Child Maintenance Service

Peter Grant Excerpts

Tuesday 27th February 2024 Westminster Hall

[Sir Stephen Timms (East Ham) (Lab)]

I beg to move,

That this House has considered the Child Maintenance Service.

I am delighted to serve under your chairmanship, Sir Charles.

I am grateful to the Backbench Business Committee for allocating this debate, prompted by the Select Committee on Work and Pensions inquiry on the Child Maintenance Service. We published our report last April, and the Government their response in July. The Child Maintenance Service, which I shall refer to as the CMS, was introduced in 2012 to replace the Child Support Agency.

Child maintenance is paid in three ways: non-statutory, family-based arrangements, in which the CMS plays no part; direct pay, where the CMS calculates the amount due and draws up a schedule, but the parents themselves arrange payment; and, thirdly, collect and pay, where the CMS calculates the maintenance owed, collects it from the paying parent and transfers it to the receiving parent. For direct pay, there was, until yesterday I think, a £20 application fee, waived for under-19s and in cases of domestic abuse. For collect and pay, the paying parent pays an extra 20% of the maintenance owed and the receiving parent receives just 96% of what they would have under direct pay.

The Department for Work and Pensions reported 2.5 million separated families in Great Britain in March 2022, with 4 million children in those families. The National Audit Office says that about half receive at least some child maintenance, and one in three has an arrangement that is satisfied in full. Of those with any arrangement, around 500,000 were on direct pay or collect and pay, but nearly 1 million had a family-based, non-statutory arrangement. The National Audit Office made the point that take up of the CMS has been lower than expected, for reasons that the Department does not know, and that setting up the CMS has not increased the number of effective child maintenance arrangements.

Our report made recommendations about the calculation of child maintenance. The maintenance assessed for some parents—I think this is now widely acknowledged—is unaffordable in some cases, causing serious hardship. The bands for calculating maintenance are in primary legislation, so it is hard to change them. Christine Davies, who is honorary senior lecturer in mathematics at Royal Holloway, University of London, told us that because inflation over the past quarter of a century has not been allowed for, someone earning £15,000 today should, according to the scheme’s original intentions, be paying £364 per year in maintenance, but is actually required to pay almost 10 times that or £3,500 per year.

The Callan review called for the formula to include both parents’ income, instead of only the paying parent’s. The Government rejected that, but said they would explore the possibility in their review of the calculation formula. The Government have committed—I welcome this—to a “fundamental review” of the child maintenance calculation. The Minister in the Lords told us in correspondence that the review would be wide ranging and take some time. When the Minister winds up, will he tell us whether we can expect changes before the election?

This is urgent. We have heard of paying parents taking their own lives, because the demands being made of them are simply impossible for them to meet. I was in touch yesterday with Mr Ian Briggs, whose son, Gavin Briggs, took his own life. Mr Ian Briggs told me that on 26 June 2020, the CMS sent his son a letter telling him he owed nearly £16,000. His son took his life a few days after that on 1 July, and on that day his account showed less than £4,000 in arrears. Mr Briggs asks:

“How can this be possible?”

He has had no answer to that question.

The CMS was established to deliver more effective maintenance arrangements, but there is little data on how many direct pay arrangements are effective. We do not know how much child maintenance is not being paid. We asked DWP to monitor the effectiveness of the arrangements proactively—for example, with yearly surveys of parents with direct pay arrangements—but the Government said no to that. My question to the Minister is: what are the Government’s plans for monitoring that for research on the subject? Does the Department think that it understands the effectiveness of direct pay? If so, what evidence is it using? We do not think that it does. How many direct pay arrangements switched to collect and pay or family-based arrangements in the first 12 months? Does the Department know why that is happening?

The Committee also raised concerns about collect and pay. About half of paying parents with those arrangements do not pay or pay less than they should. We heard that enforcement is slow and often ineffective, so we welcomed the Child Support (Enforcement) Act 2023. That was taken through the House by the hon. Member for Stroud (Siobhan Baillie), who I am delighted is in her place this morning and who makes a distinguished contribution to the work of the Committee. The Act aims to speed up enforcement by allowing CMS to make administrative liability orders when a paying parent has not paid and deduction of earnings is not appropriate. Previously, CMS needed to apply to a court for a liability order, taking up to 22 weeks. The secondary legislation on that will specify the notice that CMS must give to the paying parent before making an order—seven days for those living in the UK and 28 days for those overseas—and set out the process for paying parents who want to challenge a liability order. The Government published their response to the consultation on that two weeks ago, on 12 February. Can the Minister tell us when the secondary legislation will be introduced?

