My Lords, in speaking to these regulations I declare an historic interest as a former non-executive director of the Child Maintenance and Enforcement Commission until 2010, and a very historic interest as a former chief executive of the National Council for One Parent Families, which is now lost in the mists and merged with Gingerbread.
I thank the Minister for his explanation of these regulations, and I am grateful to other noble Lords who have spoken on this for the illumination they have added. Most of the time, when I face the Minister across the Dispatch Box, I would happily change places, but when he faces down the noble and learned Lord, Lord Mackay of Clashfern, he is welcome to that seat, at least for the duration of these proceedings. I wish him well in answering the points raised by the noble and learned Lord.
I thank all those organisations who sent in briefing, including Gingerbread and the Resolution Foundation and, indirectly, Families Need Fathers. We on this Committee are also indebted to the noble Lord, Lord Goodlad, and his Secondary Legislation Scrutiny Committee, which did an extraordinarily thorough job on these regulations. It identified gaps and question marks and pursued Ministers gently but persistently, drawing information from them bit by bit until it got answers. I put on record my appreciation of its intelligence, analysis and perseverance.
These are significant regulations, and despite the lengthy impact assessment, we all know that we do not really know what will happen as a result of both the new scheme and the charges being imposed on both parents. The Government’s aims for these reforms, which were set out clearly in the Green Paper, Strengthening Families, Promoting Parental Responsibility, were twofold: to achieve cost savings for the taxpayer
and to create an incentive for parents to work collaboratively to make family-based arrangements rather than enter a statutory scheme.
The Secondary Legislation Scrutiny Committee’s excellent 23rd report of the current Session draws these instruments to the special attention of the House on the grounds that they may imperfectly achieve their policy objectives, so it is important for the Minister to reassure the Committee on this point. Specifically, the Select Committee says:
“we conclude that although the transfer scheme may make savings it may imperfectly achieve the overarching objective of providing financial support to children”.
The Committee engaged in a correspondence with the relevant Minister in another place, which eventually drew more information out but in my view was not ultimately satisfactory in providing assurance on that point.
I shall ask the Minister to reassure the Committee on those broad points and then ask some specific questions. First, a number of noble Lords have raised behavioural issues. The impact assessment assumes that fewer cases will enter the statutory scheme as a result of the change, but also suggests that the proportion of arrangements affected will rise from the current 60% to 70%. The assumptions seem to be rather optimistic. The present pattern of compliance in family cases is one thing, but that is not necessarily a guide to what we may expect to see in future. As my honourable friend Kate Green put it in another place, at the moment we have parents who may be choosing positively to co-operate, but in future parents with family arrangements will be those who simply see it as the lesser of two evils. There will therefore be a different set of arrangements going on in family arrangements from those that prevail at the moment, so how confident is the Minister of those figures?
On the cost objective, the Government are clear that they expect to score substantial financial gains from the new scheme being introduced, especially as the result of charging fees. Fees both bring in income and reduce running costs, as parents are deterred from using the system. However, I looked in vain for a parallel level of ambition to increase the amount of child support that would actually reach children, a point made by the noble Lord, Lord Kirkwood. What are the Government’s ambitions in that connection? After all, the point of a child support scheme is not to be efficient. It should be efficient, but its point is in fact to get money from the non-resident parent to the parent with care. Presumably the Government have some ambitions for increasing the amount of maintenance that is going to be transferred to children as a result of the reforms. Could they help us on that point?
I also have some questions about the implementation of the new scheme, some of them touched on by the noble Lord, Lord Kirkwood, and some by the noble Baroness, Lady Howe. This is crucial as the Government always said that they would not introduce fees until phase one of the new system was working well. The Minister told us that the scheme started in November and that they aimed to move people on from next summer. Can he tell us a bit more, as the noble Lord,
Lord Kirkwood, also asked, about how the new scheme has been performing so far? I will certainly be interested to hear the answer to the noble Lord’s question about how many cases have been paid in full.
How is the interface with HMRC working? I am particularly interested in self-employed non-resident parents. There is the issue of who is responsible for enforcement. I am assuming that that will lie with the CMS but it would be helpful if the Minister clarified that. A common complaint is when a self-employed NRP declares very low levels of profit on, for the sake of argument, his business but the parent with care believes, or has evidence based on his apparent lifestyle, that in fact a much higher level of income is coming in than might be suggested by the latest set of accounts made available to the taxman. At the moment, if she has that evidence she can go to the CSA and it can investigate that. If that should happen in future, does the CMS have the powers to investigate that or will it be left to HMRC? If the CMS has the powers, will it exercise them? If it is HMRC, what assurances has the Minister had that it will do this and prioritise it over the other workloads placed on its shoulders?
When does the Minister expect to be in a position to publish a full range of statistics on cases being dealt with by the CMS? Will these stats show how many cases transfer from direct pay to collect and pay? See—I have got the jargon. It would be helpful to know what was happening to cases going into the scheme.
By what precise criteria will the Government decide when to commence the full new regime? A Written Answer to my honourable friend Kate Green in another place on 23 January said that the Government will determine when the new scheme is operationally ready for the transfer of cases in accordance with the criteria of,
“the Department for Work and Pensions Project Change Lifecycle Framework”.—[Official Report, Commons, 23/01/14; col. 263W.]
