To ask Her Majesty’s Government what action they are taking to expedite the collection of over £3 billion in unpaid child maintenance which was ordered by the former Child Support Agency.
My Lords, the main focus of the Department for Work and Pensions is to collect money owed that will benefit children today. It is well established that much of this old debt is uncollectable due to its age and the circumstances of these cases. The department is currently developing a new strategy for handling historic arrears accrued on Child Support Agency schemes. We will consult on the proposed approach before publishing the new strategy.
My Lords, I simply do not think that is acceptable because, according to a withering NAO report, around £3 billion in child maintenance is likely to be uncollectable. The Government say that they are offering parents a fresh start by suggesting that they write off debts to which their children are legally entitled. These are some of the poorest children in society, suffering as a result of incompetence and cuts in enforcement work, so why do not the Government restore staffing levels, step up enforcement and ensure that the new Child Maintenance Service is obliged to collect outstanding debts?
My Lords, I would be more than happy to accept the noble Baroness’s assessment that this is withering and the figures are astronomical if we were talking about figures that related to the children who are likely to benefit today. A lot of this £3.9 billion—sorry, £3.8 billion; there are different figures according to different things—goes back a very long way to the 1993 scheme. Some of it goes back before the reforms introduced in 2003 by the Government of whom the noble Baroness was a member, and some of it goes back before 2008. If the noble Baroness thinks about the number of years that have passed, she will realise that those children are now grown up and will not benefit from recovering that money. It is very sad that absent parents have behaved badly. The only people who have lost out—as the noble Baroness put it—are those children. However, we are concerned about the children of today and to make sure that matters operate properly now, and that the money owed by absent parents, where the department has a role in trying to enforce that, gets paid to the caring parent so that the appropriate children benefit. I am terribly sorry but a lot of that £3.9 billion is in effect lost, as the noble Baroness said, to those children who are no longer children now.
My Lords, financial arrears are often symptomatic of an adversarial approach to collecting child maintenance. How is the new child maintenance system encouraging parents to set up family-based arrangements, and what success is it having?
My Lords, I thank my noble friend for that question. I am not going to go into what we are doing about arrears. However, I shall talk about the 2012 scheme of child maintenance. By bringing in more simplified methods of calculation, we are helping parents to sort these matters out. We are also encouraging parents to sort these things out themselves without necessarily using the department. We are now at a stage where in nine out of 10 cases parents are paying towards the child maintenance that they owe, and paying the appropriate amount. Therefore, we are making progress but there are still some who are not doing what they can.
But is the Minister aware of the concern that the government arrangements to manage the outstanding £3 billion-worth of arrears are not yet clear? Arrears are still sitting in the CSA legacy schemes. They need to be sorted out because the biggest risk to the 2012 scheme is a botched job in closing the legacy CSA schemes.
My Lords, as I said, this goes back a long way. It covers Conservative Governments, Labour Governments and the coalition Government. We have all tried to sort this out. I am afraid that a lot of this money is lost for ever. We are looking at a new arrears scheme and will consult on that to try to get what we can, but I am sure the House would agree that the first priority should be to get money that can still benefit the children of today rather than trying to get the money that was owed yesterday, or the money that is owed to the department. The bulk of the money is very historic.
My Lords, I am happy to take the Minister at his word. Let us look at today, but in doing so I declare an historic interest as a member of the board of CMEC before I came into the House. The Government are closing the CSA and if you have an active case on the CSA, instead of transferring it to the new system, it is shut down and you are invited to apply to the new system. The Government estimated that two-thirds of parents would apply to the new system. The NAO has found that only one in five is doing so. The Government have said that most of the rest would make private, family-based arrangements. More than half of families have no arrangement at all in place. This matters because it is not just important for tackling child poverty: a decent child support system sends out a message to the world at large that you might divorce your spouse or separate from your partner but you do not stop being responsible for your kids. Will the Government sort this out?
My Lords, I agree with the noble Baroness’s last sentence: the important thing is that the children of today benefit. That is why I cited the figures earlier. We are now at a stage where in nearly nine out of 10 cases parents pay towards the child maintenance they owe. When we are dealing with historic debt, I am sure the noble Baroness will agree that the right thing to do is to pursue that debt that is likely to benefit the children of today rather than those of before. I think that we were also right to seek reforms to the Child Support Agency, which the noble Baroness’s party tried to do in 2003 and 2008. That is why we brought in CMS. CMS allows us to provide assistance to parents on some occasions, but on many occasions it allows many others to manage these things for themselves without the interference of the Government. The noble Baroness thinks I have not answered sufficiently, but this is why I started off with the fact that most people are making payments.