[Sir Edward Leigh in the Chair]
I beg to move,
That this House has considered the effectiveness of the Child Maintenance Service.
It is a pleasure to serve under your chairmanship, Sir Edward. I thank everyone for attending, and the House of Commons Library and the digital engagement team for their contributions to the debate.
Members are likely all aware that the Child Maintenance Service, which administers the 2012 child maintenance scheme, is frequently raised by various means in this place. This year alone, up until the end of last week, 28 cross-party MPs, including me, have asked a total of 109 parliamentary questions directly related to child maintenance. On the Floor of the House, three MPs have suggested holding a debate. All those instances correlate to the processes and the performance of the Child Maintenance Service, which is failing many constituents across the British Isles—both paying and receiving parents.
No problem—I appreciate that.
The last request for a debate on improving the Child Maintenance Service was made by my hon. Friend the Member for Lanark and Hamilton East (Angela Crawley), who secured an Adjournment debate on the Child Maintenance Service some 20 months ago, to highlight concerns about the inadequacies of the service that she had become aware of through her constituency work. Those concerns include the struggles and inconsistencies faced by constituents dealing with the Child Maintenance Service, as well as sensitive safety issues faced by domestic abuse survivors.
I commend my hon. Friend’s efforts to remove the 4% charge that parents with care who have survived domestic abuse have to pay when they are left with no option but to use the collect and pay service. Besides effectively meaning that 4% of children’s maintenance entitlement goes to the Treasury, it is also a means for an abusive paying parent to perpetuate their control over the receiving parent, thereby continuing the cycle of abuse. As my hon. Friend highlighted in November 2017, it is commonly known that one of the biggest impediments to domestic abuse survivors achieving independence from the abusive relationship relates to financial control.
All those months ago, the Minister responding to my hon. Friend’s debate, the Under-Secretary of State for Work and Pensions, the hon. Member for Hexham (Guy Opperman), advised that the Government aimed
“to take immediate action to re-establish compliance wherever a parent fails to pay what they owe”
and that one of their priorities was ensuring that action was taken
“to maintain compliance in the statutory scheme, so that…children can benefit from maintenance payments.”—[Official Report, 16 November 2017; Vol. 631, c. 701-704.]
It will shortly become evident that that prioritisation is not happening, certainly in the cases that I will raise.
Another way the Child Maintenance Service has been raised is through a private Member’s Bill sponsored by my hon. Friend the Member for Motherwell and Wishaw (Marion Fellows). The Child Maintenance Bill aims to remove certain fees charged by the Child Maintenance Service, and to make provisions for child maintenance payment calculations. The Bill was read the First time on 6 November last year, but still awaits its Second Reading. Perhaps the time has come for it to make some progress.
Furthermore, just last month the Child Support (Miscellaneous Amendments) Regulations 2019, which amend child maintenance legislation to enable the delivery of the child maintenance compliance and arrears strategy, were approved in the House. The then Minister, who is also present today, announced that the Child Maintenance Service was working well, and pointed to the
“tough new sanctions for those who evade their responsibilities”.—[Official Report, 11 June 2019; Vol. 661, c. 583.]
However, I called for today’s debate because, as its regular appearances in parliamentary matters, which I have just highlighted, clearly show, the Child Maintenance Service might be working well for some but is certainly not working well for all. The debate requests that relate in particular to the processes and performance of the Child Maintenance Service show that many constituents across the British Isles, both paying and receiving parents, are being let down by the current system.
I warmly welcome the introduction of tough new sanctions for those who evade their parental responsibilities, but if the enforcement actions are not applied they are a blunt tool that does nothing to encourage paying parents to meet their obligations. We must not see a repeat of the National Audit Office report of March 2017, which noted that, compared with 2012-13, in 2015-16 there had been, with regard to the use of some types of collection and enforcement action in respect of arrears due for the 1993 and 2003 schemes, a 69% decrease in the use of deductions from earnings orders; a 73% decrease in bailiff referrals; a 77% decrease in liability orders, which allow enforcement powers to be used; and a 98% decrease in prosecutions.
Today’s debate will consider the difficulties faced by so many of our constituents and the reasons why the Child Maintenance Service is failing them. In doing so, our discussions will hopefully also consider what can be done to remedy those failings, so that all children can benefit from receiving maintenance payments that are consistent and compatible with the paying parent’s income level.
In my constituency alone, I have been contacted by 55 people who have essentially reached crisis point due to the treatment that they have received because of the Child Maintenance Service procedures. Those 55 cases represent the tip of the iceberg in my opinion. It has an impact across extended families as well. A father of one parent with care felt compelled to speak to me independently to describe the financial and emotional devastation that his daughter and grandchildren were experiencing because the paying parent was doing everything in his power to dodge his responsibilities.
I will momentarily discuss that case in more detail, and others in my constituency, but there must be a fundamental deficit in any system that allows that to happen. We must do all that we can to address that deficiency. The numbers that I am seeing suggest hundreds of detrimentally affected family members in my constituency alone, and tens of thousands across the UK. Clearly, the ineffectiveness of the Child Maintenance Service has a negative impact on a significant number of people.
That is certainly supported by the nearly 1,000 people who responded to the House of Commons Facebook post and the Mumsnet thread that invited comments ahead of the debate. I thank each and every person who made the effort to share their experiences on those forums —many of them were quite traumatic tales. Unfortunately, time limitations restrict me from disseminating individual accounts, although I will highlight the stories of my constituents, which mirror many of the issues raised on those forums. However, I can state that almost none of the paying and receiving parents who responded had had a positive experience in dealing with the Child Maintenance Service. Recurring themes included problems arising from payments being calculated on gross income and on incorrect and out-of-date information, and how calculations result in poverty and debt, which lead to mental health impairment and even suicidal tendencies. Additionally, users experience inconsistent information and standards of service.
My constituent Susie first approached me nearly four years ago, in September 2015, after the father of her children moved to self-employed status and dramatically decreased the maintenance he paid for his children’s upkeep. Indeed, during the non-resident parent’s change of employment status he paid nothing towards his children’s upkeep for almost a year. Susie suspected that he was not being truthful about his declared earnings, as they did not equate with the lifestyle he enjoyed. She approached the Child Maintenance Service to investigate but was duly advised to contact Her Majesty’s Revenue and Customs, which in turn told her to contact a private investigator—an unlikely financial priority when someone is struggling to provide for their children. HMRC procedures are arguably another matter for debate in this place, but that will have to wait for another day.
Before the 2012 child maintenance scheme was introduced, the resident parent could apply for a variation if a non-resident parent had either a lifestyle inconsistent with their income or assets of more than £65,000. In May 2017, the Work and Pensions Committee called for those provisions for parents to challenge child maintenance awards on the grounds of assets and lifestyle inconsistent with income to be reinstated—a call that I reiterate and support—and two private Members’ Bills have been introduced since April 2017 that have, thus far unsuccessfully, sought to implement such a change. However, although the Government’s position is that they have
“no plans to reintroduce this provision”,
they have, since December 2018, introduced a new notional income criterion that they say would
“be useful in a range of scenarios including where we believe paying parents have made an effort to use complex financial arrangements to evade their responsibility.”
At least one step has therefore been made in tackling that type of liability dodging, but it needs decisive action to back it up, not the decrease in action that I have witnessed.
