I beg to move,
That this House
has considered the Child Maintenance Service.
It is a pleasure to serve under your chairmanship, Mr Bone. I want to thank the Backbench Business Committee for giving us the opportunity to discuss this extremely important issue affecting families across the UK. I would also like to extend my thanks to my colleagues present, who may have had to cut short their Easter weekend to attend today. The fact that they are present highlights the importance of this debate.
Many constituents have approached my office regarding issues with the Child Maintenance Service. In their experience and mine, it is an extremely frustrating and inefficient service to deal with. When it is responsible for something as important as financial support for children, and quite often single-parent families, it must execute its duties properly and get it right. That is not happening.
The Child Maintenance Service is under-resourced, unfit for purpose and failing families across the UK. It has disregarded historical maintenance arrears. It allows non-resident parents to renege on their responsibilities by failing to collect current maintenance, and it imposes a tax on parents who desperately require its services. It fails to provide a service of the decent standard that should be expected of any Government agency.
Despite the length of time I get to speak, when writing this speech I was not thinking about which issues to speak about; I was thinking about what things I would have to leave out, as the maintenance system is so rife with issues. The CMS needs a radical overhaul to ensure that parents and their children can access the support they are entitled to. That support is not optional.
I congratulate the hon. Lady on securing this important debate on an issue that is getting attention in lots of areas at the moment. A group that she may want to leave out is those who are able to reach agreement. The Minister will come back and say that family-based assessments have increased and that many more are reaching agreement. Will the hon. Lady drill into the detail of whether or not that shows the success of the current system?
The hon. Gentleman is right; I am not going to concentrate on that. Family-based arrangements are what everyone wants, but they do not happen in all cases. I am here to support and talk about those who are outwith that scheme.
The support that the CMS gives is not optional; it is a legal right for children. The Child Maintenance Service is failing to secure children and their parents with care their rights, or it is taxing them to gain access to what is theirs. Maintenance payments have had both a current and historical problem with underpayment, people not paying and arrears. To date, the outstanding arrears for child maintenance stand at an astonishing £4 billion. That figure alone shows the extent to which the Child Support Agency and the Child Maintenance Service are failing people. At this point, I should add my thanks to the charity Gingerbread, because I am drawing heavily on its work in its recent report. It is likely that that figure does not represent the full picture, as paying parents under direct pay are assumed to have paid their maintenance in full unless the CMS is told otherwise.
According to Gingerbread, which has been doing fantastic work to raise this issue and support families, during the transfer process from CSA to CMS many parents have been pressured into not transferring their historical arrears over to their new claim. The Department for Work and Pensions calls that a fresh start. However, no equivalent letter is sent to paying parents to encourage them to pay off their arrears. In 2013, the UK Government issued “Preparing for the future, tackling the past”, in which they outlined their strategy of disregarding past debts and instead focusing on the payment of current maintenance. In line with that strategy, between December 2015 and March 2016, debt collections per case dropped from £35 to £22.
The DWP has calculated that as little as 12% of CSA debts on both the CSA and CMS systems will actually be collected. Current arrangements are allowing parents to renege on their responsibilities. Even though these debts were accrued in the past, parents should still be held responsible now. Collecting historical arrears should not mean a trade-off with current arrears; both are a priority.
I agree very much with what the hon. Lady is saying. I want to mention one of my constituents, who first approached me in September 1999 and the father of whose child has steadfastly refused to contribute anything. He has spent a great deal on lawyers in the intervening almost 20 years to avoid paying maintenance. Today he owes £55,000, of which £15,000 is owed to my constituent. Does the hon. Lady agree that it is absolutely vital that the money is collected and that the parent receives what is owed to them?
The right hon. Gentleman makes an absolutely valid point. That is exactly what I am trying to argue. We should chase arrears; not to do so seems to fly in the face of common sense and natural justice.
Members of the public, and indeed Members of this House, may not be aware that during the switch from CSA to CMS case history is not transferred, leading to a loss in accumulated knowledge that wastes resources and could allow a non-resident parent another chance to renege on their payments. Despite waiting years for an effective service that will proactively seek to collect owed maintenance, these parents with care and their children are being forgotten, with no option for recourse. If debts are uncollectable or unlikely to be collected, parents must be made aware of that. Additionally, if the UK Government are unwilling or unable to take the steps to secure children their rights, they must compensate receiving parents for their failings.
Although the CMS is taking the approach of focusing on current maintenance, it is also failing in that regard. Most arrears were accumulated under the CSA. However, since the launch of the CMS in 2012, nearly half of paying parents have been allowed to accrue arrears. As I have said, those in direct pay are assumed to have paid the full maintenance. Given that 70% of CMS cases come under direct pay, compared with just 33% of CSA cases, the magnitude of the problem under CMS is likely to be far larger than the numbers show.
Just because parents agree to pay, it does not mean they will fulfil their obligations. Under the CSA, between January and March 2016, one quarter of paying parents did not pay the full amount due. Of that number, two thirds paid less than half or nothing at all, which demonstrates that the priority of focusing on the payment of current maintenance is not being met. This Government’s strategy is failing.
Stringent criteria must be fulfilled before CSA debts will even be considered for collection under the Child Maintenance Service: a parent must open a CMS case, and CSA arrears payments must have been received in the last quarter before moving to the Child Maintenance Service, or the parent must explicitly ask for those arrears to be collected.
The Child Maintenance Service process is extremely difficult to understand and is often not communicated properly to parents. For example, DWP figures show that 17% of those using direct pay whose payments stopped or never even started were not aware that the CMS could even pursue payments for them. Similarly, 15% did not even know about the collect and pay service. Shockingly, a recent report from PayPlan found that more than half of single parents did not even know their child was eligible for support from their absent parent. Communication with parents about services available to them and their rights is lacking; they need to be informed.
The CMS needs not only to take action to collect historical arrears, but to make parents aware of their rights and of what the CMS can do to assist them. A variation claim—the main tool for receiving parents to ensure that their ex-partners’ proper income is taken into account—is kept secret. The cynic in me believes that that information is intentionally withheld to reduce the likelihood of any sort of action being taken.
Taking simple measures such as providing written breakdowns of arrears, how they were accrued and what options are available to people would go a long way towards improving parents’ interaction with the service and awareness of their rights.
I congratulate the hon. Lady on securing this very important debate. Is she aware that in Northern Ireland, 40 members of staff in the Department for Communities who deal with child maintenance are apparently to be laid off? The Department will find itself without experienced staff when it should be ensuring that money goes from absent parents to the children who urgently require it.
I thank the hon. Lady for her intervention. She is absolutely correct. Indeed, what she refers to ties in with the whole DWP agenda of closing offices. I will come on to the under-resourcing of that Department.
Even if parents have an understanding of what the CMS can do to assist them, there is a hesitance on the part of the CMS to take enforcement action. That is a major reason why arrears have been allowed to accrue historically and currently.
