Child Support Agency

Sheila Gilmore Excerpts

Wednesday 11th July 2012 Westminster Hall

[Sheila Gilmore (Edinburgh East) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Weir, and I congratulate the hon. Member for Loughborough (Nicky Morgan) on securing this important debate. It is an issue that, even during our discussions on reform, often comes at the end of a lot of other matters and has sometimes not received the full amount of time that it deserves.

I do not for an instant pretend that the CSA has not had problems, but I am concerned that we are making a wrong analysis of them, and it is possible that we could again make a gigantic mistake. Many mistakes were made when the CSA was set up in 1993, and one reason for that was because at the time, the views of those who worked in the field were almost totally disregarded.

I had better declare an interest because I am a family lawyer by profession although I am not currently practising. The CSA was introduced to meet a need because the previous systems were not working well. Then as now, many children and families were not receiving the money that they should have been getting, and the Government did not invent the CSA simply to be difficult. When it was introduced, however, it was an all-or-nothing system that was not terribly helpful and produced a huge work load right from the start. That was probably the wrong end to go from. I am still convinced that the CSA should have been started, at least in the early stages, on a slower basis, perhaps dealing only with some types of situation, and that we should have listened to some of those who were used to working in the field.

Many of the problems that the hon. Lady mentioned are endemic to the situations in which people find themselves, rather than caused by the Child Support Agency. The hon. Lady mentioned self-employed people, and they are always extremely difficult to tackle. They were extremely difficult under previous legal powers when we went to court, or used the system in Scotland that did not involve going to court—I will mention that in a minute. Trying to get from the self-employed what we felt they ought to be paying was extremely difficult, and their ability to produce accounts that made it look as if they did not earn much was notorious. That was always a problem, as were people who disappeared and went overseas. I had a client whose husband worked on oil rigs. Every time we got an earnings assessment for him, he would simply give up that job and take another. He was a scaffolder and very well paid, and his ability to thwart the system, as it was then, was great. I do not, however, believe that that situation would have been any easier for the CSA. We must address the real problems, and not necessarily blame the CSA.

[Mr Spencer]

Surely the hon. Lady will acknowledge that within her constituency there will be people who experience enormous frustration when trying to communicate with the Child Support Agency. People get moved between different offices around the country; the CSA loses information and does not acknowledge the simple facts that are happening in people’s lives. That is the fault of the CSA rather than the lifestyle of those individuals.

[Sheila Gilmore]

I must say that my case load on this matter is not as large as some people’s appear to be. Some of the cases are almost a legacy because they come from the previous system. I have some long-standing cases, and in my experience, although I do not seek to defend the CSA, it is not necessarily much worse than dealing with other large Government agencies.

I am worried that we are in danger of making another big leap based on a wrong premise. The Minister’s assumption—this also came through in the opening speech by the hon. Member for Loughborough—is that the statutory child support system is the cause of discord and bad feeling between parents. However, if we start off with a wrong premise, we will come to a wrong conclusion.

The hon. Lady cited research that indicated that two thirds of people with family-based arrangements were happy with them, whereas only one third of CSA clients were happy. Some 74% of those with family-based arrangements considered them to be fair, compared with 42% of those with CSA arrangements. However, the crucial point missing from that analysis is that the people who end up using the CSA are those who cannot reach family-based arrangements. Those who can reach such arrangements do so, and we are not comparing like with like if we come to that conclusion and decide that we should basically shrink the existing statutory system. If I understand the situation correctly, those currently within the system will be asked to close their cases and restart the process by trying to get a family-based arrangement. If they cannot, presumably they will come back through the process. The idea is to shrink the system due to the analysis that the CSA is what causes discord between parents.

My experience as a family lawyer is that separation is a very difficult situation. People do not separate because they are getting on well. They do not usually separate because they can communicate well. Often they are angry and often they have good cause to be angry. That anger is not something that is just stirred up either by the courts, which is one of the assertions that we hear, or by the Child Support Agency. People are angry. They do have difficulty getting money, and there are reasons why that will always be quite difficult.

Generally, when people separate, both partners lose financially. It is a financially difficult situation for them, and often it does not get better after a few weeks, months or even years of separation, because new liabilities come into play. People form new relationships and they find it even more difficult to cope. These things influence people’s attitudes to one another, and some people clearly are not willing to come forward to make an agreement. My concern is that we are making the wrong assumption—that having a statutory system is causing discord—and if we start from the wrong point, we will reach the wrong conclusion, and the solution will not be the one that cures the problem.

