The Parliamentary Under-Secretary of State for Work and Pensions (Guy Opperman)
I congratulate the hon. Member for Lanark and Hamilton East (Angela Crawley) on securing the debate. There was a debate on the subject in April, but this is the first debate that the hon. Lady has been able to secure. I thank the hon. Member for Central Ayrshire (Dr Whitford) for her contribution. Let me deal with that at the outset. The Minister with responsibility for the policy would very much like to know about any specifics of what is clearly a very regrettable story of illness.
Dr Whitford
I had a meeting with the appropriate Minister earlier this week, and it has been found that the person who should pay has money to pay, but if that had not been the case, the response would have been “another 15 years”, which seems inhuman to me.
Guy Opperman
I am very pleased that my colleague the Under-Secretary of State for Work and Pensions, my hon. Friend the Member for Gosport (Caroline Dinenage), has met the hon. Lady and has the matter in hand. I am sure that she will be addressing both the individual case and the long-term issue of assessments made on that basis. I should pass on her apologies. I am not the responsible policy Minister, but my hon. Friend has been answering a three-hour debate in Westminster Hall this afternoon on the support that the Department for Work and Pensions offers care leavers, so asked me to step in on her behalf.
I also apologise if the letter in relation to the constituent identified with the self-employed issue had not reached the hon. Lady. My understanding is that it was sent on Tuesday. I was able to hand-deliver it today, but I offer my apologies if it had not made it into the hon. Lady’s hands prior to that. Clearly, there are answers to some of the points in relation to the self-employed in the letter, but if, upon sober and long-term perusal of that letter, the hon. Lady wishes to respond, I am sure that the correspondence can be continued.
I will briefly set out the Government’s approach to the Child Maintenance Service. The Department has since 2012 been delivering a comprehensive package of reforms of the child maintenance system, which is intended to support parents to take responsibility for paying for their children’s upbringing. For many years, the old system, under the Child Support Agency, did not provide the right support to parents. That is why the Government are closing cases under the Child Support Agency and giving parents the opportunity to apply to the Child Maintenance Service.
The new system run by the Child Maintenance Service is designed to encourage collaboration between parents, which we know has a direct positive impact on child outcomes, including health, emotional wellbeing and academic attainment. Parents can obtain free advice and support from the Child Maintenance Options service on making an arrangement that is right for them, whether that is a family-based arrangement or a statutory one.
More than a quarter of those who have contacted Child Maintenance Options have a family-based arrangement, and 82% of these arrangements are effective. The charges introduced in 2014 provide a further incentive for parents to consider making a family-based arrangement. The total income from fees and charges is less than 10% of the costs of providing the service, which remains heavily subsidised by the taxpayer. The statutory scheme is available for those who are unable to set up a family-based arrangement. These parents are therefore most likely to have conflict and difficulties meeting their child maintenance responsibilities.
There is a range of strong enforcement powers, and the Government are ramping up the usage of them. We aim to take immediate action to re-establish compliance wherever a parent fails to pay what they owe. In June 2017 the Government instigated 550 more enforcement actions than in June 2016, and the intake of cases to civil enforcement increased by 670 on the previous year.
Last month, we announced plans for new legislation to allow deductions to be made from jointly held bank accounts, closing a loophole that allowed a small minority of parents to cheat their way out of paying towards their children. Our efforts on compliance and debt recovery are firmly focused on helping today’s children. We have continued to uphold this principle since it was set out in the arrears and compliance strategy in January 2013.
We have also been frank about the shortcomings of the previous Child Support Agency schemes, which included the build-up of debt through unpaid maintenance payments, and the Department is currently working on a new strategy that will maintain the principle of focusing our efforts on collecting money for today’s children while looking at creative and innovative ways to maximise compliance in the system.