Another set of recommendations in our report was about domestic abuse. In October 2021, the Government asked Dr Samantha Callan, who I already mentioned briefly, to conduct an independent review of CMS processes and procedures for supporting parents subject to domestic abuse. Her report was published in January 2023, and the Government accepted eight of its 10 recommendations. On the first recommendation, the Child Support Collection (Domestic Abuse) Act 2023 received Royal Assent last July; I am pleased to see the hon. Member for Hastings and Rye (Sally-Ann Hart) in her place this morning as well. Where there is evidence of domestic abuse, a parent can set up collect and pay at the start instead of first trying direct pay, so the two parents need not be in contact. Last September, a written answer said that bringing the Act into force would require consultation and secondary legislation. Can the Minister tell us what the timetable is for those?

Our report asked for a timetable for all the work arising from the Callan review. One strand of that is a pilot of single, named caseworkers for complex domestic abuse cases. In the written answer that I referred to earlier, the Minister said that the Department had started a pilot and it would be evaluated. Can the Minister tell us when that will be and how the pilots went?

I am worried about that, because yesterday I spoke to Rachel Parkin, who gave evidence to the Committee’s inquiry. She is an abuse victim. The former CMS chief executive apologised to Rachel for how her case was handled, assured her that she would be on collect and pay permanently and that she would be in the pilot of a single caseworker. She had a single caseworker for a period of eight months. Her calls in that period were automatically routed to the right caseworker—it worked very well—and she made real headway in resolving long-standing difficulties, but now, without any explanation, she is being put back on direct pay. She has simply been told by the service that it is not bound by promises made to her by a former chief executive. She will be back to random caseworkers and the debilitating need to go through her story every time, which so many people talked to us about during our inquiry.

[Peter Grant (Glenrothes) (SNP)]

I am reluctant to interrupt the right hon. Member in full flow, but while he is talking about the failures to give adequate support to people who report that they have been living in an abusive relationship, may I ask whether he was as concerned as I was to realise how completely unaware CMS senior management seem to be that very often the abuse or controlling behaviour starts only after the relationship has ended, and that until about a year ago that was something that just did not seem to have occurred to anybody at the CMS?

[Sir Stephen Timms]

The hon. Member makes a very important point, and I think he is right. I very much welcome his work and that of his colleagues on the Public Accounts Committee in drawing attention to a number of these problems.

I ask the Minister whether the idea of a single caseworker has now been abandoned. Is a domestic abuse team still in place or has that whole initiative, which the CMS talked to the Public Accounts Committee about last year, I think, now been given up? Why is it that someone such as Rachel Parkin has gone back to the arrangements that she was promised she would not?

In our report, we also raised concerns about paying parents who fraudulently attempt to reduce their maintenance assessment and about the fact that the Department does not estimate levels of fraud and error. The Public Accounts Committee, in its 2022 report— two years ago—said that the Department had

“not taken responsibility for detecting child maintenance fraud”

and had shifted the burden to receiving parents, who were expected to challenge false assessments. The Committee pointed out that a paying parent who was notified of being investigated for understating their income would no doubt guess that their ex-partner had reported them, and as a result, the Committee warned, many receiving parents would not report. I think that the Committee was right to make that point. In response, the Department said that it used risk profiling and threat scanning to target fraud in the child maintenance system and that it already had proportionate and cost-effective controls. Can the Minister tell us what exactly risk profiling and threat scanning are in practice?

We recommended that there should be specialist caseworkers for cases in which the paying parent’s income is from self-employment. In correspondence, the Minister in the other place who has responsibility for this part of the Department’s work, Lord Younger, pushed back on that, on the grounds of “funding implications”. However, the Department has said that it will legislate to ensure that unearned income, such as savings, investments, dividends and property income, is taken into account automatically when maintenance is calculated, to make it more difficult for

“the small number of parents who avoid paying the correct amount.”

Can this Minister tell us when that legislation will be introduced?

The Government have just introduced, as I mentioned earlier, secondary legislation to remove the £20 fee for all parents who apply for a statutory maintenance arrangement. I would be grateful if the Minister could confirm that that took effect yesterday as planned. The same secondary legislation also introduced new powers for the Secretary of State to write off maintenance arrears under £7 in certain circumstances.

Finally, I want to make this point. There are, as all of us in the House well know, unending complaints about very poor customer service from the CMS. It is very difficult to get through; calls go unanswered. There are incorrect assessments, and people are having to tell their story again from scratch on every call. The service does have a very tough job, against a backdrop of pain and conflict; it is very difficult to provide a good service in that situation, but can the Minister offer us any prospect that the improvements needed will be made?

