Child Maintenance Service — [Sir Edward Leigh in the Chair]

Part of the debate – in Westminster Hall at 3:47 pm on 23rd July 2019.

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Photo of Will Quince Will Quince The Parliamentary Under-Secretary of State for Work and Pensions 3:47 pm, 23rd July 2019

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 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 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 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.

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 Paul Masterton and the hon. Member for Ellesmere Port and Neston—