Fees to access maintenance collect by replacement to Child Support Agency also penalises women, says committee
Plans to charge single parents for access to the replacement for the Child Support Agency could worsen child poverty, MPs have warned.
The public accounts committee also expressed concern that the fees of up to 12% of any maintenance collected by the new body, the Child Maintenance and Enforcement Commission, were being used to fill a black hole in its budget.
The ministers said that half of all children in the UK from separated families are already being brought up in poverty.
Almost half of parents received less than £20 a week – and at that rate £2.40 might be deducted to pay for the service – a lucrative stream of cash for the commission but one that takes money from poor households. The charging scheme also penalises women, as nearly all those who contact authorities are mothers chasing fathers to pay for their child’s care.
Margaret Hodge, chair of the committee, said: “It is essential that parents with responsibilities for care receive the full child maintenance owed to them to support their children.”
“I am concerned that the commission’s cost reduction plans seem to rely heavily on charging parents to use its services. The commission must ensure that the introduction of fees does not end up making child poverty worse,” said Hodge.
The report on Friday also notes that the cash raised by fees means that the commission’s savings target of £151m by 2014 is reduced to £117m — undermining government arguments that the only reason to charge people is to dissuade them from using the system and encourage them to opt for voluntary agreements.
Figures produced by the National Audit Office earlier this year showed that by 2021, the charging regime would be producing £167m in revenue for the commission – money that would disproportionately come from the poor.
The commission will also effectively write off billions of unpaid support. Absent parents now owe £3.7bn in child maintenance but the agency in charge of securing payments only believes it can collect £1bn of that. MPs claimed it “beggars belief” that so much money is being written off and said parents are frustrated at not being paid the right amount of money or any at all.
Hodge also pointed out that a new IT system being introduced by the commision to try to save money is already late.
“To meet the current timetable, the critical testing will need to be done at the same time as the system is being delivered, a recipe for failure in the case of many previous government IT projects. Every month of delay will cost the commission £3m – money it can ill afford to waste.”
Charities said that they were “very unhappy” on the new charging structure. Gingerbread’s chief executive, Fiona Weir, said: “We are very unhappy at the heavy reliance being placed by the commission on charging parents to use the future child maintenance service in order to meet their own costs targets, and the admission by the commission to the committee that cost considerations will reduce the amount of collectable maintenance arrears owed to children that they are willing to collect.”
A Department for Work and Pensions spokesman said: “We thank the committee for its report and will carefully consider its contents before responding fully in due course. Child maintenance presents serious challenges which have tested successive administrations.
“The government’s fresh approach will encourage and support parents in making their own maintenance arrangements whenever possible — benefiting children, parents and the taxpayer.”