Committee of Public Accounts Press Notice

Child Support Agency: Implementation of the Child Support Reforms

Publication of 37th Report of 2006-07

Edward Leigh MP, Chairman of the Committee of Public Accounts, today said:

"The reform of the Child Support Agency has been one of the greatest public administration disasters of recent times.

"The facts speak for themselves. More than one in three non-resident parents fail to pay any of the money they owe, amounting to £3.5 billion in uncollected maintenance. Around 230,000 of the almost 250,000 cases where a parent isn't complying have not been handed to the enforcement arm of the Agency. And 275,000 cases are stuck in the system and so going nowhere.

"The Agency threw huge sums of money at a new IT system which was intended to underpin the reforms. The Department for Work and Pensions never really knew what it was doing in dealing with the contractors EDS and the system was a turkey from day one. Three years after it was introduced, it still had 500 defects and staff confidence has been seriously damaged.

"The department also spent £91 million on bringing in external advisers but there are no records of where more than a third of this money went.

"It took thirteen years of failure for the department to reach the conclusion that the Agency was not fit for purpose. During this time, thousands of children suffered; as thousands of absent parents have neglected their duties.

"It is hard to think of a body in which the public has less confidence: in 2005-06 alone, there were 55,000 complaints about the CSA.

"In 2008 the Child Maintenance and Enforcement Commission will replace the CSA. But it is by no means clear how this will benefit citizens or regain the confidence of those the Agency was intended to help. The government must keep an iron grip on this new organisation to ensure that the lessons have been learned from the CSA debacle."

Mr Leigh was speaking as the Committee published its 37th Report of the Session which, on the basis of evidence from the Child Support Agency and the Department for Work and Pensions, examined the implementation of the Child Support Reforms, focusing on why the problems in implementing the reforms arose, the impact on the quality of service, the remedial action taken by the Agency and the lessons learnt.

Since it was established in 1993, the Child Support Agency has consistently underperformed. By October 2006, one in four applications for maintenance received by the Agency since 2003 were still waiting to be cleared, there was a backlog of a quarter of a million cases waiting to be processed, and around 36,000 cases were simply stuck in the system.

Where it works well the Agency secures regular contributions from non-resident parents and transfers them to the parent with care responsibility or the Secretary of State, where the parent with care is in receipt of benefits. An estimated 100,000 children are lifted out of poverty through the maintenance that they receive.

Failure of non-resident parents to pay the maintenance due, however, can cause real hardship and have lasting consequences for parents with care and the children. To date the Agency has not made full use of the range of enforcement powers it has available. Around £3.5 billion of maintenance has not been collected by the Agency, 60% of which is now considered uncollectable. A significant consequence is that anyone considering not paying maintenance knows that they have a good chance of avoiding detection or serious penalty.

The Agency has to work through often complicated emotional, financial and legal issues to bring about a degree of financial stability for children and parents. It is a difficult area for government to administer. Assessment, collection and enforcement processes need to be perceived by all as fair and accurate while not being administratively complex. Unlike its counterparts in Australia and New Zealand, where average costs per case are lower and compliance is higher, the Agency has yet to meet this challenge.

The system of Child Support was last reformed when the Child Support, Pensions and Social Security Act 2000 introduced a new Child Support scheme that came into force from March 2003 (the reforms), and introduced the Child Maintenance Premium entitling parents with care on benefit to receive up to an additional £10 per week in maintenance. The reform programme was ambitious and its management showed a lack of realism in both planning and execution. From the outset, the development of new IT systems and telephony arrangements carried a high level of risk because of their size and complexity, coupled with a substantial business restructuring at a time when the Agency was already struggling.

Under a new Chief Executive, the Agency implemented an operational improvement plan in February 2006, whilst proposals for the long term delivery of child support were developed independently. The plan, which could cost a further £320 million, is aimed at tackling the backlog of cases, stabilising the new IT system by fixing the 500 defects that were still present three years after it was introduced, and taking a harder line with non-resident parents who try to evade their responsibilities. But given the scale of the Agency's problems, there will be no quick solution. Many parents with care responsibilities could still face a long wait before they see any of the money to which they are entitled from non-resident parents.

A Government White Paper in December 2006 announced the planned replacement of the Agency with the Child Maintenance and Enforcement Commission, with the aim of delivering a simpler and more effective way of assessing, collecting and enforcing child maintenance. The Commission is expected to be in place by 2008.

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