Does the hon. Lady agree that in effect that deprives resident parents of their rights, because they have no other means of enforcement? Their legal rights to enforce through the courts have been taken away by the child maintenance system, and that leaves them powerless to pursue what is their right: the maintenance due to them for their children.
I thank the hon. Lady for her intervention. Again, I completely agree. When I went to the Backbench Business Committee to apply for this debate, I was aware even there of the consensus across the House on the lack of action and the failings of the Child Maintenance Service, and that is being reinforced by these interventions.
Variation claims place the burden of proof on the parents with care to show that their ex-partners’ incomes are misrepresented. I have constituents who have either hired private investigators or become private investigators themselves to prove to the CMS that their ex-partner is lying about their income. That is not their job; it should be the job of the CMS.
I congratulate my hon. Friend on bringing this debate to the House. Does she agree that improvements need to be made to diminish further the ways in which former partners can manipulate and use the system as a weapon of abuse and control? That was the case with one of my constituents, who, as my hon. Friend clearly states is happening commonly, had to prove her ex-partner’s financial status.
I thank my hon. Friend for his intervention. Yes, that is at the heart of what I am trying to get across today. This system is not working, and the bottom line is that children are suffering because of it.
Both parents and my staff have raised concerns about the difficulty of making a complaint. The new system makes the first complaint an “inquiry” rather than a complaint. Parents and even my staff have to be persistent in escalating their issue to a complaint to have it properly investigated. I understand that the CMS cannot utilise the enforcement actions available to it without proper cause. However, I have had through my door numerous constituents who have not received full and proper payments from their ex-partners. Despite that evidence having been shown to the CMS, there is a severe lack of urgency. Parents are required to jump through hoops to get any sort of action taken and to fight their case. That demonstrates the lack of understanding of how important it is for parents with care to receive full and timely payments. It has also contributed to a culture of non-payment, which leads to ironically named “paying parents” not paying at all.
Without wishing to sound dramatic, I believe that the Child Maintenance Service should strike fear into the hearts of parents not making their proper contributions. If the CMS took more seriously its duties to pursue maintenance, parents would perhaps not be allowed to make incomplete, late or non-payments. The UK Government have sanctioned benefit claimants and clawed back supposed overpayments. I would like to see them take an equally enthusiastic approach in ensuring that “paying parents” actually pay.
In addition, parents must pay the maintenance that reflects their income. A major difference between the CSA and the CMS is that parents cannot claim for a variation on the grounds of a “notional income” if parents have assets of more than £65,000 or a lifestyle inconsistent with their stated income. That has removed a vital option whereby parents with care can challenge their ex-partners’ claims.
Furthermore, non-PAYE income such as dividends and rental income is not automatically taken into account when calculating maintenance. I have constituents who know that their ex-partner is earning large sums from rental income, for example, but that is not taken into account, allowing parents to minimise their maintenance payments at the expense of their children. We have to see the CMS take action against non-payment, and a change in the rules is required to ensure that maintenance calculations reflect incomes and that, in particular, wealthier parents with assets support their children.
A closer relationship with Her Majesty’s Revenue and Customs would be welcomed, especially regarding data sharing. A bolstering of the financial investigation unit would also be welcomed. That would ensure thorough investigations into those who are self-employed or have complex financial arrangements, so that they pay the right maintenance. It is not enough simply to add to parents’ arrears; action must be taken to collect the money.
The Child Maintenance Service is at crisis point. So long as that continues, we are allowing parents to avoid their responsibilities to their children. It is a common misconception that it is the receiving parent who is losing out if a paying parent fails to make proper payments, but it is the children who are paying the price. Proper receipts of child maintenance have been shown to lift one in five families out of poverty. If the UK Government do not take proper action to secure children their rights, they will be allowing that to happen. The risk of poverty for children in single-parent households is almost double that for children in a household with two parents. Child maintenance is therefore a vital source of income for those families. Some single parents are working themselves to exhaustion to provide for their children while non-resident parents and the Child Maintenance Service allow them to. The Minister must publish the new maintenance collection strategy with set targets for collection; a dedicated enforcement team focused on arrears collection and the collection of current maintenance; and greater use of enforcement powers.
Before the process of coming under the child maintenance system, a parent must pay a £20 charge, and when they come under collect and pay, receiving parents are taxed 4% of their payments. Responses from Ministers have revealed that that is to raise money to fund the maintenance service and to encourage parents to make family-based arrangements—arrangements between themselves—rather than having an application to the CMS as the default option.
When I tabled a question asking what percentage of those who applied to the CMS were parents with care and what percentage were non-resident parents, I was dismayed to find that those figures were not available. It makes sense to assume that the vast majority of people who make the initial application are parents with care. Many of those parents will be applying to the CMS out of necessity; they will pay the £20 application fee and be taxed at 4% of the maintenance that is collected simply for accessing their rights.
Of those who applied to the CSA, one third had already had a failed family-based arrangement. Although charges may encourage some parents to make family-based arrangements, they can also deter people from going into the child maintenance system in general, leaving them entirely without assistance or recourse. That is particularly true for people on low incomes, who require support the most. Two fifths of receiving parents on direct pay said that they found the application fee difficult to afford; so, too, did half of those on very low incomes. One quarter of receiving parents who moved from direct pay to collect and pay said that they found the 4% collection fee difficult to afford also. Astonishingly, 16% of parents with an FBA said that being unable to afford the fees was one reason why they did not apply to the CMS. Instead of supporting families, charges are taking money out of parents’ pockets, food out of children’s mouths and clothes off their backs—through no fault of their own and all for simply accessing their rights.
Pushing parents out of the maintenance system can leave them without any money at all. Some 29% of former CSA parents with care said that the application fee was a factor in not having an arrangement, and the 4% collection charge influenced 24% of those same parents. The charges are actively deterring people from seeking any assistance at all when they most need it.
One group in particular requires special attention and sensitivity: parents who have been the victims of domestic abuse or violence. Of those who applied to the CSA, half had experienced violence or abuse at the hands of an ex-partner—a substantial group, which must be considered with great care. After a year, about a fifth of receiving parents whose direct pay arrangements had broken down or had not even started said that domestic violence was a factor. In addition, 22% of receiving parents said that domestic violence made it difficult to set up a direct pay arrangement. That shows that so many such parents need maintenance services and need them to be effective. I appreciate that the Government have removed the £20 application fee for these parents; however, the same understanding and approach must be implemented in relation to the 4% collection charge. Those parents cannot be expected to interact in any shape or form with their abusive ex-partners. For most parents, the Child Maintenance Service should not be a default starting point but for such parents it absolutely should. Taking simple steps such as allowing for anonymised direct pay could protect those victims. When we consider that many parents on low incomes are deterred by charges, forcing those parents to deal with their ex-partners to save money is a danger to their security and wellbeing, and often, I should add, to the children involved as well. Some parents end up not reporting unpaid maintenance out of fear of reprised attacks or worsened relations. Those parents deserve to be treated with the utmost dignity and respect, and the Government must therefore make urgent provision for that.
