or perhaps transferred—I do not think we are quite into exports yet, Mr Weir, from Scotland to England—into the English legal system. I echo that suggestion, which the Minister might like to consider, although I appreciate this issue is not totally within her domain. Such an approach is an excellent example of how the legal system can formally—but almost informally—make something happen. Things are done between lawyers, and as a lawyer yourself, Mr Weir, you will know that in Scotland one always trusts the word of a Scottish lawyer. The Minister should look at that issue, which I know the Law Society of England and Wales and the Law Society of Scotland have highlighted in their response to the consultation. Interestingly, the Law Society of England and Wales has said that family-based agreements are unable to command support because they are not enforceable, and that they add to the existing uncertainty.
We have all seen examples of how difficult it is to pin somebody down about their lifestyle and what they tell the CSA is their income. Before there was investigation and enforcement within the CSA, I had a long-standing case involving a woman who was married to a high-profile person who was returning an income of almost zero. Frankly, everybody and their dog knew that that was not the case, but the woman had difficulty in dealing with the situation. I think that is why there is some surprise that, given the Minister’s views on trying to get a consensual approach to arrangements, regulations 18 and 20 will, I understand, be withdrawn, and I hope that the Minister can throw some light on that.
I thank the Law Society of Scotland for its excellent comments in highlighting this problem. It is concerned that a change in the regulations, whereby the parent with care, and the CSA, could challenge the lifestyle of the parent without care,
“could allow non-resident parents with well-informed advisers to be navigated out of the child support system to the detriment of the children concerned.”
I suppose that that is the flipside of the lawyer. The lawyer will act in what he or she sees as the best interests of their client and, in those circumstances, that might be to try to navigate their way around—that is the sort of neutral term I would use.
Finally, I have one or two points to put to the Minister, which have arisen out of the recent Public Accounts Committee report. One is on the charging of parents, and a Member has already asked: if it is only £20, what is the point, because it will not even cover the costs, and there could be an element of tokenism? I certainly agree that that aspect would perhaps have been better left as it was. There is a view that the introduction of fees might well make child poverty worse, and that it might act as a deterrent. Given that some people will be on extremely low incomes, £20 might just be the deterrent that will put them off.
The Public Accounts Committee also identified that the IT system that has been introduced to save money is already running late, and every month’s delay will cost £3 million. [Interruption.] The Minister smiles in that enigmatic way that most Ministers before her have smiled about IT and Departments. Given that IT systems have been the bane of the CSA’s life, we need some—any—reassurance that she has this under control. The other related issue is whether a new IT system can be installed and tested while an existing programme is still being delivered. Those of us with accounts in the Royal Bank of Scotland and NatWest have perhaps seen an example of things going wrong when an incident happens during the running of a new system. I seek the Minister’s reassurance on that matter.
My hon. Friend the Member for Edinburgh East asked what would happen to the case load. Is it a zero-sum game? Will the current case load just be wiped, and will people have to say, “I want the CSA to be involved again”?
I hope that this has been a good discussion for everyone here. We have constantly to monitor the CSA. This is not an easy problem, and none of us should ever think that we can invent an IT system or an organisation that will solve the complexity of the emotional problems resulting from the break up of a relationship where children are involved. We only need think of our own families’ and friends’ experiences to see exactly what the pressures are, even in the most amicable of circumstances. In some ways, we are asking the CSA staff to work miracles in very difficult circumstances, and although they have come in for some criticism today, I think the majority of them work efficiently, to a high standard, and as compassionately as they can, within the parameters set by politicians.
It is a pleasure to serve under your chairmanship, Mr Weir. You have a tendency to chair a lot of our debates on welfare.
I congratulate my hon. Friend the Member for Loughborough (Nicky Morgan) on securing the debate. It is difficult to do justice to the wide range of issues raised by Members on both sides, but the debate has left me with the overwhelming feeling that the system is broken much more fundamentally than just a broken IT system. I may have smiled wryly before because, when the right hon. Member for Stirling (Mrs McGuire) referenced IT systems, I had a vague recollection, which officials have just confirmed, that the new future scheme was supposed to have been introduced under a Labour Government but has been delayed considerably since its inception—hence the wryness of my smile.
