The £3.8billion question….Child maintenance arrears

£3.8billion is the figure most often mentioned when politicians, Gingerbread, or anyone else is looking to garner public sympathy for the alleged amount of arrears that have accumulated as a result of the failures of successive child support maintenance systems in the United Kingdom.

Where have these alleged arrears come from?

The alleged arrears that are claimed to exist have been built up under the 1993 and 2003 child support schemes (administered by the Child Support Agency or “CSA”). More recently, the 2012 Child Maintenance scheme administered by the “Child Maintenance Service” (which is nothing more than a rebranded CSA using the same incompetent management and staff) has continued to add to the legacy figure.

Truth vs Fiction

Firstly, before we deal with some interesting facts we should make it clear that we are not opposed to a fair and equitable child maintenance system that is there as a safety net for the most vulnerable children. However, what the Government continues to support is nothing of the sort.

We will continue to campaign for wholesale reform of the legislation surrounding child maintenance and also level well deserved criticism at those people responsible. In particular, the elected officials in charge of the DWP and senior staff at the CMS working under them. Then there are the supporters; people such as Heidi Allen who attempt to create political capital to further their own political agenda on welfare “reform” rather than even attempt to understand the root cause of the issue with the CMS, never mind admonish those who are actually responsible.

The simple fact is that nobody can have any confidence that the suggested figure of £3.8billion is in any way accurate. The National Audit Office published a report on the Child Maintenance Service where they say that the DWP themselves have acknowledged that around 75% of the alleged arrears are uncollectible. Specifically, they say:

The Department has assessed that around three-quarters of the £4 billion arrears balance is uncollectable. It assesses arrears as uncollectable when there has been no recent contact with the non-resident parent and no payment against arrears in the last six months. The Department has not yet set out how it will manage the £3 billion of uncollectable arrears. The Department’s current strategy prioritises collecting arrears on cases with continuing payments. It plans to publish a new strategy for addressing arrears including 1993 and 2003 scheme arrears in 2017 (paragraphs 3.2, 3.3 and Figure 3).

National Audit Office Report, March 2017

You’ll see in a moment why the DWP was unable to collect these arrears… they simply didn’t exist! 

The National Audit Office goes on to criticise the Department of Work and Pensions over the accuracy of their calculations (something we continue to hear an awful lot of at Voice of the Child from both Paying and Receiving Parents) saying the following:

The Department for Work & Pensions (the Department) has not managed 1993 and 2003 child maintenance cases with enough accuracy. Since child maintenance schemes began in 1993, the Comptroller and Auditor General has qualified his opinions on the 1993 and 2003 scheme accounts, because of inaccurate assessments and incorrect adjustments to arrears. Inaccurate assessments can mean that some parents receive too little for their children while others face hardship because of paying too much. Arrears are maintenance payments that are owed but have not been paid (paragraph 1.2).

But the problems with calculations don’t end with the 1993 and 2003 schemes. Arrears supposedly accumulated under those schemes have been passed on to accounts now managed under the 2012 scheme

An internal audit report found that a lack of assurance over the robustness of arrears balances on 1993 and 2003 scheme cases increases the risk that arrears calculated at case closure and transferred to the 2012 scheme are inaccurate (paragraphs 3.7 and 3.8).

The small print in the National Audit Office report also reveals that

The 2012 scheme accounts are also qualified due to inaccurate assessments, although the arrears balances are not qualified. Department for Work & Pensions, Client Funds Account 2015/16, 2012 Child Maintenance Scheme, December 2016

Essentially, the DWP have been getting it wrong for years and continue to do so.

So what?

If you’re not as horrified as we are at the above admissions then consider the following. The DWP is currently consulting on a “new” arrears strategy which contains a number of punitive and extremely intrusive mechanisms to recover the money they say people owe.

A reasonable person would probably not disagree with the statement that the DWP should be able to prove the existence of a debt down to the last penny before any of the proposed action is even considered. The trouble is the DWP and CMS don’t have the ability to do this (especially in the case of the the legacy arrears passed from the 1993 and 2003 schemes).

An innocent mistake or flagrant manufacturing of figures to “frighten people”?

The House of Commons Work and Pensions Committee (which is the same Parliamentary Committee that recently recommended increasing sanctions on paying parents) was told the following in 2009. You can see the full report here.

Tom Levitt MP asked the following question (Q49 in the document) of a man called Stephen Geraghty (who ran the Child Maintenance Enforcement Commission / CSA) at the time.

If there is one group of people that MPs never meet, it is satisfied customers of the CSA because they do not have reason to come to meet us in the first place. My impression is that most of the cases that come across my desk are parents with care with issues of arrears which they want to see addressed. My impression is also that the number coming to me with that situation peaked a few years ago. It has been falling for several years but has gone up recently is the general feeling I get, but particularly what concerns me amongst those people is the number who are coming to me with very large amounts of arrears, say, over £25,000. Is that a general trend, that the size of arrears is getting bigger, and, if so, why does no alarm bell ring when arrears reach a certain level?

Mr Geraghty’s response is horrifying in its admissions and, unless you have a desire to trawl through a lot of pretty boring dialogue you might have missed it:

…Our average arrears across the case load are about £3,000 something. More than half of them are less than a thousand— 56% are less than a thousand—but then there are some very big ones. Typically, the very big ones are what are called interim maintenance assessments where, to frighten people into giving us information, we made an estimate—a process that was used in the 1990s that we do not use any more now—and about £1.2 billion, so almost a third of the total arrears, is these estimates, and most of the very big arrears are these figures which were deliberately made big in order, as I say, to push people into providing data. It works for the Revenue, apparently, but it has not worked for us. When we eventually catch up with these people and get the information, typically we write down that calculation by about 70% because the estimates were very high.

So, there you have it. The CSA made up a huge amount of arrears in the 1990’s and claim not to be doing that anymore. At Voice of the Child we have to say we are exceptionally cynical about just how truthful that statement is given the interactions we have we paying and receiving parents on a regular basis.

Mr Levitt picks up on a problem with the CSA’s approach where he says

What you said earlier about using calculations, in a sense, in order to scare the absent parent, it also lulls the parent with care into a false feeling of confidence that she, as it usually is, is going to get more. She thinks she is going to get so much and she is never going to get that.

It’s an issue about setting expectations of a receiving parent.  When they don’t receive the money they are told they are due this surely has the potential to seriously impact the parental relationship passing a corresponding animosity onto the child.

Summary

At Voice of the Child we are clear that the major issues with the Child Maintenance Service are not that people are not paying. A look at their own statistics demonstrates that over 85% of maintenance is paid in full.

You can see for yourself that the National Audit Office has little faith in the Department of Work and Pension’s ability to get their maths correct. Furthermore, in the past (and possibly in the present) they are guilty of literally making up numbers.

The scandal rests with the Government and it is the Government that should settle this “debt”. 

This whole matter deserves a full public enquiry and the sacking of everyone responsible.

The children and wronged or lied to parents on both sides deserve that at the very least.

 

In a Family Law system designed for combative parents there is no real allowance for the views of children and any understanding of how Family Law ultimately impacts on children most of all.

We speak for the children in Family Law so that, finally, the children have a voice.

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