Charges can be a barrier for parents and their children. While I believe that parents should seek a FBA if possible, we should not exclude those who have tried and failed. While I appreciate the Government’s need to fund the service, they should not penalise children. In a worst case scenario, the 4% charge should be added on to the 20% charge that non-resident parents incur under collect and pay—they should pay the price for non-compliance, not their children, especially if it can be proven that a FBA is not working or that the paying parent is not making the contributions that they should.
Gingerbread recommends that a means test also be implemented to ensure that those who most need the service are not deterred by the £20 application charge. Taxing children and parents, many of whom apply to the CMS out of necessity because of low incomes or domestic abuse, is not just. They have a legal right to this support, and the Government should not be skimming off the top of what can be a vital lifeline. We must therefore see an end to the 4% tax on maintenance.
I do not want to portray all paying parents as villains. Many pay support for their children both inside and outside of the maintenance service, but the CMS system also penalises them. It is an imperfect system for either parent. Implementing a 25% threshold on a change in income on paying parents can leave many lower income parents struggling, and allow higher income parents to retain more money that could be used for supporting their children. I agree that having the threshold provides payment stability and ensures that the CMS does not incur large administration costs for changes in income; however, it must be set at a level that ensures a more accurate reflection of parents’ incomes—the 25% rule must be looked at. CMS staff have also indicated to Gingerbread that there has been reluctance to move cases from direct pay to collect and pay because of the high 20% charge. Staff therefore need to utilise other enforcement measures to ensure proper payment. There must be a review of those charges to encourage staff to move cases to collect and pay if need be, and not to be deterred by placing higher charges on the payments of non-resident parents.
Both groups of parents will undoubtedly have had major issues with actually dealing with the Child Maintenance Service. That is one complaint that every parent who comes to my office has in common. The main complaint is that they are passed from pillar to post and every time they call the CMS they are given a new caseworker who has no previous knowledge of their case, requiring the calling parent to provide lengthy explanations of often complex arrangements within a complex system. Staff often provide parents with conflicting information depending on the call handler. One caseworker told a staff member from my office that due to a lack of resources, oral responses were given rather than written responses. That often leads to contradictory information being given to parents by different caseworkers. My staff have said that it is even difficult for MPs’ staff to receive a written response from the Child Maintenance Service. In one instance, it caused one of my constituents to accrue thousands of pounds worth of debts. He was not notified of that over the phone and was only informed in writing several months down the line. However, when letters are sent, and they still are, they can be misleading. The most ridiculous issue brought to my office was when a constituent received a letter outlining his maintenance for his three children. Imagine his surprise—or horror, rather—considering he had only ever fathered two children.
I have already outlined how receiving parents lack awareness as to what options are open to them to pursue maintenance, and that staff are reluctant to enforce action. However, parents who are aware have reported to Gingerbread and my office that they feel they constantly have to pursue the CMS to pursue their ex-partner. Rather than a game of cat and mouse, this is a game of dog, cat and mouse. When we look at how much is spent in total each year on the collection of child maintenance, that is not surprising. From 2013-14 to the forecasted projected spending for 2016-17, the total spent on the CSA and the CMS has decreased by 21%. That reflects what has been heard from staff—that the service is underfunded and unable to deal with its workload properly. As a result of poor customer service, satisfaction rates among both groups of parents have dropped significantly over the years.
“Dissatisfied” would perhaps be an understatement for how people feel about the Child Maintenance Service. Both groups of parents are suffering from the CMS’s administrative and operational inefficiency, which makes any dealings with it unbearable. Complaints are not taken seriously and communication on rights and actions is almost non-existent. I welcome the Government’s reviews, but the CMS is rife with problems, requiring a radical overhaul of how it operates.
With £4 billion of uncollected maintenance, and parents being allowed to renege on their current liabilities, the Child Maintenance Service is failing parents and children. Yes, implementing arrangements to deter and minimise non-compliance are welcome, so long as they do not deter parents with care. What is inescapable, however, is that the best way to secure for children their legal rights is for the Child Maintenance Service to get in there and secure those rights for them.
The Government need to take steps to strengthen enforcement teams to enforce payments and forge a closer relationship with HMRC to see parents’ actual incomes accounted for in maintenance calculations. The UK Government have taken an approach to welfare that promotes self-reliance while shrinking the welfare state. What better way to ensure self-reliance than to ensure that parents pay to support their children? If those children are not the responsibility of the state, they are the responsibility of their parents, who must pay their contributions.
The system of charges needs urgent reform. It is unacceptable for parents who turn to the CMS out of nothing other than necessity to be taxed for doing so. Children should not lose out on a single penny or pound—or shilling, in my memory—due to their parents’ non-compliance. Implementing reforms to abolish charges and collect maintenance properly would benefit parents with care by allowing them to receive maintenance in full and on time, and also provide a lifeline to lift low-income families out of poverty.
A culture of non-payment has developed. Parents are failing to make full and timely payments, because the Child Maintenance Service and the UK Government are allowing them to. As Gingerbread says, children living in single-parent families are at almost twice as much risk of poverty as children in coupled families. The UK Government should protect victims and survivors of domestic abuse, not punish them financially for their inability to engage with their abusive ex-partners. It is clear that the UK Government remain wedded to austerity, in stark contrast with the Scottish Government’s determination to create an inclusive, equal Scotland.
I call on the Minister to follow up on the Gingerbread recommendations. I will not go through them again, but they are easy to access, and there are not a lot of them. They would make a huge difference to parents with care and, more especially, to children. The CMS is insufficient, inefficient and incapable. Our children deserve better.
I thank Marion Fellows for securing this debate. I should perhaps put on record that I have used the Child Support Agency for the last 13 years. I would liken most of that time to banging my head against a brick wall. I also spent four years as a caseworker supporting parents with their cases, particularly with the Child Support Agency, the predecessor to the Child Maintenance Service, due to my personal knowledge of the procedures.
My experience is that staff are not properly trained. CMS staff in particular, since the move to the Department for Work and Pensions, have no idea what their enforcement powers are, are extremely reluctant to use them and regularly fail to do so. Proper compensation is also lacking when the CMS makes mistakes. I appreciate that the volume of complaints to my inbox about the CMS is relatively small, but that is because the vast majority of 3 million cases are still under the CSA system and have not yet been transferred to the CMS. Given my experience, that is probably a blessing in disguise.
I know that that is not this Minister’s fault. I feel sorry for her, because she has taken over a system that has had systemic failings for years. The fact that £4 billion in arrears is outstanding demonstrates how catastrophically single parents in this country have been let down by a system that was supposed to make collections easier. The hon. Member for Motherwell and Wishaw has ably outlined some of the key problems on which Gingerbread has made recommendations: I will concentrate specifically on avoidance by self-employed parents.