I am grateful to my hon. Friend for setting out the issues so clearly. I have a constituency case at the moment in which the absent father’s business is clearly doing very well—we just have to look at his Facebook page to see how much business is coming his way—yet his employer and the director of his business, who happens to be his mum, claims that the business has no income at all. That is not an uncommon situation. Does my hon. Friend agree that more has to be done to punish those who would try to get round the current system to get out of paying for their own children?
I agree with everything my hon. Friend says. That type of scenario is one of the recurring themes that I have seen repeatedly in the 55 cases that my office is dealing with.
After five months and numerous interventions, it was eventually accepted by the Department for Work and Pensions’ financial investigations unit that the paying parent did have additional unreported income, yet my constituent’s hardships continued when she was asked to complete a variation form that would start an investigation, as there had been no record of contact before 12 February 2016. My office forwarded a complaint that was finally responded to 10 months later, in December 2016.
Six months after that, Susie found herself in a similar situation and had to make another formal complaint to the Child Maintenance Service because of its inefficiency, which resulted in a second conciliatory payment being made to her. Then, in October 2017, she won an appeal that the paying parent had raised, and wrote to the Child Maintenance Service with some queries about the award. However, despite numerous calls and letters, she received no response until January 2018, after seeking my intervention again.
I could continue to relay the consistent and ceaseless catalogue of errors that constitutes Susie’s case; suffice it to say that, currently, the paying parent has raised yet another appeal, while Susie is still waiting to receive the award from the first tribunal and has had to make another formal complaint, due to the Child Maintenance Service again ignoring her correspondence and thereby not complying with its own guidelines. Four years down the line, and around 90 recorded interventions on my constituent’s case later, there is no conclusive resolution to her difficulties.
Despite the availability of a spectrum of collection actions and enforcement powers to collect arrears, they are seldom used. Indeed, the single parent charity Gingerbread has contended that there can be
“a lot of prevarication and foot dragging”
before the CMS uses its powers to collect arrears; the Work and Pensions Committee said in May 2017 that the data published by the Child Maintenance Service
“reinforced the impression provided by stakeholders that the CMS is reluctant to use its enforcement powers.”
Sadly, Susie’s is not an isolated case. Another constituent, Anne-Marie, contacted me last August after enduring three years with no financial support from her child’s father. In this case, the paying parent had been so unco-operative with the Child Maintenance Service that he had been put on to a deductions from earnings order, where his employer was obliged to make maintenance payments directly from his wages to the Child Maintenance Service. However, to avoid the 20% charge that that method of payment incurred, the paying parent requested to go on to the direct pay system, cutting out both his employer and the Child Maintenance Service, and leaving the receiving parent dependent on his sense of fairness. Without my constituent’s permission, his request was granted.
Anne-Marie eventually received an apology from the Child Maintenance Service for doing that, but the admission of regret did not prevent her difficulties from escalating. The Child Maintenance Service did not tell the paying parent’s employer that it had changed the payment method, resulting in another payment being sent to it that it refused to pass on to the receiving parent. By August, when Anne-Marie contacted me, she had not received any child maintenance for nearly six months and that continued, despite the deductions from earnings order being reinstated, for another four months. By the time she finally received a payment, nearly 10 months had passed.
The reinstated payments were short-lived and they lapsed again after a payment on 25 January 2019. Instead of the service complying with the evidence given by the DWP to the Work and Pensions Committee in 2016 and 2017 that
“all cases move across to enforcement immediately after the first missed payment was missed”,
Anne-Marie had to contact the service herself on 4 March. She discovered that, once again, no action had been taken. On 11 March, she wrote to me again, explaining the reality of her frustrations. I quote from her correspondence:
“I am finding it difficult to get in constant contact with them as I am on hold for at least 20 minutes before I even get through to someone then I need to explain the whole case to a stranger which then takes at least 30/45 mins. I cannot always do this during my work time and after work they are reduced to skeleton staff at CMS and are unable to help. I am at my wits’ end and do not know how I can progress with this.”
This was a common sentiment in many of the cases.
One of my staff members contacted the Child Maintenance Service on 26 April to try to understand the failings in this case. When she asked why immediate action was not being taken when the deductions from earnings order was not being complied with, she was told that although the CMS is alerted as soon as a payment is missed, it does not have the resources—the staff—to deal with it immediately, as the staff work chronologically. When she further enquired why no enforcement action had been taken against the employer, despite it not complying three times, she was told that any court action raised is stopped if there is subsequently compliance, which means the whole cycle has to start again if the employer makes another payment and then it stops again. It is a constant stop/start process. My staff member was ultimately advised that the procedures for enforcing the payment of arrears in child maintenance were not being adhered to because the operational powers laid out in legislation fall short in practice.
Speaking to Anne-Marie again on 10 July revealed that, after all this time and despite my involvement, things have still not improved for her. That is hardly surprising. During the Adjournment debate secured by my hon. Friend the Member for Lanark and Hamilton East, the Minister said:
“We are continuing to increase the operational resources allocated to enforcement, with 290 full-time enforcement case managers in place as of September 2017.”—[Official Report, 16 November 2017; Vol. 631, c. 701.]
In answer to a written parliamentary question, I was advised last week that the overall head count of part-time and full-time enforcement case managers on 30 June 2019 equated to an overall full-time equivalent resource of 220.91, with 104 being employed full time. Clearly, operational resources have not been increased; they have actually decreased. It is therefore also unsurprising that Department for Work and Pensions figures show that arrears owed in respect of child maintenance rose by more than £7 million in just three months, between December 2018 and March 2019.
It is not only the receiving parents who are being failed by the Child Maintenance Service. One of my constituents, Craig, had a shortfall of direct payments due to work circumstances. The shortfall amounted to about £90, which he paid after the Child Maintenance Service contacted him. He contacted me in February, because even though he provided proof of payment to the CMS several times, it continued to arrest his wages without any warning. Three weeks later, the Child Maintenance Service found the evidence that Craig had in fact paid the outstanding amount that he had been contacted about. However, he was not refunded the 20% charge that had been incurred, or even offered an apology.
It has been well documented that the 2012 child maintenance scheme was designed to encourage parents to work together following separation and, where possible, make private, family-based arrangements for the child. That premise was reiterated in the Commons Chamber when the statutory instrument to the child support regulations was commended to the House last month. Yet, although both Craig and the receiving parent in this case agreed that direct pay would work best for them, that option was not facilitated by the Child Maintenance Service.
On 6 March, a payment breakdown was requested to clarify what payments were to be paid and when they were to be expected and, up until yesterday, that had still not been received. Craig’s experience has been that he was not listened to and was, in fact, harassed; it made him feel that the system was biased against the paying parent. That feeling has been echoed in correspondence that I have received over the last four days from people in other constituencies all over the British Isles—one of whom actually said that the Child Maintenance Service
“encourages parental alienation and assists financial abuse and coercive control.”
I find it deeply regrettable that the situations I have highlighted here today, and those I have very recently become aware of but have been unable to highlight due to time constraints, indicate that the Child Maintenance Service is not fulfilling its charter commitments to keep the interests of children at the heart of everything it does, by being responsive, reliable and respectful of the best ways to manage individual cases.