I apologise that I am not immediately able to translate that for the Committee, but perhaps the Minister can do it for me. What does that mean and how will it be applied?
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The noble and learned Lord, Lord Mackay, gave us the benefit of his wisdom, gained over many years, about what happens to divorcing couples and the challenges that will be faced in dealing with family-based arrangements. That point was taken up by the noble Lord, Lord Kirkwood. I, too, worry that the Government are being overly optimistic about how easy those parents will find it to make family-based arrangements. I have seen a copy of a joint letter to the Government from Gingerbread and Families Need Fathers, which says that 13% to 14% of parents describe their relationship with the other parent as “not friendly” and more than 40% of parents in the current scheme have no contact with one another at all. That is a pretty big standing start, to go from no contact to being able to agree a familial arrangement. I am very interested to know what kind of support will be available to people in that situation to help them to do it. The noble Lord, Lord Kirkwood, also raised this important point.
The Government have said previously that their aim was to offer an integrated model of family support services but, as the noble Lord, Lord Kirkwood, pointed out, the pilots are getting up and running only now and some are not due to start until May. Can the Government explain how they are holding together their plans to move some of the longer-standing cases, where the parents are least likely to be in contact, on to the new scheme early with the kind of provision of help they will need to enable them to do this?
Turning to the question of fees, I would be grateful if the Minister could clarify the purpose of introducing the fees. Is it to bring in money to offset the costs of running the scheme, or is it to try to disincentivise parents from using the scheme? It would be helpful to the Committee if the Minister could make that clear. If it is the latter, either solely or in part, what thought have the Government given the kinds of parents who may be deterred? The Government’s own statistics show that a third of new CSA applicants have already experienced a broken private arrangement; more than half have experienced violence or abuse from the non-resident parent; and almost six in 10 have poor or non-existent relations with the other parent, as we have just discussed. So there will be some—possibly many—parents with care who have good reason to want to use the statutory scheme, and the Government need to think carefully about the consequences if the fee regime was used to deter them.
I would also like to understand the role the fees are playing. The noble Lord, Lord Kirkwood, has been busy with Written Questions, and he drew out from the Government not just the fee income that is predicted but cost saving that the service is anticipating over the next 10 years—not just in the current scheme but the additional costs that will have to be invested. Does the DWP want to encourage parents to use the statutory scheme to pay fees so that it can use the money to offset its costs, or does it want to deter them from using the scheme because that way the running costs will be lower? Given that, what steer has been given to parents?
The noble and learned Lord, Lord Mackay of Clashfern, expressed very clear concerns about the fact that a parent with care faces a collection charge, despite the fact that she is able to access the scheme only if it has already been established—and not by her—that the non-resident parent is unlikely to pay. The Minister mentioned behavioural incentives. Can he explain what the behavioural incentive is for the parent with care in those circumstances? If she is able to access the scheme only when it has become clear that the non-resident parent will not pay, what should she do differently?
The noble Lord, Lord Kirkwood, has raised the question of appeals so I do not need to revisit that, but I will listen with interest to the Minister’s response. I have a couple of other small points. One concerns domestic violence. I very much welcome the decision not to charge application fees in cases of domestic violence. The Minister will be aware that even where domestic violence has been alleged or indeed admitted, the non-resident parent can still use the direct payment option. He will also be aware that voluntary organisations,
including Gingerbread, are concerned about what impact that might have on the safety and security of the parent with care in those circumstances.
In the impact assessment, the Government have recognised the need for some sort of money transfer option, which would enable the parent with care to prevent any contact information being shared; for example, normal bank sort codes will reveal geographical information about where she is located, and she may have gone to another part of the country to protect herself and her children from a violent former partner. I believe that the Government are looking at trying to find some kind of bank account which would have non-geographical data attached to it. Can the Minister update the Committee on that? Can he also assure us that, unless and until a parent with care is able to have that kind of safe mechanism, she will not be expected to accept payment directly from the non-resident parent, with the consequences that that brings.
In a letter to the noble Lord, Lord Goodlad, dated 17 September, the honourable Steve Webb, Minister in another place, said:
“We also plan to run a media campaign from early 2014 to make CSA clients aware of the changes”.
Can the Minister update the Committee on that?
Finally, a number of noble Lords have mentioned the 30-month review, which was the concession that the Government made when the Welfare Reform Act was passing through this House. I assume—the Minister may correct me—that that review is likely to be too soon to take advantage of the data coming out of the longitudinal study to which the Government have committed. Given that, can the Minister give the Committee some assurance about what the review will be like? What format will it take? Will it commission proper research evidence? What kind of evidence will it expect to gather for that?
We are left with a good many questions here. I hope that the Minister can answer them all today—if he cannot, perhaps he will write to us. If he finds that he is unable to answer them, I wonder whether he might think again. In particular, I very much hope to hear the Government tell me that I have missed, which I may well have done, the fact that they have set themselves an overriding objective to increase the flow of maintenance to children as their principal policy aim. If they do that, a number of the other questions may come out in the wash.