As we know from the Chancellor’s recent statement, a vast number of people are moving to self-employment. Their numbers are growing, particularly among non-resident parents. Self-employment makes avoiding child maintenance easier—there are online forums that provide advice to non-resident parents on how to avoid paying child maintenance—and frankly, the Government have not stepped up to the plate. It is absolutely scandalous that parents whose legal rights to maintenance for their children have been taken away and given to the state find the state unwilling or unable to enforce those rights. That is not good enough, and in my view, it is discriminatory, because it operates largely against women, as 75% of single parents with care are women. The Government must examine the issue again.
I call for specific action by the Minister. In particular, I echo the calls on “lifestyle inconsistent with earnings”. It is ridiculous to suggest that a parent who might have separated from their partner 10, 13 or 15 years ago should have a detailed knowledge of their financial circumstances. Often, the only evidence available to show the Child Maintenance Service is evidence of a lifestyle inconsistent with earnings. For example, a constituent of mine who left his wife and set up with another partner had a Range Rover and foreign holidays abroad, but was £33,000 in arrears. Eventually, after a long court case, the matter went to a tribunal hearing. The evidence in that case was lifestyle inconsistent with earnings; it is vital that that clause be reinstated.
The Government must consider how tax rules are used to disguise assets. In particular, if someone is self-employed or a director of their own company and makes a director’s loan into the company, that asset is owned by them, and it means that they can take a large amount of money out of the company, but it is not considered an asset for the purposes of child maintenance. That is wrong. It allows abuse of the system, and it is being used a lot. That information should be available from Companies House and Her Majesty’s Revenue and Customs. The issue needs to be examined again.
Further, I urge the Government to consider giving women an enforceable right in the courts where there is an asset threshold. Where that asset threshold is set is a matter for the Minister and her team to decide, but if there are more than £500,000 in assets, for example, that case ought to fall outside the CMS, because they are not taken into account. For example, the family home is exempt from consideration among the assets of the non-resident parent.
It does not take much looking to find past cases in the tribunal system where there have been assets of several million pounds in the form of the family home, expensive sports cars and other high-value items that the CMS cannot take into account because they do not generate an income. That is a convenient shelter allowing high-net-worth individuals to avoid paying for their children. The issue is important. The women involved in these cases have no other way of enforcing their rights. The Government have removed their rights in court, and they need to be reinstated, because so many assets have been excluded from consideration that non-resident parents’ ability to pay for their children is not being reflected.
I mentioned earlier that CMS staff do not know their rights. The CMS is completely unwilling to request data from the Land Registry, for example. I support co-location of HMRC and CMS staff. HMRC should automatically notify the CMS if a non-resident parent’s claim for tax relief increases. If they put in a tax return and are claiming up to the tax-free allowance in income, the CMS should automatically be notified. We should have much more effective data sharing across Government to enable enforcement.
I fought the system as a single mum for eight years. As a lawyer, I thought that I would be able to understand and work the system, but even now that I am a Member of Parliament, we still cannot get it to work. It is really a scandal and a disgrace that lone parents are being let down so badly by a system that allows non-resident parents to manipulate it.
I am grateful for this debate. If, as a Government, we are to be there for everybody, we must support those who are least able to enforce their rights. The fact that their legal rights have been taken away means that the burden and responsibility on the Government are that much greater. Having practised as a barrister for 13 years or more, I know that a judge in the courts would look at these things very differently from the Government. Quite frankly, it is time to give women more rights to take these matters through the courts, or to make sure that staff are properly trained to take the necessary action and enforce the rules appropriately. I note that there are £3.9 million of arrears in the Minister’s constituency; regrettably, there are £5.4 million of arrears in mine. I say to any single parent who reads this debate: please contact your MP—allow us to try to help to make the system work for you.
When the CMS makes mistakes, it should compensate appropriately. The compensation regime for the CMS has changed since responsibility moved to the DWP. That is wrong, and I suspect that we will see some reports from the parliamentary ombudsman about maladministration claims against the DWP. It is unacceptable that when the Department has made mistakes, it has been the children who have had to pay for them. There are some simple steps that could be taken that would not necessarily cost the Government huge amounts of money, but which would help parents to enforce their rights.
I thank Marion Fellows for setting the scene for us in detail. As elected representatives, we are all well aware of the issues because we see them in our offices every day. I will comment on some recent cases that I have seen.
The system is supposed to help people, but we often see cases in which it does not. It is meant to ensure that parents who do not have full custody of their children are still responsible for part of their care. Such a system is needed because, unfortunately, there are those in our society who believe that leaving their children’s mother entitles them to leave their children behind too. That does not need to happen—indeed, it should never happen—and the system is in place to address that. We are highlighting the system’s shortcomings today, but to be fair, the CSA has been able to sort out some of my constituents’ problems, whether those problems have been on the father’s or the mother’s side. There are occasions when things go right, but unfortunately there are more occasions when they do not. The system is in place to ensure that responsibility is spread, but as the hon. Lady pointed out, every time it is not used successfully, the loser is the child. It is also clear that the system is in no way addressing all the issues. I believe that a better and more effective way can be found.
The hon. Lady referred to a report by the charity Gingerbread. I also read that report—I am sure the Minister did too, because she is very thorough. The report, which was launched in June last year, found that
“hundreds of millions of pounds of child maintenance arrears owed to children are failing to be collected by the government”.
My hon. Friend mentions children, who are the most vulnerable ones in these cases. Surely it is time we revamped the whole system—it would not be the first time that a Government scrapped a system and put in place a new one that worked. We have to think of the vulnerable.
My hon. Friend is absolutely right: it is the children who are vulnerable. In many cases it is the mother, too, and on the odd occasion it is the father—it depends on the issues—but the focus of our attention should be on the children, as it is in this debate.
Gingerbread referred to
“new debts piling up in the new system worth an average of £668 per family.”
That is a huge amount of money to a single-parent family; it could be the uniform or the lunch money. There must be a way of getting that money paid or the matter addressed. Gingerbread also notes that
“almost £4bn of unpaid maintenance arrears has accumulated over the 23-year lifespan of the Child Support Agency…which is in the process of being shut down and replaced by its successor, the Child Maintenance Service”.
We hope that the CMS will learn from the mistakes of the CSA and deliver a better system. I look to the Minister to explain how such a better system will be unveiled and how it will ensure that parents and children get their money when they should. However, the Government estimate that only 12% of that amount is ever likely to be recovered. Although I may look to the Minister for a positive response and for guidance, I am well aware that the Government have already stated that they will not get all the money anyway—they have almost drawn a line in the sand and said, “We can’t do it.” I have to say that that is very disappointing.
Ms Ritchie, who is no longer in her place, referred in an intervention to the staff. Although the administration of the system is devolved, the rules, regulations and laws on the CSA and the CMS are decreed by Westminster. Staff are moved about all the time. In all my years of dealing with child maintenance issues, I cannot remember ever speaking to the same person twice about the same issue. More often than not, people phone up and say, “They said they would phone me back, but they didn’t.” How many times have I heard that? It is unbelievable how often staff move about and that happens.