In each of the three constituency cases that I have highlighted, and in others beyond, the lack of communication between the Child Maintenance Service and the paying and receiving parents has been a significant factor. That could be so easily remedied, yet would be an important amelioration for the service users. I hope the Minister will take that on board.
It is a pleasure to serve under your chairmanship, Sir Edward. For the past four to five years, I have been the chair of the all-party parliamentary group on alternative dispute resolution. I am also an associate of the Chartered Institute of Arbitrators, with a professional interest in mediation. I pay special tribute to all those who carry out mediation in the difficult circumstances of a family break-up. It is far better for parents to come to their own arrangements than have a one-size-fits-all approach imposed on them. I have seen that in my professional and personal experience.
The Child Maintenance Service sets out a process for reaching an amicable agreement. It is not a naive, buddy-buddy approach for trying to get people to work together. It recognises that there are fundamental differences and difficulties that have arisen as a result of the break-up of a marriage. It encourages civility in the way people address each other and take forward their discussions, which leaves the CMS to deal with the really difficult cases—the ones in which there is a tremendous amount of acrimony. Indeed, I would suggest that most cases we face, and the cases that the hon. Member for Linlithgow and East Falkirk (Martyn Day) has described, fall into the category of difficult cases that do not lend themselves to amicable agreement.
Despite the times we live in, we recognise that it is usually the mother who has custody of the children, but that is not always the case. Fathers can face crisis because their circumstances have changed. However, each case is unique and takes time to work out. To go back to what I said earlier, they cannot face a one-size-fits-all approach. All such cases are emotionally charged—they have to be, given the circumstances in which they occur. When they are emotionally charged, there is enormous potential for complaints. I have come across many mistakes made by the CMS that have left people with very little disposable income.
Under the previous Secretary of State or the one before her, I put forward a complete list of things in the benefits system and CMS—not to complain about them, but to help her focus on how to improve them. It is a great shame that nothing has come of them. If I forward to the Minister the list of things that I had already forwarded to the Secretary of State, will he take them up to ensure that we can deal with these problems as we go along?
Does the hon. Gentleman agree that on many occasions—certainly in my constituency case load—the cases are primarily about a change in circumstances that has been notified to the Child Maintenance Service, but for some reason the notification has not been acknowledged and acted on? It is only months later, after a lot of trauma and difficulty, that it is rectified. It could all too easily have been resolved if it had been investigated at the time when the information was forwarded.
The hon. Gentleman makes a perfectly legitimate case for the sort of example that he gives. I agree that speed is of the essence in dealing with these things, but the CMS has simply brushed over some cases. The system has not been fully explained to either party so that they understand exactly what will happen, what their rights are, and how they can deal with the case. In my experience, it is also true that many of the individuals involved in these difficult cases have not had explained to them in detail what information is required of them. There is a tremendous amount of going back to the beginning and helping people through this process.
The CMS has plenty of powers to ensure that people do not disguise their true income, and that we fully take into account unearned income—for example, income from property and land. The CMS has the power to remove passports, to cope with the situation in which an errant former spouse might have gone off to sun himself on the beaches of Monte Carlo and is not paying his child maintenance.
This whole situation is quite new, and we need to wait a little time to allow it to work itself out, so that we can see whether the CMS can be made to work better. However, it is showing itself to be slow and, as the hon. Gentleman described, failing to take action when cases have been brought before it. That means one thing: it is not the other parent, but the child, who loses out. That should be at the centre of all our thoughts and all that we are trying to do with the CMS.
It is a pleasure to see you in the Chair, Sir Edward. I congratulate the hon. Member for Linlithgow and East Falkirk (Martyn Day) on securing this important debate, and on his comprehensive introduction to the subject. Like him and other hon. Members, I receive many complaints about the Child Maintenance Service. It is one of the constant themes in constituency surgeries—so much so that I recently took the opportunity in business questions to call for a debate on whether the service is meeting expectations. In my view, it often falls short. Following that request, the Minister’s predecessor invited me to come and meet him—to his credit, he took an active interest in the issues I raised, and I was impressed by his commitment to refine and update the system. It is true that there is a very difficult balance to be struck, and there are always examples of where the system is not working, so I welcome the opportunity to raise certain issues.
My constituents feel that the system is not doing as well as it could do. It is no exaggeration to say that the issues I will raise are matters that my caseworker and I were progressing through only last Friday. It seems to be a common theme that issues arise very frequently. It is not good enough, for a service that is supposed to support vulnerable people at their time of need. In an ideal world we would not need such a service because parents could reach an agreement between themselves, with no third-party involvement, and stick to those arrangements. However, we do not live in an ideal world, and it is quite often necessary for the Child Maintenance Service to get involved. It hopefully ensures, at least in theory, that the parents contribute to the cost of bringing up their children after a relationship has broken down.
Meeting the needs of children should be the most important thing. The reality is that child maintenance is a vital source of income for many families, especially those on low incomes. Gingerbread reports that child maintenance lifts a fifth of low-income, single-parent families out of poverty, so we cannot underestimate the impact that a good system has on improving children’s lives.
It is deeply concerning that we have several cases of non-payment at the moment. Of course, constituents do not come and see us to say that the payments are all going through smoothly. I am sure that hon. Members have very similar experiences—I am particularly talking about cases in which the paying parent has been on the collect and pay service, but after six months of compliance they request a move to direct pay, to avoid the fees that the collect and pay service incurs. Unfortunately, we often find that payments are not received once the paying parent has moved back to direct pay, leaving the receiving parent having to chase the matter through the Child Maintenance Service until it refers the case back again to collect and pay. That whole process can often result in several months of no maintenance payments being received; obviously, that can leave parents financially vulnerable. That is not just the case for my constituents; Gingerbread said in its survey that receiving parents are often forced into lengthy, time-consuming efforts to recover late payments.
Much more consideration should be given to the history of payments before it is agreed that someone can leave the collect and pay service. A history of many years of non-payment or late payments should not be disregarded just because of six months of compliance where compulsion is involved. Non-payment leads to arrears, which in the worst case can run to thousands of pounds and can add additional difficulties in getting regular payments made on time.
Although the Government have introduced measures to improve enforcement and collection of arrears, I am concerned that the level of arrears is creeping up. The lack of effective enforcement could be a cause, which would not surprise me since some of my constituents feel that the Child Maintenance System is often more concerned about meeting the priorities of the paying parent than the receiving parent. It seems to take the view that some payment is better than no payment at all, and it does not want to push the paying parent too hard for fear of losing everything. I understand that anxiety, but it can be interpreted as a desire to limit the number of cases administered through the collect and pay service. That view is bolstered by the Department’s evidence to the Select Committee on Work and Pensions in 2017, in which it said that it knew that some parents were staying in an ineffective direct pay arrangement rather than moving to collect and pay.
The 25% threshold for changes in income that has to be reached before payments are recalculated is artificially high. If someone gets an annual cost-of-living pay rise each year, it could be a decade before a recalculation is needed.
My constituents are experiencing unreasonably delays with the complaints resolution team. In one case, we have been waiting two months for a response from the Child Maintenance Service. Despite regular chasing in another case, we have been waiting three months for a decision on reimbursement that was referred to the service by the Minister’s predecessor some time ago. Such long delays cause unnecessary emotional and financial stress, leaving the parent without the day-to-day support that they are trying to recover.
