Public Bodies Bill [HL]

My Lords, the purpose of this amendment is to seek fully to understand and evaluate the rationale for including the Child Maintenance and Enforcement Commission in Schedule 1 and the reason for its conversion announced on 14 October back to an executive agency of the DWP. Noble Lords will be aware that CMEC is a relatively new body—a crown non-departmental public body—created by primary legislation in the Child Maintenance and Other Payments Act just two years ago. It was then the subject of considerable debate. Accepting its demise via the process in this Bill therefore needs considerable justification. CMEC was charged with completing the operational improvement plan and to carry out a fundamental redesign of the child maintenance system. The operational improvement plan was part of a twin-track approach to radically improve the performance of the Child Support Agency. The CSA was established in 1993 to assess, collect and enforce child maintenance payments from non-resident parents. It was set up because the system of collecting maintenance through the courts was perceived as failing to establish fair and consistent awards which were not necessarily kept up to date or indeed enforced. Despite the best efforts of CSA staff, the complicated calculation process, IT failures and inadequate enforcement contributed to poor performance and unacceptable outcomes for children. The CSA struggled to administer the complex rules in the child maintenance system and to handle the difficult and emotional circumstances that often surround parents when child maintenance becomes an issue. It was widely seen as a means of clawing back benefit rather than providing additional resources for children. Reforms in 2000 brought some simplification to the maintenance calculation. The introduction of a child maintenance premium where those in receipt of benefit kept some of the maintenance payments was a positive development. However, the changes still did not deliver the improvements expected. In particular, there were chronic problems with the IT and operational systems, which meant that old scheme cases could not be transferred to the new, simplified system. Again, the result was that too many children did not receive the benefit of maintenance, which led to the approach of a three-year operational improvement plan, and the call for a longer term redesign of the child maintenance system. The latter was the subject of a report commissioned by the noble Lord, Lord Hutton, when he was Secretary of State at the DWP, from Sir David Henshaw. Sir David argued that the system’s failings reflected both policy and operational problems, and recommended a break with the past to create a new start for child maintenance arrangements. CMEC was to be that new start. It was established with the primary statutory objective of maximising the number of effective maintenance arrangements. This was bolstered by subsidiary objectives of encouraging and supporting voluntary maintenance arrangements and the operation of a statutory scheme. CMEC is specifically charged with the promotion of raising awareness among parents of the importance of taking responsibility for and making arrangements for child maintenance. It also has a duty to provide information and guidance to parents for the purpose of helping to secure effective maintenance arrangements. Its role is to seek to ensure that all parents who live apart put in place effective arrangements to maintain their children, whether they do this privately, through the courts, or through the statutory service. This is much different from the old CSA, run directly by the DWP, which had only one function—the statutory maintenance service. The enhanced role with a new focus was considered at the time to be best undertaken by a new body, an NDPB, to be led by a commissioner for child maintenance. For certain very practical reasons, the NDPB was set up as a crown body. It was intended to operate at arm’s length from government and through its commissioning powers to be able to develop a high-quality and efficient service. Its board would be focused entirely on delivering a successful child maintenance system, not distracted at the top from the shared responsibilities which the very senior managers would have as an executive agency of the DWP. The timeline for change was planned to span from the launch of CMEC in October 2008 until 2014, when the new unified child maintenance system is planned to be fully in place. Major steps have already been completed and these include the setting up of the options service, fulfilling the information and guidance obligation for all parents, the removal of the compulsion for parents with care claiming benefits to use the CSA, implementation from April 2010 of a full maintenance disregard, and the deployment of at least some the new debt and enforcement powers. However, CMEC has just completed its first full year of operation, and the forward programme still shows much to do. In fact, 2011 is the year in which the new basis of calculation is due for introduction with a gradual migration of old cases to the new system until in 2014 when there will be a closure of all existing CSA cases and a unified system in place. CMEC's business plan for 2010-11 is clear that the current year will be