Antoinette Sandbach referred to cases in which a father moves job and becomes self-employed. Off the top of my head, I can think of a couple of cases in which a father in a very comfortable position, earning big money, has said to his wife and two children, “I am not going to be self-employed any more—I am going to go and live with my dad,” and has run away from his responsibility for maintenance. I believe that is wrong. There are others who go on the dole or who take up a job as a taxi driver—I have nothing against taxi drivers, but their earnings are all cash in hand and they can declare their own figure after their expenses. We need to look at this.
There are also delays in the system. I am now in direct contact with the manager of the system in Northern Ireland. To be fair, contacting him seems to initiate a response, but what about all the other people who are not MPs? What about the mother who is at her wits’ end because she does not have the money to look after her children? I expect—as you and other hon. Members would, Mr Bone—the same response to mothers like her as there is to us.
Gingerbread has found that
“evidence suggests that decreasing effort is being put by the government into collecting more than £700m of arrears on existing cases…Meanwhile, within the new CMS, a new system of incentives and penalties was intended to prevent arrears arising in the first place. Yet, after almost two-and-a-half-years of full operation, £52.5m has accumulated in CMS maintenance arrears, with almost half of all non-resident parents in the system having some child maintenance debt. And these figures will increase as cases are gradually transferred across from the old system.”
I have also seen cases of parents—I have to say that in all cases they were fathers—who have moved out of the country and got a job abroad. I wonder how we can chase up non-residents of the United Kingdom.
I echo the cry of Gingerbread’s former chief executive Fiona Weir, who said in June:
“Britain’s child maintenance system is contributing to a culture where too many parents think it’s optional, rather than obligatory, to pay their child’s maintenance…The accumulated level of CSA arrears is staggering and completely unacceptable. With analysis showing that one-in-five families are lifted out of poverty by child maintenance payments, this is vital money that parents, and their children, can’t do without.”
She clearly outlined the issue and where we are on it. She went on to say:
“And with the Institute for Fiscal Studies calculating that poverty rates for single parent families will double by 2020”— therefore, the situation will get worse—
“more than ever that child maintenance owed for children needs to be collected by the Government.”
We look to the Minister and the Government to see how best they can do that.
There are also parents who are separated or divorced who come to a financial arrangement, which is an agreement by the two people. It is quite a good system, because by and large they come to a financial arrangement that is equal to what the CSA or the CMS would have arranged. However, I am frustrated, because sometimes the CSA—or, now, the CMS—will pursue those making financial arrangements to see if they can get more out of them. They almost look at them as easy targets and I find that most frustrating.
This issue is continually raised in my office. Just last week, I had a father in my office who has children from a previous relationship. His ex is in a better job than he is and is much better off financially. He has not run away from his obligations to support his children, but there must be a financial equation that is fair and realistic, and that enables everyone to do what they have to do. Fewer than half the eligible families receive child maintenance, an estimated 70% of closed CSA cases involve outstanding arrears, and £52.5 million is already owed under the CMS system.
Communication is also vital. Whenever a lady phones up looking for her CSA payments, I expect the Department to phone her back, so we must initiate a better system, because communication is so important. In the life that we live as MPs in this House, communication—how we relate to and respond to our constituents—is so much of our bread and butter.
I am conscious of the time, so I will finish with this. There are failures that are clear, and these must be addressed, so we must look at the rules, regulations and guidelines that come out of Westminster and consider how we can change them so that the system can work better, whether in Northern Ireland, Scotland, Wales or England. I look to the Minister for assurance that these past debts will be actively sought and that changes will be made to prevent that situation from continuing. With that in mind, we must do better than collecting just 12%.
Thank you, Mr Bone, for calling me to speak.
It is a pleasure to take part in this very important debate. It is a cross-party debate and quite rightly so, because this is a matter of cross-party concern; we all have constituents who have come to us and who are dealing with ongoing concerns about child maintenance arrears. So I congratulate Marion Fellows on securing the debate.
In many ways, I will echo the speech of my hon. Friend Antoinette Sandbach, who has very personal knowledge of this issue, but I also want to bring to bear my constituents’ concerns. In some ways, this will be a dress rehearsal for the consideration of my ten-minute rule Bill tomorrow, although today’s events may prevent that from happening. Nevertheless, I am sure that everyone will want to wait and consider my ten-minute rule Bill before we finish this Parliament. It focuses squarely on equity and justice.
Let me mention a point of principle on which we can all agree—especially Government Members, as it was very much a creature of Margaret Thatcher’s Government, and we want to follow through on it. It is the principle of parental responsibility, which recognises that we have a statutory child maintenance system and that all parents have continued responsibility to make reasonable contributions towards the upkeep of their children. It is an important principle and it covers all children. Whatever system we have in place, whatever statutory arrangement exists and whatever administrative reasons are given by the Government—convenience, expeditiousness, or whatever—we must not lose sight of the overarching principle of ensuring that the ongoing responsibility of providing maintenance for all children is met.
This process is focused on the children and not so much on the parents. Whether a parent is employed or self-employed, there must be an equity in justice for the ongoing maintenance of children; that is at the heart of the debate and it must continue to be at the heart of the Government’s actions as they carry out their review. I am not sure what will happen after today’s news, but we are waiting with bated breath for the Government to lay their report before the House after the 30-month review. It was promised in the spring. We are in spring—spring has sprung—and so we look forward to that report being laid before the House, as it will set out the Government’s view. I know that they have an ongoing five-year review, but the 30-month review is of the current system.
Everything is coming together. The Select Committee on Work and Pensions is also conducting an inquiry on the subject, and the Public Accounts Committee has been waiting to do further work on it with the National Audit Office. The spotlight is very much on the Minister; I hope she feels the heat. It may be the case that when previous Ministers appeared in Westminster Hall and before the rest of Parliament in many debates about the Child Support Agency, child maintenance was the main issue in our constituency casework. That is not the case now, but I would not want the Minister to feel in any way that the situation has been sorted and that she can tell us all, as I am sure she will, that family-based arrangements are on the up, and there were 70,000 or so in 2014-15; that, as I know from her evidence to the Select Committee, and her written evidence, there is a view that the CMS is performing well, with seven out of eight parents now addressing their child maintenance liabilities; and that things are improving. Nevertheless, I would not want her simply to go away and say that she can move on to all the other areas of her brief, because this issue remains a genuine concern.
I want to draw attention to a constituency case that amplifies my point. There is an issue with arrears. For example, my constituent went through the old CSA system and she battled hard. When people come to us as MPs, they are at the very end of their tether, and they come to us only because they have the wherewithal to do so. They have probably been through trauma and conflict in their relationship and they now have to face further trauma and conflict to try to get the just deserts for their children. Eventually, therefore, they come to MPs; we only see a snapshot of the issues that people face.
Many others have given up. In fact, the Minister may need to reflect on the issue of the £20 fee, to establish whether some people have given up because they see that £20 as money that would be better spent on putting food on the table rather than seeking maintenance—they might have heard bad stories and they might not have the confidence to go through the process.