Finally, I would like to say a little about my caseworkers. We all benefit from the hard work of caseworkers, and I pay tribute to those who, day in, day out, work very hard for the people for Ellesmere Port and Neston. When they raise child maintenance issues, they usually use the MP correspondence unit in the first instance. However, there are occasions when the issue is more about the way the legislation works. In that case, it is appropriate for me to raise those matters with the Minister directly. However, my caseworkers find that even in those cases, they are sometimes referred to the director of the Child Maintenance Group rather than the Minister. That leads me to question whether the Minister sees the issues raised. I hope that the Minister, if he remains the Minister—he could be elevated to much-deserved higher office very shortly—will investigate those concerns.
I should make it clear that the Child Maintenance Service is operating far more effectively than the Child Support Agency did. I have an example of how poor the old system was. A constituent’s income had significantly increased but the CSA did not carry out any recalculation, so he assumed that he did not need to increase his maintenance payments. When his son reached 18 and his case was closed, it decided to recalculate and found that he owed £17,000. He clearly owed that money, but because the system did not work properly, he is now paying his ex-wife a considerable amount every month for the care of his son who is now an adult and living with him. That is an absurd situation, which I hope we will not see under the new regime.
With child benefit and child tax credits frozen since 2016, child poverty on the rise and nearly half of all children in lone-parent families in poverty, it is vital that we get this right. The Child Maintenance Service must deliver, and it must do so promptly, reasonably and fairly.
It is a pleasure, as always, to serve under your chairmanship, Sir Edward. I congratulate the hon. Member for Linlithgow and East Falkirk (Martyn Day) on securing this important and timely debate.
My constituents continue to bring me their concerns and issues with the Child Maintenance Service. I am grateful for the way that my exceptionally capable casework team at Borestone Crescent in Stirling, Rachel Nunn and Euan Blockley, deal with them. There are undoubtedly good people at the Child Maintenance Service—I pay tribute to them for their hard work and service—but I am concerned about what my constituents and my caseworkers tell me when they come to my office to get help.
People understandably already feel fraught and upset—they are in a situation that they never anticipated, and feel vulnerable and sometimes deeply hurt and angry. That means that communication on these sensitive matters must be clear and understandable. Too many vulnerable people caring for children feel that the system is less than transparent and too confusing. Sometimes, for good reason, they feel lost or trapped in a process they do not fully understand, and they are frustrated and upset.
The good people at the CMS often deal with very sensitive cases; I can only imagine how hard it is. That said, I know too many constituents who feel they have been treated unfairly—being left hanging on the phone for ages, as has been mentioned; not being able to speak to the relevant people despite repeated attempts to contact them directly; being accused of lying and cheating. I am not saying those cases are typical—the Minister knows that—but they are the examples that are brought to my attention by my constituents, who have contacted me because they feel they are being failed by the CMS in some respect. I want to give them a voice.
I mentioned clarity of communication. When my constituents come to see me and my caseworkers, they usually bring the correspondence they have received from the CMS. The feedback I get, and my own experience, is that those letters are hard to read and even harder to understand. Notices of changes to payments come with little or no explanation. That is upsetting to people who already feel very insecure. There is the matter of backdated payments, which was also touched on. Sometimes it is just not clear to my constituents how a calculation has been made. People feel confused about what they are reading, but there are no immediate answers because communication with the CMS is not easy.
There is too often a problem with conflicting advice. My constituents say that they are told one thing on one day by one person they speak to at the CMS, and something different the next day when they speak to someone else. That concerns me, as I know it will the Minister. Quite rightly, the CMS tries to get parents to sort things out between themselves—that is a good principle—but when that fails, the CMS needs to take prompt action to give support to families with children. It is often slow, for some unfathomable reason, to escalate its support and to use collect and pay.
I am sure the Minister has heard this many times before, probably from me: I understand the 20% collection fee on the paying parent, but I still do not understand why the receiving parent should have to pay 4% on an ongoing basis. I can fully understand the principle of encouraging both parents to sort things out for themselves, but on an ongoing basis, where there is obfuscation on the part of the paying parent and where the receiving parent most often needs every penny they can get their hands on, why should they have to go on paying a fee on what is collected for their children?
I acknowledge the challenges of collection. There are challenges when the paying parent’s income is not evident or is disguised or hidden, or the person is self-employed, and through some invisible support they declare little or no net income year upon year, or they keep changing jobs and cannot be tracked down. But what difference have the measures announced a year ago made to the performance of the CMS in limiting child maintenance avoidance? What has been the impact, for example, of beefing up the financial investigation unit at the DWP? Is the Minister, a man I greatly admire and respect, satisfied that the current set of enforcement powers is adequate? Is it now beyond question in the Minister’s mind—because the question arises in other people’s minds—that the CMS is fit for purpose? May I seek assurances in respect to the actual day-to-day delivery of the CMS client services? I want to be specific about this.
First, does the client system that the CMS uses flag outstanding action points? My constituents have to go through the whole story every time they phone up. Why does not the system alert the CMS managers when actions and feedback are due to go to clients? In my experience, in just about every setting, too much communication is a bad thing. Secondly, is there a standard for answering calls and speaking to clients? Constituents tell me that they wait a very long time to get a call answered and then are kept waiting before they can speak to the relevant contact. Cutting waiting times on the phone alone will reduce the levels of frustration that people who need the help of the CMS experience.
Finally, is there a searchable system of frequently asked questions that CMS managers and officers can use to answer routine questions, so that the advice is not only correct every time, but consistent? Consistency in advice to vulnerable people is an undoubted virtue, and greatly desirable. We have put in place a system because it is essential for the sake of the people whom we should keep in focus—the children in families that have split up. It is no fault of the child if their parents decide to end their relationship. We should therefore move heaven and earth to support the welfare of our children. In most cases people will stand up to their responsibility and provide for their children, but where they do not, we must take all steps to see that support is paid. We have a duty to get that right and to be as fair as possible. I look forward to hearing the Minister’s reply.
I thank the hon. Member for Linlithgow and East Falkirk (Martyn Day) for setting the scene so well, with lots of detail. The thrust of the issue is this: no matter what constituency we hail from, I can guarantee that questions have been raised over the effectiveness of the Child Maintenance Service. Each of us who has spoken so far, and the others who will speak after, will reinforce that.
On the news I have read numerous reports of single parents being left with thousands of pounds of debt because of the loopholes that the scheme is cluttered with. In my own office, not a month goes by without several Child Maintenance Service cases, and each one is unbelievably annoying and frustrating for my staff and me. They are even more frustrating for those trying to get the money that they are owed. There are issues with non-resident parents finding a loophole through being self-employed.
The biggest issue is with the self-employed. My hon. Friend the Member for East Londonderry (Mr Campbell) referred to how their circumstances change. I will give a couple of examples, without mentioning any names. When we understand the resources that somebody had three months ago and what they suddenly have today or maybe a year later, we wonder what happened. Did they lose it all on the horses? Where did it go? I am talking about people who own properties and cars and so on. There are many such cases because of the complicated financial arrangements required, which raises the issue of the effectiveness of the Child Maintenance Service alone. We know that the Minister is really interested in his subject matter and is committed to what he does. I appreciate that, but there needs to be change, especially for the self-employed.
