Clause 3
Child Maintenance and Other Payments Bill
3:00 pm

Functions of the Commission: general

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Paul Rowen (Shadow Minister, Work & Pensions; Rochdale, Liberal Democrat)

I beg to move amendment No. 80, in clause 3, page 2, line 11, after ‘efficiently’, insert

‘and the Secretary of State may by regulation provide for the Commission to be liable to pay compensation where—

(a) maladministration by the Commission is accepted, or

(b) the Commission has exercised its power to write off arrears in accordance with section 41E of the Child Support Act 1991, as inserted by section 31 of this Act.’.

The clause deals with some of the general functions of the commission. The amendment seeks to ensure that something is set up and included in the Bill to deal with payment of compensation where there is a clear case of maladministration or where, as I mentioned earlier, the commission has exercised its power to write off arrears, particularly, as has been mentioned earlier, in the case of past debt.

Currently, the CSA, because it is an arm of the Department for Work and Pensions, uses the “Guide to financial redress for maladministration”, which allows financial redress if certain criteria are fulfilled. Given that CMEC will not be part of the Department, but will be an independent body, can such a financial redress guide apply? If it will not apply, what arrangements will the Minister put in place to ensure that clear criteria are set out to allow, in certain agreed cases, for financial redress?

At the moment, the system operated in respect of the “Guide to financial redress for maladministration” is not very good. I refer the Minister to the independent case examiners’ annual report 2006-07, which stated that a

“particular problem to date has been the Agency’s”—

that is, the CSA’s—

“failure to identify the need for financial redress despite acknowledging its maladministration. During the year, we identified 618 cases where the question of financial loss or an advance payment of arrears arose. Disappointingly, over 80% of these had not been considered for financial redress when the Agency itself looked at the complaint.”

That is a damning statement of the CSA’s current operation. We are now moving to the commission and I hope that the Minister will say that proper procedures and arrangements will be put in place to ensure that, when maladministration is demonstrated, a clear mechanism will be set out whereby a parent can receive the payment in compensation.

The Minister might say that the second route that will be applied is that of the parliamentary ombudsman. However, we all know that at present the recommendations of the parliamentary ombudsman are not binding on the CSA. They are only recommendations. Of the 618 cases that the case examiners looked at, the CSA had not even considered the payment of compensation in 80 per cent. of them. It is important to have a fresh start. We are saying that the new agency will change what has happened in the past. We must have an assurance or some mechanism to ensure that compensation will be paid when maladministration has been demonstrated.

3:15 pm
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Andrew Selous (Shadow Minister, Work & Pensions; South West Bedfordshire, Conservative)

I should be grateful for the hon. Gentleman’s thoughts on how the application of maladministration under the measure that he is proposing would be different from the reaction that we have received from the Government to the verdict of maladministration in respect of occupational pensions. That was a source of considerable dispute on the Floor of the House yesterday afternoon.

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Paul Rowen (Shadow Minister, Work & Pensions; Rochdale, Liberal Democrat)

As a member of the Public Administration Committee, we discussed such matters this morning. We agreed on behalf of all parties to write to all hon. Members to request that they look clearly at the issue, as the debate demonstrated yesterday, and at the principle that people have not been given proper redress. It is important that, as a fresh start, we set out what will happen. If something goes wrong, we will make it clear to the commissioners what we expect them to do. Parents and children have a clear right to expect that.

We are having a fresh start. We do not want to go back to the mess that has existed with the CSA. I hope that the Minister will reassure us and, if he is not willing to accept the amendment, that he will introduce regulations that set out the position clearly. He will have to do that anyway, because CMEC will not be part of the Department for Work and Pensions, so in a sense the maladministration guide should not apply. We need a clear statement from him, as do parents, about how maladministration will be dealt with.

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James Plaskitt (Parliamentary Under-Secretary, Department for Work and Pensions; Warwick and Leamington, Labour)

Let me see whether I can reassure the hon. Gentleman. In a similar way to the scheme that is currently operated by the Department, the commission will administer a compensation scheme for cases of maladministration. It will provide recompense when commission error has an adverse effect on the lives of our customers. That is standard practice for a non-departmental public body of that type, and it can be administered by the commission as being incidental to its functions, without the need for the specific provision that he seeks.

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Andrew Selous (Shadow Minister, Work & Pensions; South West Bedfordshire, Conservative)

Will the Minister say whether the payment will be the level of compensation that the CSA currently pays, which is about £50 for the inefficient handling of a case? Are we talking about the same sort of amounts or slightly higher?

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James Plaskitt (Parliamentary Under-Secretary, Department for Work and Pensions; Warwick and Leamington, Labour)

As the hon. Gentleman knows, payments of the sort to which he has referred are made by the existing agency. There are also special conciliatory payments,  which can be much higher than that. I envisage that a range of payments will be available under the existing scheme, but I would not like to anticipate precisely what levels they will be at. The current scheme will provide financial redress for maladministration by making payments to remedy actual financial loss and exceptionally, as I have just said, consolatory payments to acknowledge the personal impact of an error. It is for those reasons that one cannot anticipate the levels, which will often be case specific.

Details of this compensation scheme will be decided by the commission, albeit within certain parameters set by the Secretary of State through the financial memorandum and guidance powers, and subject to usual Government accounting rules and principles. The commission will also handle any cases of maladministration that occurred before the transfer of functions from the Secretary of State to the commission on behalf of the Secretary of State.