I would like to make a practical proposition to the Minister. It is drawn from Scots law and could fill a gap. The Government should think seriously about it, especially if they are determined to shrink the child support arrangements. In Scotland, it is possible to have not just the vague, family-based arrangement that everyone talks about, but a legal minute of agreement, which is enforceable in the same way as a court order would have been under the previous system. These minutes of agreement are usually negotiated with the assistance of solicitors. Many people have them drawn up, and they have worked extremely well. As I said, they are directly enforceable. All the same steps can be taken to enforce them as could have been taken with a court order. That model would enhance the system here tremendously. I offer it up, from Scotland, as something that perhaps the Minister will want to discuss with the Ministry of Justice. They may want to discuss how something such as that might be introduced into the English legal system to enable people to have something that, yes, is agreed—it is negotiated and agreed—but also has legal enforceability.

There is one minor point about minutes of agreement that the Minister might also want to consider. Under the previous CSA arrangements, after one year of having a minute of agreement, it was possible to go to the CSA and renege on it—that was possible for either partner, in effect. The Law Society of Scotland suggests that it would be better if that were a four-year period, and I concur. I think that if people have been properly advised and a minute of agreement has been drawn up—people can ask for a minute of agreement to be reduced in certain circumstances, such as if they have been coerced—a four-year period would be sensible.

Another couple of issues have been raised about how the much-diminished statutory scheme will work in the future. These have to do with finding out about the earnings and assets of some of those who are the most difficult to deal with. Under the present regime, the CSA can have regard to evidence about people’s assets and lifestyle that suggests that their income is not what they say it is. My understanding is that the Government propose to remove the effect of two regulations that achieve that at the moment. I believe that they are regulations 18 and 20 of the child support regulations. That, too, would be a mistake, because it would enable people to construct their affairs in a particular way. Regardless of gender, it is very frustrating for the parent with care, who is struggling, to see the other parent living what appears to be a fairly affluent lifestyle, yet able to present official records suggesting that they do not have the money to pay for their child. That makes people angry, but it often has to do with the attitude of the partner. The Government should reconsider that.

Fundamentally to take away the system and say, “We want people to make their own arrangements,” especially if they will not be legally enforceable, is a mistake and underestimates the difficulty of making those arrangements. Furthermore, that is happening at a time when changes to legal aid may make it harder for people to obtain legal advice so that they can turn the arrangements into more formal ones, and to obtain advice on what their rights are. Sometimes—perhaps not always but sometimes—informal agreements are not very good ones. Let us say that one parent says to the other, “I’ll give you 20 quid a week. That’s fine. Just don’t shop me to the CSA.” I know people who have been through that. The weaker partner, the one who has perhaps traditionally been quite afraid—I am thinking not just of domestic violence as it is narrowly defined—may well accept that when actually it is grossly unfair. People need proper support. I am not convinced that the £20 million that is talked about will be sufficient to put in place for people the level of advice, support and mediation that will be required if the Government press ahead with their proposals.

It is regrettable that, because the Government have framed the question in the way that they have and made this assertion—created this straw man—about the CSA being the cause of so much family discord, that will lead them into a situation in which even fewer children will get maintenance.

[Mr Gregory Campbell (East Londonderry) (DUP)]

The hon. Lady is touching on a very important point. Obviously, the position will differ throughout the United Kingdom, but I have found through experience that the turnover of staff at the Child Support Agency is pretty significant, given the difficult task that many of them face. Does the hon. Lady agree that additional training of staff coming into the agency would go some way towards trying to deal with what are very emotive and difficult problems and could help alleviate the issues to which she has just alluded?

[Sheila Gilmore]

I thank the hon. Gentleman for his intervention. I agree. Obviously, we want staff to be well trained, given that they are dealing with very difficult situations. My point was that, if the official agency is to be shrunk to the extent that appears to be the case and people are to be largely discouraged from going down that route, on the assumption that it will be relatively easy for them to reach family-based agreements, that flies in the face of the reality of the situation that many people find themselves in after separation. I am referring to the fact that it is very difficult to conduct these negotiations and that that will allow people who just want to walk away to do so even more easily than they can at the moment. If the answer is to put in support services, they have to be put in at a level that will be effective. Up and down the country, people know that there are often waiting lists to get support and advice and that mediation is not necessarily easily available—and mediation itself has a cost. Not all mediation services are offered free to users.