My constituents tell me that another problem is that when they phone up the Child Maintenance Service, they get a different person every time and have to tell their story again. There must be a methodology. I understand that there is a high turnover of staff in the Child Maintenance Service, probably because of the complications of the job. Some people stay, but not enough. I suspect that that is because of their knowledge of the subject. Despite the legal requirement for the ex-partner to help cover the expenses of the single parent, the majority of whom—not all—are women, it has been reported that that is not the case. According to a National Audit Office report in 2017, the DWP acknowledged that 75% of alleged arrears were impossible to collect. Are they impossible to collect? Perhaps some might be. It is possible that people could be out of work or could be ill, but I suggest they are trying to avoid making their child maintenance payments.
Some figures show that the DWP does not track compliance for the monthly payment scheme for seven in 10 cases. With respect, I say to the Minister that tracking compliance seems elementary for the DWP and should be done without any nudging or requests from anyone in this debate today. Clearly, the Child Maintenance Service has far to go before we can extol the work being done. I am also mindful of the civil servants working in one of the most highly pressured situations. They do their best, but are tied by what it is becoming clear to me is ineffective legislation and regulation. Some of the staff members tell me that we need better legislation, better regulation and resources as well. If that is the case, let us see whether we can do that.
Figures from UK law firm Slater and Gordon have identified that 11% of mothers have been forced to depend on food banks to provide food for their children. This is factual. It is a fact in my constituency and is a fact for the mothers as well. We have food banks in my constituency of Strangford. I have seen the mothers come in. A self-employed person who has a fairly high standard of living has left the mother with the children, and with the mortgage as well, because they have walked off and left it. They probably had a joint credit card and the male partner has run up the debt. I must be careful with my language and remember we are in Westminster Hall in the House of Commons. They have cleared off—I was thinking of another word, but I cannot use it—and left the credit card debt for the mother to find. It makes me, and I suspect others, very angry. The aim of the scheme was to ensure that that did not happen, and it is very sad that some parents—I stress the word “some”—will not play their part in feeding their family after they have left the home.
Other husbands who have left their wives have made payments voluntarily, so some people do the right thing, but then we come to cases such as the one I had in the office a month ago. The guy had multiple properties and a six-figure sum in the bank, and all of a sudden, within less than nine months or thereabouts, it was all away. Where has it gone? Why are the wife and the children not being looked after when clearly there were resources there? Again, circumstances change. He moves house and it seems to be a game of cat and mouse to try to get him, but it goes on and on.
Department for Work and Pensions figures show that CMS arrears rose in the three months between December and March by £7.4 million. Clearly, the DWP is not getting the money that it should. If the figures rise, it tells me that more cases are coming in, but it also tells me that the DWP is not being effective. The problem is not getting better or being fixed, which is why I support this matter being discussed in this House today and the call for action to be taken. At the end of the day—the Members who spoke before mentioned this; this is the real issue for me—it is the children who miss out, caught in the middle of this mess. It is grossly unfair. They deserve better, and it is up to us as Members of Parliament, and I gently say to the Minister it is up to the DWP, to ensure that they are given better. Those poor children should not have their parents turning to food banks to feed them when there is a parent in work, who should be doing the right thing by them. The system needs to be either reformed or completely reworked.
I have given examples, and there are others, with people who drive around in flashy cars. I know how the system works, and it is possible; but I will say this: it takes diesel or petrol to fill the car up. If someone is living in a fancy house, whether rented or not, and is going out to dinner at least twice a week, that is an over-indulgent lifestyle if there is an ex-wife down the road with children who is not getting the money. Those are the things in the stories I am told, and sometimes I see such things from people I know, never mind anyone else. I am pleased that the majority of people make their commitment and pay their money. There is another example fresh in my mind, concerning a guy who had a very successful business. He and his wife had parted company; it was not her fault, by the way. He decided one day to close the business, and had no resources. Yet he left her with a debt and the children to feed. People sometimes engineer circumstances to ensure that they do not have to make any payment.
The figures I referred to are outrageous. It is pretty clear from them that the CMS is not as effective as it could be. That is no fault of the staff. According to what they tell me, there is a need for better legislation, regulation and resources. The hon. Member for Linlithgow and East Falkirk mentioned someone being told to hire a detective to do a private investigation and to come back with the details. I know that it takes time to get together the detail and information, especially if someone is deliberately trying to avoid paying for their children. I know how difficult it becomes, but I stress that it is the children who miss out.
If not for the sake of the single parents out there, act for the sake of the children. The least that they deserve is a system that ensures their parents get the money they are entitled to, to feed and water them, and look after them. The cases of missed payments and the lack of action from the CMS need to disappear. We need a better system and a better way of handling things, before the next batch of children reach their teens and look back to see that their mothers have slogged and sacrificed and never got a penny of help. It is not only figures in a bank account that we are discussing; it is the quality of lives of children in the UK. Change is needed to get things right and make people accountable for their children, as they should be. As to those who deliberately try to avoid paying, we must catch them and make them accountable.
It is a pleasure to serve under your chairmanship, Sir Edward. I congratulate the hon. Member for Linlithgow and East Falkirk (Martyn Day) on securing this important debate.
The question of the effectiveness of the CMS is one that my team and I frequently discuss in the office, after yet another case is brought forward. I suspect that all of us in the Chamber could have used up 90 minutes ourselves, talking about our experience. I am grateful that we have the opportunity to air some of the issues today. I want to focus on two cases that my office has been dealing with that sum up the issues that both paying and receiving parents often face.
One case that I have been working on for a long time, of which the Minister is aware, concerns a paying parent who has gone through much adversity throughout his life. Following the breakdown of the relationship, the receiving parent took the case to the CMS, which contacted HMRC and obtained the most recent income information from 2015. My constituent at that time had a well-paid job, so the maintenance calculation was substantial, but he had left that employment in the previous tax year and, combined with the breakdown of his relationship and the sudden death of his brother, who was killed in a hit and run, he struggled to cope mentally. Nevertheless, the maintenance calculation would obviously remain until he could prove that he no longer earned that income. He phoned up many times to start the process but could never follow it through because of a chaotic lifestyle and deteriorating mental health. He frequently went AWOL and would be uncontactable even by his family, who were having to help him with his rent and bills to try to get him back on his feet.
My constituent found the CMS unapproachable and difficult, and simply could not deal with the situation he was in. He did what many people do when they feel that they are at the bottom of a rut in their lives, and shut the whole situation out, not responding to or even opening letters. Despite a P60 the following tax year proving that he did not earn anywhere near the income on which the maintenance was based, the CMS refused to reconsider the decision. The paying parent was out of time to appeal, because he lacked the knowledge, capacity or support to do so, and is now thousands of pounds in arrears that are entirely incorrect, based on the CMS’s rules, and completely unpayable, owing to the dramatic decline in his income.
Of course, MPs frequently see receiving parents who have an incredibly difficult time getting the money they are owed. Recently, a receiving parent asked the CMS for a variation, as their ex-partner was earning about £100,000 per annum. As is common for someone on such an income, that paying parent had a rather good accountant and was able to disclose to the CMS an income of less than £400 per week—a completely bogus figure. The maintenance calculation was minuscule as a result. Other receiving parents have highlighted issues with their former partner diverting money into pension schemes and other arrangements, to reduce their income and hence their maintenance contributions.
