Child Maintenance Service

Baroness Sherlock Excerpts

Thursday 24th June 2021 Grand Committee

[Baroness Sherlock (Lab) [V]]

My Lords, I remind the Committee that, a long time ago, I was a non-executive director of the Child Maintenance and Enforcement Commission and, even longer ago, chief executive of One Parent Families.

I am grateful to the noble Lord, Lord Famer, for securing this debate, as we rarely get to discuss child maintenance, which is really important. His opening speech began with a history lesson, capped fascinatingly by the noble and learned Lord, Lord Mackay of Clashfern, who reminded us just why we need an effective statutory Child Maintenance Service—a cause he has long championed. The noble Lord, Lord Farmer, also gave us a tour d’horizon of many of the key policy issues relating to child support, with the noble Baroness, Lady Eaton, offering some more in her contribution.

I will focus on more operational questions, but I start by agreeing with the noble Lord, Lord Farmer, that it is important, wherever possible, that both parents should contribute towards the cost of bringing up children after a relationship has broken up. Children are a lifelong responsibility for their parents, and it can be important for them to know that both parents continue to support them. I also agree with the noble Lord, Lord McColl, about the importance of good support for families at every stage.

There is also clear research evidence demonstrating the role that child maintenance can play in helping to lift single parents out of poverty. This is really important, given that we went into the pandemic with 4.3 million children living in families in relative poverty. Given the scarring effect in later life of living in poverty as a child, the stakes are very high.

Ministers often say that work is the best route out of poverty, but working poverty is now at a record level of 17.4%. Interestingly, a recent IPPR report found that the poverty rate for couples with one full-time earner is now 31%. Since single-parent households tend to have just one earner, it is perhaps not surprising that almost half of children living in single-parent households are in poverty. But if a single parent is already working full time, they cannot really make much more money by earning more, so getting maintenance paid in full and on time may be their best chance of lifting their children out of poverty.

Unfortunately, too much maintenance goes unpaid, and it must be said that the Child Maintenance Service has not had a good pandemic. That is not a reflection on the hard-working staff of the CMS. When Covid hit, a large number of staff were redeployed away from the CMS to help process universal credit claims. Can the Minister tell us how many? My noble friend Lady Massey of Darwen was pushing on that as well. I understand the need for more staff processing universal credit claims, but single parents paid the price for that. Victoria Benson, CEO of Gingerbread, said that for much of the pandemic, the CMS was

“running a skeleton service, meaning they are now as a rule not enforcing payment and are allowing paying parents to reduce or withdraw maintenance payment without any proper evidence.”

Single parents are still complaining to Gingerbread that CMS is not enforcing child maintenance owed to them.

I looked up the last official child maintenance statistical report, which covered the last quarter of 2020—it came out on 23 April, so we are due another one any day. It said that the CMS had resumed virtually all areas of service delivery and was now focusing on the recovery and enforcement of outstanding arrears. Can the Minister tell us what the current situation is? Is CMS now operating a full service in all areas? Is it using its full range of enforcement powers? Crucially, are there as many staff now in the CMS as there were before the pandemic? Does it have a plan for tackling those arrears?

My noble friend Lady Massey raised the question of the reduction in the period of time for considering a paying parent’s maintenance liability where their income had changed because of Covid. That was cut from 12 weeks down to two. It protects paying parents but of course hits receiving parents. CMS said it will revert to 12 weeks as soon as possible. Can the Minister say whether that is still in force and, if so, when will it revert?

The statistics show that in the last quarter ending December 2020, of paying parents who pay via collect and pay 50% paid over 90% of their child maintenance—that counts as fully compliant; 22% paid something; and 28% paid nothing at all. Does the Minister think that is acceptable? If not, is there a target to improve it? We need to look at those stats in light of the fact that more people have moved on to benefits; they are more likely to pay child maintenance as it is knocked directly off their benefit payments before they get it. Indeed, 40% of all collect-and-pay cases now involve deductions from benefits, whereas it would normally be more like 21% to 24%. So that is flattering the compliance rates.

What about the amounts? In the quarter to September 2020, the statistics say that £41.1 million was paid through collect and pay. But by the last quarter, when things were allegedly back to normal, that went up only by £1 million. That seems to leave £15.2 million of maintenance uncollected in that quarter alone. That is £15 million that could have been spent on feeding and clothing children.

Since 2012, when the Government created the Child Maintenance Service, £395 million in unpaid maintenance is owed through collect and pay. That is roughly 9% of all the maintenance ever due to be paid since the new service started. The Government closed down the previous service, reformed the system and created what we have now. It is their baby. Are they happy with how it is doing?

That is just those who get into the statutory system. Like my noble friend Lady Massey and the noble and learned Lord, Lord Mackay of Clashfern, I worry about the impact of charging and I would also like to know how much maintenance is being paid through private arrangements.

Finally, a consultation was launched just last Friday on making some changes to CMS. I read that the proposals are to change how unearned income is treated, to enable the writing off of low amounts of debt, to allow CMS notifications to be sent digitally, and some other stuff about who has to provide information. Can the Minister tell us whether all those changes which the consultation is addressing can be made in secondary legislation? Will the DWP analyse the responses to the consultation before it publishes the draft legislation? I know that sounds obvious, but it does not always happen. The NAO is also preparing a report on the CMS. Will the department await the final NAO report before making any changes?

Child maintenance matters to parents and to society but, above all, it matters to children, since, as my noble friend Lady Massey always reminds us, the welfare of the child is paramount. We owe it to our children to have a well-functioning, supportive system of child maintenance in Britain. I look forward to the Minister’s reply.