Although the Minister might say there is some good news out there, we must reflect on the deterrent effect, as Lord Freud did when he said that we would have this review. He said that if there was an impact, particularly on the poorest families, as a result of any changes, we would need to reflect on the deterrent effect. I would like the Minister herself to reflect on it.
My constituent went through the whole process, went to a tribunal and eventually got an assessment, as she knew all along she would. Our constituents know that effectively assessments are being made that are completely out of step with what they themselves know about the lifestyle of the non-resident parent, and that are totally out of step with what that parent is contributing, if they contribute anything at all.
In the case of my constituent, there were accumulated assets of some £600,000, which the tribunal eventually found and which plainly needed to be tapped into regularly to support her teenage son. That has now left arrears of £40,000, but she asks, “Where will that come from?” At the end of the day, will she see that money going to support her son?
My constituent has told me, and I have referred to it in correspondence with my hon. Friend the Minister, that the reality is that the variation grounds that she had been able to rely on have now been abolished. She could rely upon those grounds to get through to the tribunal and eventually to get through that interrogation or inquiry because she was able to get that redress. However, that option has now been taken away from her and from anyone in her position. That rug has been pulled away from them, and so they are very much reliant on, let us say, what is in some ways the “cheap and cheerful” CMS system, but the CMS does not allow—in fact, it actually stymies—redress being pursued through the courts. That redress must be there, particularly in high-value and complex cases, of which there is an increasing number.
My constituent, along with others, is no longer permitted to seek such redress. The reality is that the variation grounds, which allowed for a parent with no apparent income to be treated as having a notional income, have been abolished, and we need to consider whether they should be restored. The issue of jurisdiction is relevant, because it is so limited now within the family courts for child maintenance—dealing with consent orders, and also with top-up payments, but only when there is in excess of £156,000 a year. In all other cases in which the parents cannot agree, this statutory child maintenance system is the only way to seek redress, so we clearly need to consider whether there should, at least, be another option, another way for constituents such as mine, who are not seeing justice, to have the redress they need.
In the case of my constituent, under the current system the non-resident parent would legitimately be able to have a nil maintenance liability. That is the reality. From £600,000 of assets, a £40,000 liability would now be nil. That is madness. It is ridiculous. It does not make sense. It is woefully unfair and goes against the principles that started off the system back with Margaret Thatcher, and now today under the 2012 scheme.
[Ian Paisley in the Chair]
We need, therefore, to look at the situation properly. Since 2012, any review or variation of the calculation can take account only of taxable income on the basis of Revenue and Customs data, primarily from tax returns and pay-as-you-earn. Without the opportunity to interrogate through tribunals, we are reliant on that data. In Select Committee evidence, the Minister has said that she is working hand in glove with HMRC. There is now a financial investigation unit amassed with 50 investigators, and she has stated that she is homing them in on this challenging area of self-employed non-resident parents. I want to see evidence of that, because in some ways it is too little too late for many people who have been through the system.
It really is not good enough. At the moment, there is the invidious situation for many parents of saying, “You go off to HMRC, to their tax hotline, and there will be an investigation of whether it is fraud”. The Minister needs to reassure me that her investigators will bridge the gap regarding something that is not technically fraudulent but is seriously and scandalously avoiding liabilities. But it is almost too late. The system needs to be front-ended not back-ended, with the opportunity of redress. I hope that the review will bring some of that.
We have had the whole debate about national insurance contributions, and we now recognise the larger numbers of people gaining their income through self-employment. The system does not properly cater for the children of traders, company directors or those with financially complex affairs. I pay great tribute to Gingerbread, which gives the example of a haulier who had his tax return assessed for child maintenance liabilities in a year when he had bought a truck. That truck took away pretty much all his liability—the truck was being put before the children. That is a scandal. It is unacceptable. We must have a system in which we are real as to the situation facing parents today and to their different employments. We do not want to prevent people from being self-employed, but there must be fairness. If we are going to have fairness on national insurance we must have it for child maintenance. I look forward to the Government taking advantage of the Matthew Taylor review to get it right before it is too late for many more parents, with the Minister leading the way.
In conclusion, as time is moving on, we need to see how the £20 fee is affecting poorer families. I ask the Minister to do something about that. I want to reiterate the words of my hon. Friend the Member for Eddisbury and to use the parlance of the Prime Minister: we need a child maintenance system that works for everyone, not just the privileged few.
I was going to say, “You have become young, Mr Bone”, but we have someone else in the Chair. It is an honour to serve under your chairmanship, Mr Paisley. I thank my hon. Friend Marion Fellows for securing this important debate. Like those of many Members, my office is being inundated with child maintenance cases at the moment.
Antoinette Sandbach gave a detailed speech that focused on avoidance by self-employed non-resident parents and used her experience as a single mum. I think we all agree with her that lone parents are being let down by the system. Jim Shannon stated that it is clear that more cases go wrong than right, and he also mentioned that the Child Maintenance Service seems to pursue those who pay and not those who do not, which is a ludicrous situation. Mr Burrowes stated that there must be justice and equity and ongoing maintenance for parents, with the redress they need. He hopes that the Minister will focus on the areas of concern and that there will be a review of the whole system before it is too late for other parents.
There appear to be problems not only with the system itself, but with its operation, and I will begin by speaking about policy and then highlight some constituent cases. It is clear from the many cases mentioned by hon. Members today that we are all suffering the same; but the parents are suffering even more, so we need to sort this out.
I will give the Minister an overview of what I see are the problems that need to be addressed. Simply put, it is not only unreasonable to charge single parents to access their right to support, it is utterly deplorable. As we have heard, some of those parents are survivors of domestic abuse, and the Government have not even attempted to make exemptions for them. The system has a real potential to create further distress and it is my position and that of my party that the Government need immediately to remove that obstacle for single parents, to protect all children from poverty, regardless of their family situation.
We need only look at the statistics to understand the logic in our argument. Children who live in single-parent families are almost twice as likely to be at risk of poverty compared with children in coupled families. Brutal cuts because of Tory austerity, combined with the rise in living costs, mean that child maintenance matters even more in protecting children from poverty. With no end in sight to the harsh ideological austerity agenda, and with living costs looking set to rise further due to Brexit, the situation looks set to worsen still. If the UK Government are not prepared to take measures such as scrapping child maintenance charges, they cannot claim to be serious in the slightest about dealing with child poverty.
Let us contrast that with the situation north of the border. The Scottish Government continue to prioritise the rights of children. Scottish National party Ministers are introducing a child poverty Bill that will enshrine in legislation targets to reduce child poverty. While we strive ambitiously forward, I hope that Westminster will not work against us. The Scottish Government do not have powers over the child maintenance service, so my colleagues and I urge the UK Government to follow the SNP’s lead. If they are not prepared to do so, then please, Minister, give us powers over the service and we will do something about it. Vulnerable families and the rights of the child must be protected. The Government cannot shy from their responsibilities; they must take urgent action to address the ongoing problems with the service that we have heard about today.