While the CMS is there to ensure that paying parents pay their liabilities, it should have a responsibility to every person involved in the claim—the parent who is paying maintenance but in many cases is unable even to see their own child; the receiving parent who has lost a household income and is supporting a child, often on their own; and of course the child or children at the heart of the whole thing, whose family has broken down and who may now find themselves at the centre of an angry battle between their parents over maintenance. It is not right that some of our constituents are paying wrong amounts and incorrect arrears, and it is certainly not right that parents are not getting the money they are entitled to and are left struggling because of loopholes. The CMS has an incredibly difficult task, but while things have undoubtedly got better than they were under its predecessor organisation, it is not in my experience effective in handling particularly difficult or complex cases.
Relationship breakdowns are never easy on anyone, so it is essential to have a functional system, with an understanding that it is dealing with real people, who may be going through the most difficult times in their lives. Too often, dealing with the CMS can feel robotic and impersonal, with neither parent feeling properly listened to or supported. We can do better.
It is a pleasure to speak under your chairmanship again, Sir Edward. I sincerely congratulate my hon. Friend the Member for Linlithgow and East Falkirk (Martyn Day) on securing this important debate.
Children living in single-parent families are at almost twice the risk of poverty of children who live with both parents. Tory austerity cuts, coupled with the rise in living costs, mean that maintenance matters even more to protect children from poverty. Victims and survivors of domestic abuse should be protected by the UK Government, not punished financially for their inability to engage with their abusive ex-partner. We have heard from hon. Members about various issues to do with the CMS. Indeed, I suggest that almost all Members who have spoken today could have exchanged speeches and still felt that what they said was their own.
My knowledge of the CMS comes from speaking with and helping both non-resident parents and parents with care who are let down by the system; however, it is ultimately children who are being let down. I am sure that many Members taking part today who advocate more effective enforcement will no doubt have received messages from non-resident parents who think that MPs are not standing up for them. I should like to put the record straight right now: the CMS is failing all parents and there are indeed ways in which it could be reformed to be fairer to everyone.
There are many non-resident parents who meet their full responsibilities and more. Everyone involved in this debate, and those watching it, should bear in mind that the CMS is about ensuring the welfare of children. I have been campaigning for its reform for some time. Indeed, I introduced a private Member’s Bill, the Child Maintenance Bill, based on the many issues that were highlighted as I tried to help constituents. The CMS has been roundly criticised by all parties in this place, which should signal to the Minister that it is time for sweeping reforms and an urgent root-and-branch review. The Government have a clear responsibility not just to parents or Parliament, but to the children whose lives can be changed for the better.
A cultural problem with enforcement exists in the CMS, which allows parents to evade their responsibilities, and arrears to build. Between December last year and March this year, arrears under the CMS rose by £7.4 million, from £966 million to £973.4 million. During the same period, £58.5 million was owed under CMS’s collect and pay service, through which the CMS monitors and pursues collections, yet only £40.6 million was paid. Some 33% of parents referred to the collect and pay service have paid nothing, and the remaining 67% can be guaranteed only to have paid “some” maintenance.
The UK Government wrote off £2.5 billion of arrears that had built up under the former Child Support Agency—money that still rightly belongs to children. The new CMS is now going down the same path because arrears are building up. The UK Government must crack down on enforcing payments to ensure that children receive their rightful maintenance. When £973.4 million of arrears have built up and that number is increasing, it is obvious that the CMS requires a full and thorough review.
Recent powers to confiscate passports look good on paper, but passport confiscations are seen as a PR stunt designed to scare parents into payment rather than direct enforcement. The Department for Work and Pensions estimated that approximately—wait for it —20 passports would be confiscated each year. Those are token powers, as well as being costly and time consuming to pursue. Greater emphasis must be placed on collecting arrears, and I hope the Minister will commit to ensuring a cultural shift within the CMS.
In Australia, departure prohibition orders are in use for those evading maintenance payments. The UK currently uses DPOs for tax evaders and those who have been dubbed “NHS tourists”. Unlike confiscating a passport, which takes time and lasts only for two years, DPOs can prevent people with two passports from leaving until their arrears are paid. Strict criteria could be applied before triggering a DPO, and I ask the Minister to consider such a provision. In most cases it is difficult to legislate to improve maintenance collection. We need an institutional willingness, both within the CMS and from Ministers, to crack down on non-payment.
Many hon. Members have already mentioned customer service, and from my experience, parents often testify that the quality of service offered by the CMS is extremely poor. My staff and I have also experienced that. The CMS uses an extremely complex system full of caveats. More must be done to inform parents about how it works. Common themes that emerge from my casework include a lack of explanation, differing explanations, a lack of consistency between caseworkers and a lack of written communication. More must be done to lift the standard of service generally.
Parents should be encouraged to make their own maintenance arrangements, but where that is not possible, parents with care should not be subject to the 4% maintenance tax. It is not right that a child is deprived of essential support because of their parent’s persistent non-payment. The UK Government have rightly waived the £20 application fee for victims of domestic abuse or violence, and the maintenance tax must also be waived. That tax is incurred by a parent through no fault of their own and exists as another act of harm against a non-resident parent’s ex-partner and their children. Will Ministers commit to looking seriously at the fairness of the maintenance tax on families?
On one particular point—the income change threshold —the law is unfair to non-resident parents. I agree with the former Minister that there must be a balance between financial stability for both parents and the operational efficiency of the CMS, but the 25% threshold can disproportionately benefit wealthier parents and impact on poorer parents when incomes change. We should not return to the 5% threshold of the CSA; instead, we should set a more reasonable threshold of between 15% and 20%. Will the Minister consider that proposal?
Many non-resident parents keep to their maintenance calculations and make the payments required of them to support their children. We should focus on improving the situation of those who are being let down by their ex-partner, the CMS, and the UK Government. A parent with care might find it difficult to find work that is flexible enough to accommodate caring for their child, or to afford childcare without giving up something else. They could be hit by the two-child tax credit cap, and might struggle to access the personal independence payment or see their income decrease under universal credit. They might find that a family-based arrangement is not possible, but if they approach the CMS, they are charged £20 for it to provide a calculation.
A parent might move on to the direct pay scheme, but find that their ex-partner refuses to meet payments. They might frequently report that to the CMS, but have to explain their situation to a new call handler every time. It is months before any action is taken, during which time the parent is unsure about what is going on because written communication is minimal—we heard from the hon. Member for Stirling (Stephen Kerr) about how difficult it can be to understand a written communication from the CMS.
The CMS may eventually use a deduction from earnings order, but perhaps the ex-partner earns much more and hides their income and fails to be properly assessed. Because the ability to request a variation for unearned income must be prompted and the parent with care might be unaware of that, maintenance calculations are frequently lower than they should be. Through no fault of their own, by having to rely on state help to force their ex-partner to pay for their child, the parent with care is charged a 4% maintenance tax when payments are eventually collected. That might be the worst-case scenario, but it is what many families experience.
We have heard from Members of all parties about the ways in which the CMS fails parents with care, non-resident parents and ultimately the children who rely on it. When discussing child maintenance, people often lose sight of why the CMS exists in the first place. We should all try our best to put party politics aside when discussing this issue—you will agree, Sir Edward, that we have achieved that today—but if there is continued inaction, then the party in government should rightly be held to account, especially if it is ignoring advice and views from its own members who have passionately advocated for reform through action.