I think the right hon. Lady misunderstands me. I mean the introduction of the future scheme, which was considerably delayed under the previous Administration.
I am also somewhat surprised that Stirling seems to be atypical. Although the right hon. Lady might have only a handful of cases or fewer troubling her postbag, the statistics say something considerably different, which is that the Child Support Agency receives more than 20,000 complaints every year. I know that the agency’s chief executive is absolutely unhappy about that and is doing a great deal, working with staff, to do something about it, but it is indicative of the situation facing us.
My hon. Friend is right that as a Government we have a duty to ensure that we have a system that operates correctly for families. I would like to take her back a step, though, to look at the fundamentals.
The reality is that every child in this country has two parents who have a commitment to that child for life. For too long, the evidence has been conveniently ignored that children who live in a stable family do better than those who do not, and the most stable families that we have are married ones. This Government do not ignore the evidence. My hon. Friend the Member for Sherwood (Mr Spencer), who is no longer in his place, was right to say that both parents have a right to stay involved in their children’s lives. I applaud the work being done by my colleagues in the Department for Education to make sure that that will happen more readily in the future.
Children thrive when both parents take an active role in their lives, and evidence from elsewhere in Europe underpins that. If adult relationships break down and parents do not work together to ensure that they both continue to play an active role in their children’s lives, it is the children who suffer. For me, that is the starting point for today’s debate. Having the opportunity to reframe the subject is important for all of us here.
The hon. Member for Edinburgh East (Sheila Gilmore) got it wrong, I think, when she said that we are trying to say that the CSA causes animosity. The Government are not saying that; we are saying that the CSA is making the situation worse not better, and at a cost of almost £500 million a year that is completely unacceptable. For too long, the child maintenance system has played a one-dimensional role—pretty badly—focusing almost exclusively on money transfer. IT breakdowns apart, perhaps that is why it has fallen so short of the mark and why so many Members have taken part in today’s debate. In the past, the Government have spent almost 10 times more on the CSA, its IT systems and administrative processes for money transfer and enforcement, than on supporting families to work together to fix their relationship problems, which the evidence indicates is a more successful approach. We have to change that.
As right hon. and hon. Members have said, more than half the parents who use the current system say that they would like to make their own arrangements if they had the right support to do so. That is not to say—
Sitting suspended for Divisions in the House.
What I have said so far is the basis for the reform that this Government are putting in place. I pay tribute to the 8,000 staff at the Child Support Agency and all that they do, with the difficult system they work with, but I share the view hon. Members have expressed today that the current system is not working well enough for the people who need it the most. We inherited two sets of rules, three IT systems and more than 20,000 complaints every year, and reform that has failed to date. It is time to change the role of the child maintenance system and set it in context of the Government’s broader family and social justice policy, which is founded on the evidence that children have a better life with their parents providing support and protection throughout their childhood.
My hon. Friend the Member for South East Cornwall (Sheryll Murray) was right to say that parents need support from each other. Indeed, we have recently set up a customer panel to do just that and we are considering how to develop it further.
The hon. Member for Edinburgh East was right to say that we have to take into account the views of those who work in the field. They are indeed vital, but I caution her against focusing simply on the views of the legal profession, because as MPs who deal with such issues day in, day out, we all know that many people have more grass-roots experience, and we need to draw on that. Indeed, we as a Government have drawn on such voluntary and community sector experience in making our plans for the future scheme. A group of experts in the sector have worked with us to set out how we can ensure that parents have the right information and support, particularly early on, to work together post-separation and to make sure that both parents remain actively involved in their children’s lives. We have already announced £20 million to make that happen—that is in the current spending review. That £20 million, previously spent on IT systems and the rest, will now be used to support charitable organisations, which we all know do so much effective work with families. That funding adds to some £45 million that the Government are already spending in 2012-13 alone on supporting families and relationships.