I agree with what everyone has said about Gingerbread. I support its Maintenance Matters campaign, and believe that the Government should immediately scrap the £20 application fee for single parents on low incomes, get rid of the 4% collection charge and make better provision to protect domestic abuse survivors. The charges are grossly unfair to the collecting parent and, in essence, punish them for the other parent’s non-compliance. The charges also create a barrier to accessing the statutory service for those on low incomes, who are arguably those most in need of support. The Department for Work and Pensions’ own evaluation research has shown that about half of those on direct pay and two fifths of receiving parents with a case closing are on very low incomes. Now, 4% may not sound much, but for someone on a low income it really matters. Ministers should be concerned that a quarter of receiving parents who have moved from a direct pay to a collect and pay arrangement say that losing 4% of their maintenance is difficult to afford.
There seem to be major issues with the internal operations of the service too. Recently, my office has seen a huge spike in the number of cases, and, as we have heard today, so have those of many hon. Members. My constituents are turning to me for help because they just do not know who to turn to. Naturally, I am only too happy to help, but I am dismayed that they are having a difficult and frustrating time dealing with the agency directly. A huge part of the problem is that when they call, they are speaking to a different adviser every time who could be in any of the different call centres in different locations across the UK. We are repeatedly told that people receive conflicting information and advice depending on who they speak to.
The service my office has been receiving has declined. On two occasions, I have had to escalate cases out of sheer frustration. It would be expected that my staff would receive the appropriate level of service by ringing the MP hotline, but that has not been the case. We are also not given responses by email—we get them only by letter. That slows the entire process down. Why can we not be given summary responses, confirming what has just been discussed and disclosed by telephone?
I have one constituent case that has gone on for about 18 months. Louise came to me as she felt her ex was hiding money from the CMS, and she could not get it to look into things further. After we got involved, it agreed to escalate the case to the financial investigations unit. Initially she was advised that the timescale might be six months. Then it went to a year, and so on. Parents and MPs’ offices understand that the work is sensitive and secretive, but many parents are just left feeling that nothing is happening. Meanwhile, they are left to struggle on, still not receiving a maintenance payment. Regular contact from the caseworker is essential, even if it is only to say, “No update.” Ultimately, people want to know that they have not been forgotten. The service I received in Louise’s case was appalling. My office must have called about 20 times for an update and never received a call back until we escalated it to a senior level.
Two separate constituents have intimated that the CMS has tried to push the collect and pay method when both parents have been happy with direct pay. Are advisers being instructed to do that so that the Department can make money from collection fees?
Another constituent, John, came to me after receiving a letter about arrears on his account. The arrears were extortionate, as were the proposed monthly payments. Once I got involved, my office asked for a full breakdown of the account, as John disputed the arrears. We received the wrong information from the CMS in a telephone call and were told the arrears were approximately £700. My caseworker called the constituent to tell him and within five minutes of hanging up the phone, we received a further call from the CMS with a correction that added thousands of pounds to the figure. Understandably, I was angered by that and asked for a full written breakdown. That took approximately six weeks to arrive. The case is still ongoing, moving at a glacial pace due to the Child Maintenance Service. Does that sound like an efficiently run service?
It is clear that the system is broken. I think the rise we are seeing in the number of cases is only the tip of the iceberg. When my office and my constituents do not get the service they should, it has a major impact on everyone, especially the children. The Minister simply must act to protect them and to stop the suffering of my and other Members’ constituents.
It is a pleasure to serve under your chairmanship, Mr Paisley. I pay tribute to Marion Fellows for securing this important debate. It is right that parents who are separated or divorced fulfil their obligations to their children and provide financial support. As the hon. Lady mentioned in her opening speech, child maintenance is financial support for a child’s everyday living costs paid by one parent to another once they have separated. It is a vital source of income for separated families.
The Child Maintenance Service is meant to work by assessing a paying parent’s ability to pay, calculating the amount due and, if necessary, collecting and enforcing payment. However, the system has a number of failings—they have been outlined clearly today—that are forcing more and more children into poverty. Gingerbread, which supports single-parent families, maintains that the Government’s one-size-fits-all approach is placing support for children from separated families at real risk. There is real concern that the CMS, which was brought into effect in 2012, prioritises administrative convenience over the interests of children.
Three charges were introduced: a £20 application fee, enforcement charges for non-payment, and a collect and pay fee for those who ask the service to administer the payments. That is putting off parents who cannot afford the fee from claiming the financial support that their children are entitled to. Under collect and pay, parents must hand over 20% on top of their usual child maintenance amount—we have heard enough about that already this morning. The unfair charges will disproportionately impact survivors of domestic abuse who are unable to have a family-based arrangement and feel that they have no option but to use the service, as they are too frightened to have a direct link to their abuser.
I echo the concerns of previous speakers. Antoinette Sandbach made an excellent contribution using her personal and professional experience. She clearly outlined many of the problems. The charges are a cruel and callous tax on child support. Ultimately, it is the children who will lose out on money intended to support them. Crucially, the application fee can be waived for domestic violence victims—around a third of applicants are given the exemption—but no such exemption exists for the collection service.
It is becoming increasingly clear that the CMS is yet to deliver the modern, fit-for-purpose service intended by the transition from the Child Support Agency system. That system was replaced by the CMS because it was riddled with failings, such as mistakes being made during the assessment process and poor performance. However, the CMS is performing just as poorly, due in part to poor case management and the lack of information and training for staff supplying the service and the lack of information for parents. Those things continue to hamper the CMS’s performance.
Parents on the previous child maintenance schemes are only being invited by the Government to apply to the 2012 scheme—transfer is not automatic. Can the Minister explain why the transfer is not automatic? Recent figures suggest a backlog of £4 billion in uncollected child maintenance payments. Does she agree that that is completely unacceptable? I am sure she does. Can she outline what steps the Government are taking to deal with the backlog?
The money is owed by non-resident parents and has built up over 23 years. Figures show that some 1.2 million resident parents are owed child maintenance. The vast majority of unpaid child maintenance money was accumulated under the CSA scheme, but a further £93 million has already built up under the new CMS system. The Government have failed to increase the incentive for non-resident parents to take responsibility for their children, reducing their children’s incomes as a consequence. Will the Minister outline how exactly the Government are actively pursuing unpaid child maintenance? Will they provide compensation to the families who have been left waiting for their unpaid maintenance?
The National Audit Office said that as of September 2016, there were more than 1.1 million cases of arrears. Although the majority related to the CSA scheme, more than 96,000 were from the new CMS scheme. Since the introduction of the new scheme, the NAO has said that the Department had reduced the number of enforcement actions it is taking. The Government have stated that they are offering parents a fresh start by suggesting that they write off debts to which their children are legally entitled. These are some of the poorest children in society, suffering from incompetence and cuts in enforcement workers and enforcement work. Why do the Government not restore staffing levels, step up enforcement and ensure that the new Child Maintenance Service is obliged to collect outstanding debts?