As arrears under the CMS near £1 billion, the UK Government have been lucky that this issue has not received the public attention it deserves. People are right to criticise the Conservative party’s austerity agenda—universal credit, the two-child cap, the bedroom tax and all those other policies implemented by this Government. The growing debt owed to children in Scotland and the rest of the UK deserves to join that list. When the charity Gingerbread says that maintenance can lift one in five children out of poverty, the UK Government must sit up and listen.
Will the Minister conduct a full root-and-branch review of the Child Maintenance Service that must consider the 4% maintenance tax, lowering the income change threshold, the standard of service and an institutional shift to crack down on maintenance arrears, both current and historical? Children are at the centre of this debate and they should be at the centre of CMS and UK Government priorities. I hope the Government will listen to the concerns of Members and parents, and start to take radical action to secure the support that children truly deserve.
It is a pleasure to serve under your chairmanship, Sir Edward. I thank the hon. Member for Linlithgow and East Falkirk (Martyn Day) for securing such an important debate and for his continued work on this issue.
Before I address the substantive and specific issues about the Child Maintenance Service, I want to start by recognising the timing of the debate and the context in which we are having it. This week, many schools across my constituency break up for the summer holidays, and of course, in the constituencies of Scottish Members, many have already done so. Summer holidays should be a time for fun, activities, rest and relaxation, but for far too many children, their experience—and, tragically, their future memories—will be of hunger, hardship and sadness.
A recent report from the Trussell Trust showed that food banks experienced a 20% rise in demand for emergency food parcels for children last summer. More than 87,000 food parcels went to children in the UK during the summer holidays in 2018, which was an increase of one fifth on 2017. Shockingly, the Trussell Trust is concerned that the summer holidays will be even busier this year, as overall demand continues to rise across the UK.
Whatever the challenges or otherwise of the administration and technicalities of the Child Maintenance Service, it is important to recognise, as hon. Members have argued, that it does not operate in isolation from the wider pressures and challenges on children and families. When we discuss it, we do so with the objective of ensuring that those children, who are often the most vulnerable, can access the support that every one of them deserves, as rightly argued by the hon. Member for Stirling (Stephen Kerr).
Child maintenance payments can be vital for families, especially those on low incomes, to protect children from poverty. As my neighbour, my hon. Friend the Member for Ellesmere Port and Neston (Justin Madders), highlighted, research shows that they alone lift a fifth of low-income single-parent families out of poverty. We must remember that lone parents are particularly vulnerable to poverty. One in four is in persistent poverty, twice as many as in any other group, according to the Joseph Rowntree Foundation. The inadequacy of social security arguably makes child maintenance an even more vital source of income for struggling single parents.
We recognise the importance of ensuring that families and children receive what they are entitled to. However, as we have heard today, it is fair to say that there is limited evidence that the system is achieving that aim. A recent report from the charity Gingerbread has shown that there are major problems with the system of direct pay and, worse, that the Government are not doing anything to effectively address them. The Department for Work and Pensions does not track whether payments are made, which means that it cannot report on compliance in two thirds of cases.
According to Gingerbread, collect and pay charges are not sufficient to deter parents from not paying in full and on time, nor is there any evidence that it encourages collaboration between parents. Furthermore, it found that
“arrangements are prolonged by unclear thresholds for enforcement”,
with the Department experiencing a 69% decrease in the use of deduction from earnings orders,
“with inconsistent follow up from caseworkers and poor communication”,
as many hon. Members have highlighted. That is despite a previous ministerial pledge that the Department would act within 72 hours of a missed payment.
The Gingerbread report continued:
“The hands-off approach, compounded by poor administration, places the burden of responsibility for pushing for Direct Pay enforcement onto receiving parents”.
That will sound familiar to many hon. Members, who have constituents with similar stories from many other areas of the DWP’s responsibility. The fact that it feels so familiar suggests that the problem lies not with individual professional members of staff, but with the culture and leadership at the top of the Department. Indeed, some of the testimonials make it abundantly clear that the system is not working.
We must not forget that this is not simply a question of processes or systems; it is about children, relationships and emotions. A system that divorces itself from the realities, or ignores the consequences, is not fit for purpose. Parents interviewed by Gingerbread said:
“The balance of power is completely wrong. I have to basically keep him sweet so that he contributes”
“We had no other option…it’s just unbelievable that the child would have to pay 4 per cent out of their money when they’ve never done anything wrong.”
If the Government’s objective is to ensure that children do not become the victim, financial or otherwise, of relationship breakdown, it seems clear that that is not being met by the current approach. As we have heard, 33% of paying parents were non-compliant in the first quarter of 2019 and by the end of March 2019, cumulative arrears under the CMS were £275.3 million. That is £275.3 million that should be going to children. The cases that we have heard leave even more gaping holes in a system that should be supporting children.
We have several clear asks of the Minister. First, does he accept that the current system—not just the Child Maintenance Service, but many other aspects of social security, such as the five-week wait for universal credit, the benefits freeze and the two-child limit—is not fit for purpose and needs to change? Secondly, will he introduce tighter monitoring of direct pay compliance, so that we have a clear picture of its effectiveness? Thirdly, will he commit to introducing an improved and more transparent service so that we can ensure effective enforcement for late payments and offer hard-working staff the appropriate guidance, training and, importantly, as highlighted by hon. Members across the Chamber, resources? Fourthly, will he review the effectiveness of collect and pay charges for receiving parents?
There appears to be little evidence that the current arrangements encourage payment or communication between parents. The result is that many children end up paying a further penalty and some parents are forced to collaborate with a previous partner, which can create a toxic environment for the children.
I look forward to the Minister’s response. I very much hope that if we return to this subject in 12 months’ time, we will have an improved picture that fundamentally puts children centre stage.
It is a pleasure to serve under your chairmanship for the first time—and hopefully not the last, Sir Edward. I congratulate the hon. Member for Linlithgow and East Falkirk (Martyn Day) on securing this important debate on the Child Maintenance Service. I also thank hon. Members from both sides of the House for their contributions, which have been passionate, compelling and based largely on constituency cases. I know that, at the heart of it, everyone is driven by doing the right thing by the children involved.
I have met several hon. Members present to talk through some of the issues that their constituents have raised about the service. I have committed to making sure that we get things right first time. I also had the opportunity to hear directly from single parents during a recent visit to Gingerbread, where I heard at first hand about some of the important issues that they face.
Many points have been raised, so we have a lot to get through in a limited time. I stress that I hold regular surgery sessions, as many hon. Members present know, and I am happy to take offline any of the questions that I cannot cover in my response. I stress that I have been in post for just three months, and I would urge hon. Members across the Chamber not to underestimate my determination, while in this role, to improve the service.
I will start by setting out the Government’s approach. My Department is currently delivering a new child maintenance system, run by the Child Maintenance Service, which is designed to specifically address the shortcomings of the CSA.
My constituent understood that his case with the Child Support Agency was closed on agreement in 2003, and there had been no attempt to collect any moneys for the past 16 years. It is only as part of this closure programme that my constituent has been contacted and asked to pay £30,000. Does the Minister share my concern that there has been such a big gap and no attempt to collect the money? There is also conflicting guidance implying that some CSA arrears incurred before July 2006 can be statute-barred. Will the Minister clarify that and meet me to discuss the matter further?