a critical year for CMEC as it moves to the launch of the new system. The options service has, seemingly, made a good start. In its evidence to the DWP Select Committee, CMEC set out its focus on promoting the service to new and separating lone parents. It records how Jobcentre Plus and HMRC refer parents to the service when they claim relevant benefits and tax credits. There can be little doubt that over the period of the operational improvement plan and since, performance of the CSA has improved despite continuing problems with the CS2 system. Currently, its performance under CMEC is the best it has ever been. The number of children benefiting from statutory maintenance has exceeded 850,000, with more than £1.14 million collected. Uncleared applications, a particular bugbear of the past, have declined by over 90 per cent to under 20,000. Telephony has improved out of all recognition. Running costs have reduced from £600 million to under £500 million a year. Nevertheless, the Select Committee report shows that more remains to be done in terms of collection of arrears and maintenance outcomes. Unlike most of the other bodies included in this schedule, CMEC is not yet in steady state. It is part way through a programme which will finally lead to the clean break recommended by Sir David Henshaw. As the Work and Pensions Select Committee reported, it will be a challenging phase with the continuing problems with the CS2 IT programme, and the operation of three different maintenance systems through to 2014 when it was planned for there to finally be just one simplified statutory system. So in seeking to understand the decision for CMEC to become an agency of the DWP, I should be grateful if the Minister could answer the following questions. First, what are the type of clear policy and decision-making responsibilities which Ministers consider they are precluded from taking at present in respect of child maintenance, which drives this approach? Secondly, is there any basic change in policy for the child maintenance system? Is it still planned to proceed with the new system, starting at 2011, with the gradual migration of the old and current systems? Is it envisaged that this process will be completed before the operation becomes an executive agency? Thirdly, will the full disregard for benefits remain and will this apply also for the purposes of the universal credit? Fourthly, given that CMEC is currently a crown NDPB, what will its changed status as an agency mean for the staff? Fifthly, given that the decision has already been taken for a transfer to an executive agency, is it considered that being run by DWP will bring operational efficiencies not available to CMEC? If so, what are these, and what evidence base is available to support such a conclusion? Sixthly, what analysis has been undertaken of the costs involved in any transfer back to the DWP, including novation of supplier contracts, changes to enforcement notifications, et cetera? Are there any VAT ramifications of a transfer, and how does this differ from transfers from non-crown NDPB's? Seventhly, on what grounds is it considered that CMEC fails all the three tests set out by the Minister for the Cabinet Office in October: does it perform a technical function; do its activities require political impartiality; and does it act independently to establish facts? Eighthly, what is the future for the options service under any changed arrangements? Is it not right that considerable effort has gone into branding this service as being at arm’s length from government? What assessment has been undertaken of how parents would react to this becoming an executive agency of the DWP? Would any different requirements apply in respect of information sharing—say, income details of non-resident parents for the DWP, in contrast to CMEC as an NDPB? Fundamentally, on what basis can we be reassured that the switch to an executive agency will neither disrupt the vital work of getting the new maintenance system up and running as quickly as possible? Moreover, will there continue to be a clear focus on improving child maintenance outcomes as an integral part of the challenge of tackling child poverty? Our anxiety over this issue has been heightened by the most recent briefing note from the IFS covering child and working age poverty. Clearly, progress in improving child maintenance outcomes should contribute positively to reducing child poverty and any disruption to current arrangements need to be examined from this perspective, especially given the IFS report. This analysis makes grim reading. The conclusion is that the coalition Government’s reforms have no discernable impact on absolute and relative child poverty in 2011-12, but for 2012-13, the IFS estimates that the Government's reforms will increase relative poverty for children by 100,000 and absolute poverty by 200,000. For 2013-14, it is considered that the reforms will increase relative poverty by about 200,000 children and absolute poverty by 300,000 children. So much for the claim that the Government’s reforms will not have a measurable impact on child poverty. They clearly will. What role does the Minister see, therefore, for the child maintenance system in combating child poverty, especially given the shocking figures in the IFS report? I beg to move.