Child maintenance can make a huge practical difference for single parents. It can help pay fuel bills, buy clothes for children or fund school trips. It can put food in their mouths and clothes on their backs. For particularly financially vulnerable families, including single-parent families on benefits, it can also be the difference between children growing up in poverty or not. The risk of poverty for children in single-parent households is nearly twice that for children in two-parent households. That is particularly important considering that under this Government, 4 million of our children in the UK now live in poverty. Child maintenance alone lifts a fifth of low-income single-parent families out of poverty. When social security is being cut and child poverty is predicted to dramatically increase, it is more important than ever that children do not miss out on such vital financial support. Can the Minister please outline what steps the Government are taking to tackle the increasing levels of child poverty?
One in four families in Britain is a single-parent family, and 1.5 million families rely on Government-run schemes to ensure they get the right child maintenance payments. When child maintenance goes unpaid by a parent, it is our children who lose out. Increasing the barriers to statutory support is an ill-advised move if the Government intend for more children to benefit from maintenance arrangements. I urge the Government to do more to make sure that vulnerable families and children do not lose out from the changes, but benefit from them.
It is a pleasure to serve under your chairmanship, Mr Paisley. I congratulate Marion Fellows on securing this important debate. She is certainly committed to this issue. I thank her for the work that she has done in raising the profile of the Child Maintenance Service and for her contribution this morning. I also thank Members of all parties. It struck me this morning that this issue transcends party lines. We have heard from the three main parties in Westminster—
And from my friends in Northern Ireland. My hon. Friend Mr Burrowes raised the question of whether I felt the heat of this issue. I can assure him on this beautiful spring day that I certainly do feel the heat. Members have made me feel it this morning, but, much more importantly, I feel the heat of this issue every single time I open an email from a parent with care who is not receiving the correct amount of maintenance. I also feel it when I receive emails from non-resident parents who raise concerns about the amount they have to contribute and whether arrears that have built up are indeed the correct figure. So yes, I feel the heat. I also concur with what I think every single Member has said this morning: our first thought should be for the children. It is not a question of non-resident parents and parents with care. Their battles, to be frank, are not of interest to me compared with what we feel for the children who need support and maintenance from both parents.
I commented at a Select Committee last year when I was a new Minister—it seems a long time ago—that I wanted to hear about cases, because that helps me to point out to CMS officials where there have been failings and where we could do better. That matters to me, because it matters that maintenance flows to children in as many cases as possible. I said it at that Select Committee and I will repeat it today: I welcome receiving emails from parents with care and from non-resident parents because I need to know—although given this morning’s news, I do not know for how much longer I need to know.
I want to be clear that the responsibility for ensuring that child maintenance is paid on time and in full lies with paying parents. Parents who think they have got away with not paying their maintenance as their children grow up are not cheating the system; they are cheating their own children. The hon. Member for Motherwell and Wishaw spoke of having to think about what she left out when she composed her contribution this morning. I wake up thinking of the children who are not receiving the correct amount of maintenance. The words of my hon. Friend the Member for Enfield, Southgate about a truck being more important than paying maintenance to children will ring in my ears.
The DWP is currently delivering a comprehensive package of reforms to the system, which are intended to encourage and support parents to take responsibility for paying for their children’s upbringing. Where parents do not meet their responsibilities, the statutory scheme is there to enforce payments.
Hon. Members have rightly mentioned this morning that under the old system the Child Support Agency did not provide the right support to parents and was expensive to run. We know—Members have acknowledged this—that the bulk of arrears referred to accrued under the former CSA. The new system run by the Child Maintenance Service is designed to specifically address some of the shortcomings of the CSA. We have learnt from mistakes of the past. Where the previous system often drove a wedge between parents, the new system is designed to encourage collaboration at every stage. Evidence shows that parental collaboration has a direct positive impact on children’s outcomes such as health, emotional wellbeing and academic attainment. We know that a constructive inter-parental relationship, whether parents are together or separated, will improve outcomes for children.
The new child maintenance options service acts as a gateway to the scheme, ensuring that parents are given the information and support they need to make an arrangement that is right for them, whether that is a family-based arrangement or a statutory one. Our agents receive specialist training to help them to deal sensitively with clients, and tailored support is delivered via phone, live webchat and email. Child maintenance options has helped a quarter of the clients who contacted them to set up family-based arrangements, which we know are better for children in the long term. The number of parents who have made an effective arrangement following contact with the service increased in the first two quarters of 2016, from 82% to 87%.
We know that maintenance arrangements, while important, are one of the many issues that parents face when they separate, so our agents can also signpost parents to a wide range of organisations that can provide specialist support and advice on the issues they may need help with in their relationships.
The charges, which we have heard about this morning, were introduced in 2014 to provide a further incentive for parents to collaborate, and we know that collaboration works in the best interests of the children. Although the service is primarily funded by the taxpayer, the charges contribute a small amount, helping to offset some of the costs associated with providing the service—it is a small amount, in the region of 10%. All the measures are designed to encourage the parents who can to make their own family-based arrangements. It is perhaps inevitable that the families who end up in the statutory scheme will be the ones for whom that is most difficult.
It is important to reflect on that point. Parents who can collaborate do. Those who are committed to working together seldom come within the orbit of the CMS. It therefore follows that the parents with whom we do have contact are the ones who are most likely to have conflict and difficulties. It is true that, as Jim Shannon said, family-based arrangements are the ideal solution and provide the best outcomes. We do not want parents to have to come within a statutory scheme. However, we acknowledge that that is not always possible.
We continue to use all the tools at our disposal to maintain compliance and recover arrears, but it is inevitable that some arrears will accrue as some parents go to great lengths to avoid their responsibilities. At the end of last year, I visited our CMS centre in Hastings and spoke to both the enforcement team and the financial investigation unit. I was very impressed by their professionalism and dedication, but I was also struck by how difficult their job is. Perhaps it is inevitable in a buoyant employment market that non-resident parents find it easier to change job than when the economy is not so good.
We have heard from various hon. Members that one of the significant problems lies with the self-employed and company directors. It is there that we have the biggest challenges. Both the financial investigation unit and the enforcement teams are determined to do what they can, using the powers already available to them. We can at present make deductions from single-held bank accounts, but not from joint accounts. We are looking at how we can best use our powers to include joint bank accounts. I am very conscious that some non-resident parents hide assets and income within the bank accounts of other family members. We desperately need to address such abuses, which will form part of our arrears strategy, which we will publish later in the spring[Official Report,
I promised the hon. Member for Motherwell and Wishaw that I would leave her some time to conclude. I am conscious that I have been short of time, but I have a mass of information that I would like the opportunity to share. My parting shot is this: if we are to have an arrears strategy and an enforcement strategy that really works, we need to be creative and determined to do it. My door is always open to Members who wish to come forward with new and innovative ideas as to how we can best make parents accept responsibility for their children.
Will the Minister please send her notes? In the short time she may have left, will she send the stuff that she was unable to share with us, because we all want to know? None of us here can say that we will be here after the next election, but the issue will not go away. It needs to be addressed.
Question put and agreed to.
That this House
has considered the Child Maintenance Service.