We have decided against seeking a blanket power to write off debt that may appear to be unrecoverable. We are, however, seeking a power in clause 31 to write off debt in very limited, carefully specified circumstances. Those circumstances include where a parent with care has asked for cessation of recovery of debt and where it would be unfair or inappropriate to continue seeking the recovery of debt—for example, where a parent with care and a non-resident parent are reconciled, and the parent with care requests that CMEC does not recover the debt.

We also propose to write off debt where the non-resident parent is deceased and the debt cannot be recovered from the estate. In most cases, the commission will act in accordance with the wishes of the parent with care, and compensation will therefore not be appropriate. Where the commission accepts that there has been maladministration on a particular case, compensation would be dealt with through the scheme, as I have just outlined.

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Paul Rowen (Shadow Minister, Work & Pensions; Rochdale, Liberal Democrat)

I am grateful to the Minister for that explanation. Perhaps he will provide us with a note giving us an idea of the range and how the scheme will operate.

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James Plaskitt (Parliamentary Under-Secretary, Department for Work and Pensions; Warwick and Leamington, Labour)

I think that I covered that in response to an earlier intervention. It is difficult to quantify the range when, as I have indicated, some of the settlements will be highly case specific on assessments of injury to the party concerned. Therefore I will not commit to specifying the payments, which cannot be exemplified in the way in which the hon. Gentleman seeks.

In conclusion, the Department already operates a compensation scheme for maladministration that is accepted by the ombudsman, and the commission will operate a similar scheme. The commission will also be responsible for administering complaints and compensation relating to maladministration that occurred before it came into being. Furthermore, where the commission uses its new power to write off debt, it will in most cases be acting in accordance with the wishes of the parent with care. I hope that that has reassured the hon. Gentleman and that he will withdraw his amendment.

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Paul Rowen (Shadow Minister, Work & Pensions; Rochdale, Liberal Democrat)

I am grateful to the Minister for that answer, which will reassure many parents. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

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Andrew Selous (Shadow Minister, Work & Pensions; South West Bedfordshire, Conservative)

I beg to move amendment No. 4, in clause 3, page 2, line 11, at end add—

‘(4) The Commission must publish accurate and timely management information data in order to facilitate scrutiny of its performance.’.

We are back on to the subject of the provision of timely and accurate information by the new body, which will obviously start from a pretty troubled place given the current state of the CSA. My contention is that it will need careful scrutiny and monitoring of its performance on a range of fronts. We have heard about the debt issues. That certainly would be among the management information that I want to see CMEC produce regularly.

Obviously, CMEC will be non-departmental public body. Some concerns have already been expressed that it will be slightly more removed and perhaps slightly less subject to parliamentary scrutiny than would otherwise be the case. We would therefore like clause 3 to require the commission to publish the key indicators of its performance, so that pressure can continue to be put on it to ensure that it becomes the type of organisation that we all want it to become.

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James Plaskitt (Parliamentary Under-Secretary, Department for Work and Pensions; Warwick and Leamington, Labour)

I think that this will be a brief debate, because I assure the hon. Gentleman that the commission is already required to publish a range of information to allow sufficient scrutiny. The commission, like many other non-departmental public bodies, such as the pensions regulator, is required to prepare, publish and lay before Parliament annual reports and accounts each financial year. The report must cover all the commission’s activities, but, in addition, we require the inclusion of four other matters: first, the commission’s strategic direction, including information on how that direction is kept under review year by year; secondly, the commission’s objectives and targets, including information on the steps that are being taken to meet them and the extent to which they have been met; thirdly, the steps taken to monitor the commission’s performance in ensuring that its functions are exercised effectively and efficiently; and fourthly, information on the extent to which the commission has relied on the contracting out provision in clause 8.

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Andrew Selous (Shadow Minister, Work & Pensions; South West Bedfordshire, Conservative)

I would be grateful if the Minister were to point out where those requirements are in either the Bill or the regulatory impact assessment.

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James Plaskitt (Parliamentary Under-Secretary, Department for Work and Pensions; Warwick and Leamington, Labour)

The requirements do not appear in the Bill, but they will be evident in due course, primarily through regulations. Collectively, they will provide a comprehensive, accurate and timely report on the commission by which its performance can be scrutinised by Parliament. We also anticipate that, like the CSA, the commission will continue to publish on a regular basis a summary of management information statistics.

I hope that I have reassured the hon. Gentleman that the amendment is not necessary, because the matter has already been covered. On those grounds, I hope that he will withdraw the amendment.

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Andrew Selous (Shadow Minister, Work & Pensions; South West Bedfordshire, Conservative)

This brief debate has illustrated one of the problems with the way in which the Government have brought the Bill forward compared with the Welfare Reform Act 2007. That measure was prepared by the same Department, and my colleagues who served in the Committee that considered it were provided with draft regulations. I do not know whether the Department and its officials were scarred by the experience of having to provide such information, but we are debating only the broad outline or skeleton of these measures.

I am grateful to the Minister for letting us know that the detail of exactly what CMEC will be required to report will be made available in regulations. Of course, members of the Statutory Instrument Committees that consider the regulations will only have a choice of accepting or rejecting the regulations in their entirety, and they will not be able to add things to them. It would have been helpful to have such information in draft regulations.

Having said that, I have no reason to doubt the Minister’s word. I am reassured that management information will be copious, adequate, and frequently supplied. From that, we will be able to tell, clearly and easily, whether CMEC is achieving its objectives and whether it is going backwards, forwards or standing still. On the basis of what the Minister has said, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 3 ordered to stand part of the Bill.