Rearranging the deckchairs on the Titanic – Analysis of a Select Committee

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Estimated reading time: 7 min

The common perception of Child Maintenance is that it is meant to benefit children. Of course, children benefit best when there are two fully involved parents in their lives. Any activity that prevents that from happening can not be working in the best interest of the children.

So, it is always interesting to see the approach of MP’s and the Work and Pensions Committee when it comes to looking at the systems that are in place for supporting children.

One of the last things that was published by the previous Government prior to Parliament being dissolved for the June 2017 General Election was a report by the Work and Pensions Select Committee. This document’s more formal name is the “14th Report – Child Maintenance Service” or “HC587“.

The report was the result of an inquiry into the workings of the Child Maintenance Service (CMS) which is a department within the Department of Work and Pensions (DWP). The initial inquiry was quietly announced in June of 2016 with an invitation to provide evidence placed on the Work and Pensions Select Committee webpage.

What was the inquiry going to look at?

The inquiry call for evidence asked for submissions to consider the following points:

  • How well is the CMS performing for children and parents? How could it be improved?
  • What problems do parents face – both for the parent with care and the non-resident parent?
  • Are levels of child maintenance set correctly?
  • What powers does the CMS have and how effectively are they used? How effective is enforcement action?
  • What will happen to CSA arrears or unresolved cases when parents move to the new CMS?
  • How might the CMS deal with any weaknesses or loopholes in the old CSA system?
  • Are there any opportunities for Government departments to work together to ensure regular payment?
  • Is there any international evidence on ways of ensuring parents regularly contribute to their children’s maintenance payments?

So, on the face of it the inquiry appeared as if it was going to look broadly at a number of issues relating to the operation of the CMS. We are sure that this would have been welcome news to both receiving and paying parents alike. The CMS (which is really just a re-badged CSA) has been widely criticised for incorrect calculations, rude and unhelpful staff and a heavy handed approach with parents who are trying to provide for their children.

Evidence was provided to the inquiry from a wide range of sources and included 71 submissions from individuals. Both paying parents and receiving parents were unhappy about the quality of the service they were exposed to.

Here are some of the quotes from the submitted evidence.

“(I) have thorough experience of being lied to down the phone and given false information”

 

“it took them a year to sort out the initial payments and therefore I was in one years arrears but not because I refused to pay but because it took them so long to sort out their paperwork.”

 

“…left me on the verge of taking my own life! The staff are useless, ignorant, inconsiderate to circumstances and are poorly trained and totally incompetent at the job that they are employed to do!”

 

“The system needs to change and it needs to be there for the children and what they deserve instead of giving false information of what is happening to cases.”

The general theme was one of dissatisfaction with the operation of the CMS. Essentially, they are doing a poor job on a number of fronts. The Select Committee therefore had a golden opportunity to look broadly at the problems of the CMS, identify causes and propose solutions to improve the system.

An Oral Evidence session was held in private where evidence was taken from 2 non resident paying parents (both fathers) along with evidence from 2 resident receiving parents (both mothers). Looking at the transcript of that evidence session it is clear that all four people were dissatisfied with the CMS. You can read the transcript of the private oral evidence session here.

Subsequently another evidence session was held with 3 witnesses representing various “groups”. Janet Allbeson from Gingerbread – the single parent charity*,  Michael Lewkowicz from Families Need Fathers and James Pirrie – A lawyer presumably representing his clients. This session went as you might expect with Gingerbread arguing from the mother’s perspective, Families need Fathers arguing from the father’s perspective and the lawyer arguing from a perspective of self interest. No one provided a child’s perspective on the issues. The full evidence session can be read here.

A further evidence session was held with Caroline Nokes MP (the then Undersecretary of State for Welfare Delivery) and a man called Tom Mccormack (Director, Child Maintenance Group at the DWP). It was during this evidence session that Heidi Allen MP (when addressing Caroline Nokes) said the following:

One of the arguments of people that had found—what is the word I am looking for—satisfaction in the courts was because it was more of an investigative service. The onus has seemed to always be on the parent with the child to provide evidence of the lifestyle, the evidence to prove the point that the non-resident parent had more money.

 

Heidi Allen MP, December 7th 2016

 

It should be noted at this point that what Ms. Allen is referring to is a variation mechanism that existed under the previous CSA administered scheme. Essentially, where the CSA considered that a persons maintenance payments were “too low” when assessed against the “lifestyle” of a paying parent they could force the paying parent to pay more by “assuming” a rate of income (8%) from the persons assets (even if these assets did not produce any income at all).