This new system introduced simplified calculations and increased automation, allowing cases to be processed with a higher level of accuracy than under previous schemes. Additionally, survey data published in December 2016 showed that 91% of parents receiving payments through a direct pay arrangement were receiving all or most of the maintenance due to them. The most recent statistics show that 85% of new applications were cleared within 12 weeks and 81% of change of circumstances actions on live cases were cleared within 28 days, and the level of complaints received remains extremely low, at less than 0.1 % of the case load. No one is complacent, but in the grand scheme of things, 0.1% is relatively low. The caseload on the Child Maintenance Service is still growing, however, and we are taking every opportunity to maintain compliance and deal with non-compliance before enforcement action is needed. We are continuing to increase the operational resources allocated to enforcement, with 290 full-time enforcement case managers in place as of September 2017.
Turning to fees and charges, the one-off £20 application fee for the Child Maintenance Service is intended to prompt parents to consider whether they can make a family-based arrangement. We want to help parents to reduce levels of conflict after a separation and work together more effectively, as we know that this is in the best interests of their children. The application fee is waived in three cases: for the most vulnerable clients; for applicants who are under 19 years of age; and for those who have been victims of domestic abuse. For parents who need to use the statutory scheme, there are no further charges for using the direct pay service, where parents manage payments between themselves. I will go into the direct pay service in a bit more detail later.
Collection charges apply only to the collect and pay service and are intended to encourage both parents to collaborate. The 4% charge for receiving parents ensures that both parents have an incentive to work together and to try direct pay. The collection charge for the receiving parent is deducted only when maintenance is paid, so they do not owe money to the Child Maintenance Service if maintenance is not paid. In addition, charges make a modest contribution to the cost of running an expensive service, which remains heavily subsidised by the taxpayer.
In relation to domestic abuse cases, the Department is committed to ensuring that victims of domestic abuse get the support they need to use the Child Maintenance Service. I have explained about the waiver of the £20 application fee, and the fact that the more expensive enforcement charges are levied on the paying parent. Where a direct pay arrangement is in place, no fees are required. Research from the 30-month review published in December 2016 showed that receiving parents who had experienced domestic abuse were just as likely to have an effective direct pay arrangement as other receiving parents. We are supporting those parents to use the direct pay service safely without having contact with an ex-partner by: facilitating the exchange of bank details; ensuring that personal information is not shared; and providing information about setting up bank accounts with a centralised—rather than personalised—sort code which does not allow parents to be traced. I have very much taken on board the hon. Lady’s suggestion about bank transfer messages, and I will ensure that the Minister looks into that and gets back to her, in respect of that matter and any others that I have not addressed in the limited time available today.
In addition, we have worked with stakeholders to develop a new training package to ensure that all caseworkers are able to understand and recognise domestic abuse and respond appropriately to clients who are victims of abuse. This training has been piloted and is being rolled out nationally from September 2017. The Government are genuinely committed to continued evaluation of the effects of the child maintenance reforms, including the impact of charging. We will continue to consider our current position in the light of any further evidence that our evaluations produce.
I want to touch briefly on the 30-month review, which included the report on the impact of charging that was published in August 2017. The review consists of a series of independently conducted and internal research reports, official statistics and administrative data. The survey data showed that most direct pay arrangements were in force 13 months after the original direct pay calculation, and that 91% of parents who were receiving payments through a direct pay arrangement were receiving all or most of the maintenance due to them. I accept the need for continued evaluation of the impact of charging as we complete the Child Support Agency case closure process.
If there are any specifics that I have not addressed, I will ensure that the Minister who holds the portfolio responds to them. I want to make it clear that there are no targets to keep people from moving from collect and pay. I reassure the hon. Lady that the Government are absolutely committed to promoting parental responsibility and collaboration and to providing an efficient, effective statutory scheme to be used as a last resort. Our priorities remain ensuring that as many families as possible have effective arrangements in place that are appropriate for their circumstances and taking action to maintain compliance in the statutory scheme, so that today’s children can benefit from maintenance payments.
Question put and agreed to.