It is important that we do not throw the baby out with the bathwater and that a generation of children do not lose out as a result of these proposals.

--- Later in debate ---

[Sheryll Murray]

I thank my hon. Friend for highlighting that important point. I would like a formal mechanism through which parents can share experiences and suggestions with the Government and the CSA. A kind of CSA users forum or a panel made up of non-resident parents and those with care could be initiated to feed back their experience regularly to Government. That would enable the CSA to improve its performance for parents with care and non-resident parents.

A major issue seems to be the CSA’s use of the deduction of earnings system. Non-resident parents complain that the CSA does not adequately monitor changes in their income or give them sufficient notice that a deduction of earnings is taking place. Deduction of earnings comes out of the non-resident parent’s pay before they see it, and the payroll department cannot make changes if anything is incorrect. Nothing can be done if an error has been made; the person paying the money has to claim it back and prove that errors were made, which can take years.

An absent father who lives in my constituency has never missed a payment. He was following the old rules, and then the departure was granted and he went on to the new rules. The CSA now says that he has arrears of £8,000, although he has never missed a payment. There appears to be a catalogue of errors, which are being investigated, including putting the wrong child’s name on correspondence, which causes unnecessary angst. The CSA is now taking £400 out of his wages per month for one child, which is ridiculously high. Because that money comes out of a deduction of earnings, the father has no say over the amount taken out—at one point, it increased considerably with no explanation. The situation has caused untold stress to him and his family, especially when the paperwork says that he should pay £42 a month.

Outstanding child maintenance arrears increased by almost £1 billion between December and March. If net weekly profit is over £100, £5 plus a percentage of weekly income in maintenance is payable. That may help to explain the complaint that non-resident parents often try to avoid paying child maintenance. The Government recognise that, and the Child Maintenance and Enforcement Commission has recommended a new scheme, which is at consultation stage. It would use HMRC-sourced gross annual income for the income child maintenance calculation. That method would reduce costs to business by £0.8 billion.

A major difficulty for the CSA occurs when the non-resident parent is self-employed. Self-employed status means that it is much more challenging to obtain accurate figures. Money cannot be taken at source or from a deduction of earnings. A case in my constituency has taken approximately 14 years. The parent with care is owed a considerable amount of money. The absent parent owns a number of properties, and a charge should be taken on his properties. Allegations have been made—I cannot confirm or deny them—that the absent parent has put his accounts into his partner’s name, so it appears as if he has no assets. I obviously do not know whether that is true, but it is clear that it is not a straightforward case.

[Sheila Gilmore]

The circumstances the hon. Lady describes are familiar to me, but would she not concede that such difficulties existed before the CSA and there would undoubtedly be difficulties whoever enforced decisions? Such cases were always hard to pursue, because people could do exactly as she describes.

[Sheryll Murray]

I accept what the hon. Lady says, but I am sure that we can do something with the system to ensure that there are not such anomalies and long-standing cases. It has been 14 years and there is still no conclusive result. The situation needs to be addressed.

I must express my concern that in such circumstances, the only option left open to parents with care is variation mechanisms, such as lifestyle inconsistency tribunals, and the Government have announced their intention to scrap them. If the last line of defence for parents with care is removed, what hope is there for justice to be done and for children to get the money they are owed? Some non-resident parents are engaged in practices that, if this were income tax and not child maintenance, would be seen as tax evasion. I urge the Government to think again and ensure that parents with care have adequate opportunities to appeal against obviously perverse CSA assessments.

In another constituency case, the absent parent lives in a caravan, which is not an official registered address. That completely throws the normal process off balance, because the CSA has to send out officials to identify the tenant. In that case, the non-resident parent denied their identity to the CSA and had to be photo-identified by the parent with care. That process has taken months. The CSA should be equipped to deal with unusual situations. The person concerned has asked for face-to-face meetings, but is being ignored. I have even visited the regional CSA centre with my caseworker to discuss long-standing cases—the regional manger of my centre was a classmate of mine from school.

The CSA costs the public £450 million, and a typical case costs the taxpayer £25,000. Reform is desperately needed, but we must be exceptionally careful because botched reforms by the previous Government cost almost £1 billion, left thousands of families in hardship and were deemed one of the greatest public sector disasters of recent times. I am glad that we have a Minister and a Government who understand that reform is necessary and a priority, and that we have learned the lessons from the previous Government’s time in office.