When the 2012 Child Maintenance Scheme administered by the CMS was brought in, the inconsistent lifestyle variation was removed because the calculation was now based on gross earned income (whereas previous schemes had been based on net income).

The DWP themselves in their written submission to the inquiry stated the following

 

Using income information reported by HMRC also allows us to capture a much wider range of income types received by paying parents – including from property, savings and investments (including dividends) and other miscellaneous income. This is a more effective route to taking this income into account than the “assets and lifestyle” grounds used under previous schemes.

 

Department of Work and Pensions, 2016

So, the DWP views the current scheme as “more effective” than the previous one. It relies less on subjectivity and is dependent on a theoretically simpler calculation. A source of potential for human error had been removed.

In a subsequent written submission, the DWP said the following:

 

The “lifestyle inconsistent” variation ground has been removed from the Child Maintenance Service, but where a non-resident parent has a lifestyle which it does not appear could be supported purely from their earnings, we are confident that such funds will be identified through the “unearned income” variation ground in the CMS, providing the paying parent has not failed to disclose any other sources of income. This approach is more effective than the lifestyle approach and removes the need for subjective decision-making, which was a source of dissatisfaction.

 

Department of Work and Pensions, 2016

So, there you have it, the subjective decision making was a source of dissatisfaction (i.e. complaints). Complaints cause delay and delay means that money is not reaching children, parents experience stress, it does not improve parental relationships, and it costs the DWP money.

Now, remember the original call to evidence and the nice broad based critique that it invited? We know from the supplied evidence that most were dissatisfied with the service. The Committee had the opportunity to identify and suggest a fix to many of the problems. So, what were their recommendations when they finally got around to publishing their report?

The report itself

Firstly, it is interesting to note that the terms of reference and reasoning for holding the inquiry had suddenly got a lot narrower.

Our inquiry focused on three main areas which we address in this report:

 

  1. the process of moving cases from the CSA to the 2012 scheme;
  2. the use of FBAs and access to the statutory scheme; and
  3. the use of enforcement powers by CMS, particularly in cases of avoidance.

Gone is any reference to how well the CMS is performing, problems that both paying and receiving parents face, whether the levels of maintenance are correct and the other things that were asked to be addressed in the call for evidence. There were numerous examples of unaffordable calculations and a lack of consideration to things like travel cost to maintain contact with children as well as very disturbing examples of children being denied their parental relationship to increase the money that the CMS can take from a paying parent.

Despite all this, the focus now seems to have shifted to keeping people in the Statutory scheme and enforcement.

The Committee also say this:

In March 2016 we held a private meeting with three mothers. They told us that they were not receiving the necessary financial support as PWCs from their ex-partners under the 2012 scheme and were distressed by an absence of support from the CMS in pursuing maintenance payments to which they were entitled.

 

Work and Pensions Select Committee, 2017

This meeting was also reported in a newspaper article in the Royston Crow. The picture shows 3 mothers and 3 MP’s (including Heidi Allen and Frank Field who both sat on the Work and Pensions Select Committee). Remember, this meeting was held in March 2016 and the inquiry was not announced until June 2016.

A cynic may conclude that the Committee did not have any intention of running an objective, impartial inquiry to improve the service for the children. From where we’re sitting, the outcome looks pre-conceived.

What did the Committee recommend?

You can read the recommendations for yourself  by following the link at the end of the this piece but in summary, the Committee recommendations focused primarily on arrears collection and enforcement. Worryingly, they  also seemed to have ignored the evidence from Caroline Nokes and the DWP themselves with respect to the problems administering a “lifestyle variation” and they have recommended this be reintroduced. Presumably they will also be beefing up the complaints handling team as well?

Last Words

We’ve already made clear in this short article that we think the Committee has done a disservice to the children by not looking for broadly at the numerous legislative, procedural and operational issues within the Child Maintenance statutory scheme in the UK.

Tinkering around the edges of the CMS issues is not going to solve the problems and it is painfully obvious that what is needed is wholesale, radical reform of the system to bring it into the current century and make it appropriate for modern life.

One of our researchers has contacted the House of Commons to get access under an FOI to the preliminary documentation filed to justify the formation of this inquiry. At this point, the House of Commons is refusing to disclose the information under the exemption of “Parliamentary Privilege”. This is currently with the Information Commissioner and we are waiting for their decision.

 

Link to the Committee report: 14th Report into Child Maintenance HC587

 

*”Gingerbread – The charity for single parents” is funded primarily from statutory sources with the DWP and HMRC both giving significant sums to them on an annual basis. Readers should note that their definition of single parent is “The parent with majority care (of the children) without a partner in the same household”. Clearly, this excludes all of the non resident parents paying child maintenance through the statutory scheme.

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