My door is always open to colleagues from both sides of the House, and I would be happy to meet the hon. Lady to discuss that particular case in detail.
I mentioned the shortcomings of the CSA, which did not provide the right support to parents and was expensive to run. We have learned from mistakes of the past: where the previous system often drove a wedge between parents by taking away their responsibility and choice, the new system encourages collaboration at every stage. We know that a constructive, co-operative relationship between separated parents has a direct positive impact on child outcomes such as health, emotional wellbeing and academic attainment—a point made by my hon. Friend the Member for Henley (John Howell). That is why, wherever possible, we support separated mothers and fathers to work together in the interests of their children and set up their own family-based maintenance arrangements.
Private family-based arrangements allow families to create flexible arrangements that work for their individual circumstances. Such flexible arrangements can include sharing of care, agreements over who will pay for essentials and treats, and financial transfers. They can change as the children grow and can help children to experience having both their parents take an active role in their lives.
We recognise that, post separation, the majority of parents want to continue to do the right thing for their children. We want to ensure that as many families as possible have an effective arrangement for maintenance in place; for those who are unable to make a private arrangement, the Child Maintenance Service provides the support of a statutory scheme. The Child Maintenance Service delivers a simplified statutory system with increased levels of automation, which allows cases to be processed much more quickly and with higher levels of accuracy than was achieved under previous schemes.
The CMS provides an effective, efficient service, to be used as a last resort where parents are unwilling to meet their responsibility to financially support their children voluntarily. This means that cases in the statutory service tend to be more difficult and relationships between the parents in these cases are often fraught and conflicted. While we continue to use all the tools at our disposal to maintain compliance and recover arrears, it is sadly inevitable that some arrears will accrue, as some parents go to great lengths to avoid their responsibilities. That is not acceptable and we are taking action to tackle it. Last November, this House approved regulations tackling a number of issues—closing down loopholes, introducing tough new sanctions for those who evade their responsibilities, and dealing with the historic arrears that built up under the Child Support Agency.
The hon. Member for Linlithgow and East Falkirk and my hon. Friend the Member for Stirling (Stephen Kerr) raised questions about the CMS’s performance. The Child Maintenance Service is performing well. The most recent statistics show that 94% of new applications were cleared within 12 weeks and 79% of change of circumstances actions were cleared within 28 days. We are seeing unprecedentedly high levels of compliance, with 67% of parents due to pay child maintenance through the collect and pay service having paid some maintenance in the quarter ending March 2019, up from 60% one year earlier.
Although the case load on the service has been growing steadily since it opened in 2012, the number of complaints and appeals received still represents less than 1% of that case load. We have continued to refine our processes to maximise compliance and debt recovery. Debt as a proportion of all maintenance arranged by the service has fallen since the launch of the 2012 scheme, from 17% in March 2015 to 11% in March 2019.
A number of colleagues, in particular my hon. Friend the Member for Stirling and the hon. Member for Motherwell and Wishaw (Marion Fellows), rightly mentioned customer service. The focus so far has largely been on tackling arrears and on recovery of debt, but my clear steer to officials is that I want the focus to be on customer services. We know that more than 80% of calls are answered, although I still think the 20% that are not is too many, and I want them answered in a timely fashion. My focus, while I remain in this role, will be on customer service.
A number of hon. Members raised the issue of enforcement, and we are taking far more action in that regard. We now have several court-based powers, including the use of enforcement agents, otherwise known as bailiffs, to seize goods, forcing the sale of the paying parent’s property. Approximately 7,100 paying parents in England and Wales are currently being pursued by civil enforcement agents for unpaid maintenance following a referral by the CMS.
Hon. Members also mentioned that the service can apply to have the paying parent sanctioned—by being committed to prison or disqualified from driving, for example. In addition to that, in regulations in November last year we launched the ability to disqualify non-compliant parents from holding a UK passport, which we believe will act as a strong deterrent. The service initiated 900 sanctions in the quarter ending March 2019 as a last resort against non-compliant paying parents.
The hon. Member for Strangford (Jim Shannon) raised the question of complex earners. We are aware of a small number of parents whose maintenance liability is inconsistent with their financial resources. Some choose to support themselves via a complex arrangement of assets rather than taking a salary. We are taking action to address that.
Parents can request a variation so that most forms of taxable income can be taken into account in the maintenance calculation, which will make it harder for individuals to avoid their responsibilities by minimising the amount of child maintenance they pay. The new powers that we introduced last year allow us to target complex earners via a calculation of notional income based on assets. In addition to the gross annual income provided by Her Majesty’s Revenue and Customs, we can capture income derived from property, savings and investments, including dividends, and other miscellaneous income. We also have the Financial Investigation Unit, which can investigate those parents who declare suspicious earnings or, where appropriate, refer to HMRC for tax fraud.
The FIU was first introduced in 2014, and since 2017 we have tripled the number of staff in that unit. It will look at any case where the receiving parent raises a concern over income and provides basic evidence to support it. I should stress that around 60% of FIU cases show no evidence of suppression of income. Nevertheless, it is an important part of the service. The hon. Gentleman also referred to the self-employed, which I suppose is similar to the situation of complex earners. We have new powers, enabling us to do deep-dive exercises and get to the bottom of cases where individuals are trying to suppress or disguise income. Perhaps I will meet him separately to go through that in a little more detail.
My hon. Friend the Member for Henley raised a number of points about the accuracy of CMS assessments. The accuracy of maintenance assessments has significantly improved; our annual client fund account shows that it is at 99%. Furthermore, the National Audit Office has not qualified CMS accounts for the past two years, which represents a significant improvement.
The hon. Members for Ellesmere Port and Neston (Justin Madders) and for Motherwell and Wishaw brought up the 25% threshold. I understand the concerns that they have raised. The point of the 25% threshold is to ensure that maintenance calculations are relatively stable, so both clients know what to expect in terms of payments. It also ensures that both parents are able to budget with certainty and provide ongoing maintenance for the child. I have met with the hon. Member for Motherwell and Wishaw to discuss this, and it is important to stress that most people’s income does not change to that degree over the course of one year.
My hon. Friend the Member for East Renfrewshire (Paul Masterton) and the hon. Member for Ellesmere Port and Neston—
I am sorry, Sir Edward. I am conscious that I have not been able to cover many of the issues raised, but I hope hon. Members can see that the latest statistics show that the reformed Child Maintenance System is already making a big difference to the lives of separated families. We are seeing progressive improvements to the efficiency of the service. Our priority remains ensuring that this service is fit for purpose and, while I am in post, I will continue to ensure that it is.
I am grateful to all the hon. Members who have come along and taken part today. There were many common themes, and, although I have no doubt that the system works for many, there remains a significant minority for whom it does not. We heard repeated themes of a lack of communication and of problems requiring faster action, greater use of enforcement powers and more action against those who are self-employed and are hiding their income. I am grateful for some of the points the Minister made, but the fact that the Financial Investigations Unit has existed since 2014 suggests that clearly there are still problems. I hope that, with the additional staffing it has gained, we will see further action in the future.
Question put and agreed to.
That this House has considered the effectiveness of the Child Maintenance Service.