--- Later in debate ---

[Peter Grant (Glenrothes) (SNP)]

Thank you very much, Sir Charles, for calling me to speak; I am grateful for the chance to begin summing up in this debate.

First, I commend the right hon. Member for East Ham (Sir Stephen Timms), the Chair of the Select Committee, for securing this debate. I thank him and other Members of that Committee for giving me the chance to attend, as a guest, some of the hearings when they have had the Child Maintenance Service before them. Also, I want to give the right hon. Gentleman more than the usual token 20 or 30 seconds at the end of the debate to sum up, so I will try to keep within the 10 minutes I have; those who know me will know what a struggle that will be, but I will do my best.

I think this is the third time I have participated in a Westminster Hall debate on the Child Maintenance Service and I am again struck today by the fact that there has been very little disagreement in the Chamber; everybody accepts that the CMS is not working, that the time for talking about changing it is long past and that we need to start seriously changing it.

It was very noticeable in this debate today that the overwhelming majority of contributions have come from the Minister’s own party, with two of them from people who have been there with ministerial responsibility: the right hon. Members for Romsey and Southampton North (Caroline Nokes) and for Suffolk Coastal (Dr Coffey).

Incidentally, while the right hon. Member for Romsey and Southampton North was speaking, I made a quick check and found that, since she moved from the Department for Work and Pensions in 2017, we are now on our fifth Minister with responsibility for child maintenance. Maybe that partly explains why it has taken so long to get anywhere. There are obviously reasons why there have been so many Cabinet changes in that time, but I think the Child Maintenance Service is far too important to be one of the things that gets added to the portfolio of someone who stays in post for six months before they get moved on, because it is complex and, if a Minister is in post for only a year, they will not get the time to get on top of the service and drive forward significant changes.

As I have said, this is a system that is simply not fit for purpose. I do not think that we can beat around the bush and look for minor changes; we need a complete overhaul and review, starting from a blank sheet of paper and redesigning the whole thing.

To illustrate that point, I will ask a question. If somebody came in who did not know what the Child Maintenance Service was for and just looked at what it did, would they ever be able to work out what its purpose is? If they did, I will guarantee that they would not conclude that its main purpose was to make sure that no child had to live in poverty simply because of the family circumstances that their parents have found themselves in. If we accept that aim as a valid purpose for the Child Maintenance Service, we begin to understand just how far away from hitting that target we are just now.

Depending on what figures people believe, the United Kingdom is probably the fifth or sixth wealthiest economy in the world, yet 4.2 million children in the UK live in poverty, according to the Child Poverty Action Group. Again, we can argue about the exact number of children in poverty, but we cannot argue that the number of children living in poverty in an economy with so much money spilling around in some places is simply not acceptable. By fixing the Child Maintenance Service, we can certainly reduce the number of children living in poverty, and in such a way that the people who pay for it are the people who should have been paying for it all along. The parents have had the children, but for one reason or another are simply not meeting their responsibilities to pay financial support for their upbringing.

One of the previous speakers—the hon. Member for Amber Valley (Nigel Mills), I think—talked about the fact that debt owed to the Child Maintenance Service is not seen as important or as such a high priority for collection as debt owed to the Government. Again, that is simply wrong. Why do we not have a system in which the DWP pays all the child maintenance due, and then the DWP chases the people who are fiddling the figures or trying to hide and not pay the money? I can guarantee that if the DWP were chasing an absent parent for the money, they would not be living on a fancy yacht in the Bahamas or in the Mediterranean, as mentioned by the hon. Member for Strangford (Jim Shannon). If they were doing that, but the money was owed to the Government, they certainly would not be posting on Facebook to boast about how much money they had or how much they were able to hide.

[Dr Mullan]

I do not know whether the hon. Gentleman was able to listen to my points about moral hazard, but does he agree that his proposal for the taxpayer to pick up directly the payments of absent parents who are not paying would double the impact of saying, “You don’t have responsibility. The taxpayer will step in directly and pay it for you.”?

[Peter Grant]

If the hon. Gentleman had listened to what I was saying, he would realise that that is exactly what I am not saying. I am saying that the full force of collection and enforcement that is in the hands of His Majesty’s Revenue and Customs or DWP should be brought to bear not only on those who refuse to pay what they are assessed as being due to pay, but on those who are lying, committing fraud and stealing from their own children. Ultimately, they would still be stealing from their own children, but HMRC has powers to enforce in a way that a single parent does not have. That is what I am saying. It is not a simple solution, but I think it would make a significant difference. As has been mentioned, the DWP’s own figures reckon that since the Child Maintenance Service was set up, £590 million of debt has not been collected. That does not include the undetected fraud or the under-declaration of income, assets and so on.