The money will provide the sort of tangible help that makes a real difference to families’ lives when separation is involved, and it will do so in a way that supports children. It will cover the provision of an online distributable web application; training for voluntary and community organisations to provide telephone support and improved face-to-face support; and up to £14 million for the recently launched innovation fund, which will help innovative ideas to get off the ground and measure their success in supporting parents during family separation.
I reassure my hon. Friend the Member for Gosport (Caroline Dinenage) that we know that not everybody will be able to work together. She is absolutely right about that. The hard work that she does in her constituency proves that not everybody can come to their own arrangements. That is why we will also introduce a new statutory child maintenance service for parents.
My hon. Friend the Member for South Swindon (Mr Buckland) has immeasurable experience, and on a number of occasions I have had the benefit of his wisdom regarding reform in this part of my ministerial portfolio. He is right that tough enforcement action is needed. The Child Maintenance and Other Payments Act 2008 contains tough enforcement powers and we are committed to ensuring the implementation of the new statutory scheme, which will be introduced this year, along with powers to manage arrears of maintenance payments that have been accumulated under the existing scheme and are not collectible. We want to make sure, first and foremost, that we have the right statutory scheme before we take on those forcible powers that my hon. Friend thinks—and I agree—could work so well.
I will try to deal with the main issues raised in the debate. One that troubles many Members is that of non-resident parents whose lifestyles are inconsistent with their declared earnings. That is often coupled with being self-employed and other ways of playing the system that hon. Members have said some parents may be exploiting. The problem is not new and we think that our reforms will start to address it. We will use information from Her Majesty’s Revenue and Customs about taxable income alongside other data to calculate the amount of maintenance that a non-resident parent is required to pay, and that information will be updated every year.
That is an important innovation, because we will no longer have to rely on declared income and will move instead to a system that relies on data provided to HMRC. Of course, some individuals may not declare all their income to HMRC, but that is a different matter. We are working closely with HMRC to do as much as we can to ensure that such income estimates are accurate and kept up to date, which, under the current system, they are not. The right hon. Member for Stirling is probably aware of all those issues from her time in government, and I hope she agrees that this is an important step forward.
Given that we are dealing with people who put in a self-employed schedule D return, as opposed to the pay-as-you-earn, can the Minister give us any indication about where she will be taking the declared income figure from? Will it be from declared income, or will it be from income after all the other legitimate deductions come off—car use, boots for work and so on; all of the things that can be taken down—so that the taxable income at the end is far lower than what the person actually draws in?
The right hon. Lady will know that we are looking at those sorts of details right now. I take from her comments that she wants to ensure that we are dealing with an income that is representative of the income that an individual has, rather than an income that may be depressed for the purposes of the calculation that is being made. I assure her that those are exactly the sorts of conversations that we are having.
The change to using HMRC data will also give us a much more efficient system, getting money to children quicker and more effectively tracking down parents who fail to pay. On that note, my hon. Friend the Member for South Swindon raised an important issue regarding armed forces personnel. We are reviewing how to provide a service to assist service personnel in this respect. I hope he finds that reassuring.
My hon. Friend the Member for South Derbyshire (Heather Wheeler) raised an important issue relating to the 12-month rule. Since I became a Minister, I have looked at that in some detail. We are looking for the evidence needed to quantify the scale of the problem and to ensure that we understand it fully, but I understand her point. I have received other representations on the matter and officials are working with the legal community and with the Ministry of Justice to consider how we can resolve the problem. It cannot be right to have a system in which people can play the rules to their advantage. We must have a system that works equitably across the piece. I undertake to write to my hon. Friend in more detail about the actions we are taking and to keep her fully informed of how we move forward.
My hon. Friend the Member for Romsey and Southampton North (Caroline Nokes) and various Scottish Members brought up the minute of agreement, which I have looked at in some detail. We do not feel that we can take that forward as part of the child maintenance system for which the Department for Work and Pensions has responsibility, but I know that my colleagues are well aware of it. If time were to permit—it does not today—I could talk a lot about the important innovations being made in the Ministry of Justice on mediation, which may well deal with some of the issues that the minute of agreement deals with.
In the few minutes that I have available, I wanted to address some of the other detailed points raised by my hon. Friend the Member for Loughborough, who is an assiduous constituency MP—