Something else that I always find concerning about the CMS is that it does not seem to have any curiosity about a parent who fights and fights to get a settlement but then just disappears off the system and gives up. In Child Maintenance Service cases I have dealt with, I have found that probably the single biggest outcome is that the parent with responsibility for bringing up the children simply gives up in frustration, deciding that it is better for them just to get on with their life and to struggle through—very often in or near poverty—because they can no longer cope with the stress of dealing with the Child Maintenance Service. That is a shocking indictment of any Government service, in particular one whose only point, whose only reason to exist, is to make lives better for vulnerable young children.

I have often noticed that, when speaking to parents, the paying partner always talks about how much they are having to pay to their ex-partner. They often do not see it as paying for the upkeep of their children. Something about the language we use here, we need to look at. Something raised by one of my constituents at a roundtable held by Fife Gingerbread, which I hope the Department has picked up and started to act on, is that CMS letters get addressed to the parent—the parent’s name is on it—and it does not say “To the parent of” with the name of the child, which would be a simple way of making it clear that this is about the children.

There will often be bad will between two partners who have split up. Whether they split up amicably or acrimoniously, once they start disagreeing about money, it is likely to become quite a bit more acrimonious. The children, however, should never be made to suffer as a result.

I mentioned Fife Gingerbread. I again need to commend the outstanding work that it has done, and not just within the boundaries of Fife. It is one of the organisations that has influenced the way in which the Child Maintenance Service now operates. On the scrapping of the £20 fee for being able to claim child maintenance, for example, I am convinced that Fife Gingerbread is one of the organisations that can claim part of the credit for having achieved that, as well as a number of other changes that we are seeing.

We have had reference to the fact that IT systems are not fit for purpose. This is the 21st century—we are almost a quarter of the way into the century—and we are using systems that are 40 or 50 years out of date. The Chair of the Select Committee, the right hon. Member for East Ham, and other members of the Work and Pensions Committee and of the Public Accounts Committee will remember only too well what happened to the payment of state pensions when the Department carried on using systems that were no longer fit for purpose. We could be heading for an equally massive injustice in the assessment, payment and collection of child maintenance if we do not get those systems sorted out. As the hon. Member for Amber Valley said, it should not take three or four months for somebody to be told why the assessment is the number that it is. In some of the queries to HMRC, when people are assessed on self-assessment, they could go online, and sitting in front of them would be exactly why HMRC had assessed them for that amount.

The final thing is that one way to reduce the need for child maintenance is for Governments to take other action on children in poverty. This Government could undertake actions that have already been shown to be successful by the Scottish Government. There is the child payment, which has lifted about 50,000 children in Scotland out of poverty; if we do that down here, we are talking about half a million children being lifted out of poverty. Actions taken by the Scottish Government are estimated to reduce the cost of bringing up a child by somewhere in the region of £25,000 to £26,000 during their childhood. Policies similar to those would reduce the demands on child maintenance, reducing the need either for children to live in poverty or for their parents to almost literally come to blows arguing over who should care for their child.

I entirely agree that nobody should feel that they can just leave their children to be the responsibility of someone else. I find it interesting that financial neglect, which is what we are talking about here, is treated differently from any other forms of neglect. If a parent neglects their child in any other way, we do not just stand back and leave the parents to sort it out. If a parent is deliberately neglecting their children financially, they cannot be allowed to get away with it. I do not have confidence that the existing Child Maintenance Service will ever be able to address that, which is why we need to design an entirely new service fit for the 21st century that recognises the wide variety of circumstances that people live in today.

[Sir Charles Walker (in the Chair)]

Thank you, Mr Grant. That was a perfect 10 minutes.

--- Later in debate ---

[Peter Grant]

Clearly, there has been an error at set-up that the calculation needs primary legislation to be updated. Given that it is now 25 years out of date, is it not time to bring forward legislation to change it once and for all, so that future changes can be made through secondary legislation or by other means? There have been examples recently where other DWP payments were uprated through statutory instruments and it did not take nearly as much bureaucracy to get that done. We should be able to do that with the child maintenance system as well.

[Paul Maynard]

The hon. Member makes an interesting point that may risk becoming a digression. I note that the secondary legislation he refers to is regarding automatic uprating of particular indicators. This is a more fundamental change to how the entire structure of child maintenance is conducted, so is perhaps not suited to secondary legislation. We often hear criticism that too much goes through secondary legislation, unscrutinised by this place. As a Member rather than a Minister, I always think that I would rather such a fundamental change be scrutinised properly in the form of a Government Bill. That is an important point.