§ 2 pm
§ Mr. David Kidney (Stafford) (Lab)
When I was elected to Parliament in 1997, I knew that the Child Support Agency was unpopular and inefficient. I used to be a solicitor in private practice, providing legal services to families, and I had heard about lots of problems with the CSA. Indeed, I successfully challenged it twice in my local magistrates court over orders to make deductions from earnings. None the less, I was totally unprepared for the avalanche of complaints that I received after 1997 as a Member of Parliament. I had heard that MPs' postbags were full of complaints about housing, planning and social security payments, but mine was full of complaints about the CSA.
I was therefore delighted when the Government said that they would review the law and the work of the CSA. Indeed, because of all the complaints is in my postbag, I played an active role in the review, and I tried to persuade Baroness Hollis that the whole system should be changed. I accepted the value of having an agency that made assessments and guaranteed collection, but I felt that justice would be better served by introducing an independent element so that people who did not like an assessment could appeal to a magistrates court, present their personal circumstances and receive an independent adjudication on the right amount that they should pay. If members of the public had believed that they had been given a fair hearing, we would have had far fewer problems persuading them to cough up after an assessment.
However, I was not successful in my representations. The new system was an improvement, and the philosophy was fine. The system for making calculations and assessments was much simpler and freed up lots of officer time so that the CSA could concentrate on enforcement issues. There were also some new powers for the CSA. I was happy to stand by to see whether all of that would work, and I have to say that there were fewer complaints in my postbag for a couple of years after the new arrangements came into effect.
However, the day came when a constituent called Leah Wheatley contacted me. She said, "Are you aware that there are enormous problems with the Child Support Agency, which affect lots of your constituents?" I said, "None of my constituents has contacted me about that, so, no, I'm not aware of it." She said, "Well, would you like to meet some?" So, at the end of one of my regular advice surgeries in March, I met Leah Wheatley and anybody she cared to bring with her. I thought that there would be a handful of people, but the room was full. There were parents with care, who explained why they needed the money but were not getting it, and there were people who felt that the assessments against them were unfair for other reasons. My advice surgery was crowded with people, and I made random notes of the words and phrases that they used to describe how they felt. They said that they were "drained", "tired" and "fed up with eating cheap food". They said, "Non-payers are laughing". After spending an hour telling me their problems, they reached the conclusion that the policies were wrong and that the organisation of the CSA was not good enough.
166WH Just to ensure that people understand the personal agonies involved, let me mention one person from the meeting who came to see me privately at my next advice surgery. She showed me a little picture that her daughter had drawn on a yellow post-it. At the top was a smiling face, with the words "Daddy's food—yum". Underneath, it said, "Mummy's food—yuk", and there was a glum-looking face. I felt utter desolation at the thought that a family was going through that experience, with every day grinding on in the same way. The woman saw what I was thinking and hastened to say, "But I'm a good mother. I'm a good cook, and I know how to prepare food, but I just don't have the money. Sometimes, it has to be beans on toast." I shall explain later why the food on father's dinner table was so much better.
I want to say a big thank you to the chief executive of the CSA, Doug Smith. I asked him to come to Stafford to face that same group of people and to listen to their complaints and answer their questions. He agreed to do so, and he came in May. The room was bigger, but, again, it was full. More people were attending, so the story had spread. Everyone spoke about a problem with the CSA, so they were not spectators who were there for the sport.
The cases described at that meeting included that of a woman who had pressed the Child Support Agency for 11 years to get a payment, because the person who should have paid had been changing their address; a woman who had been waiting for a payment since 1996; a woman who had received just £250 in four years; and a person who said, "I've been badgering the CSA with my MP's help"—that is, me—"but the CSA keeps changing the staff around." That comment about the staff got a big cheer. Everyone gave me their details. I personally wrote to Doug Smith about every case and he has answered every letter. Some of the letters are full of apologies and explanations of what went wrong, and in some cases payments are to be made for redress.
Given the amount of public money that we are paying out in redress to parents who get a bad service, the system is not good enough. I learned from a parliamentary answer on 7 June—unique identification number 174600—that, up to the end of March 2003, £17,651,000 had been paid in redress payments to people who had received bad service from the CSA. That is on top of the CSA's running costs of £400-odd million. That is our taxpayers' money, and 1 object to it being paid in addition to the costs of running the service in order to compensate people who have not received the child support to which they are entitled. The most costly year so far has been 1998–99, when £4,351,000 was paid.
§ Mr. Nigel Waterson (Eastbourne) (Con)
I am sure that the hon. Gentleman would not wish to leave off his list the estimated cost to date of £456 million for the new IT system.
§ Mr. Kidney
Indeed; I have heard that there is a lot of grief about that. I shall discuss the computer system in a minute, if the hon. Gentleman will bear with me.
This is about the welfare of children. Payments are required so that children can receive food, clothes and a warm home. People ought to focus on the benefits to children—I would include among such people the 167WH parents who do not pay the money that they should pay. It is their responsibility to pay the money to their children. It is sad that there is no provision in child support legislation equivalent to that in the Children Act 1989 about the welfare of the child being the paramount consideration.
At the angry meetings that I described, I met a father who had fallen out with the CSA because there is no such consideration. Darren Phillips paid child support for his daughter for several years, but contrary to what he had been told, she was not with her mother. His daughter was in the care of the local authority, because the mother had done such a bad job. He asked at the meeting why he should have to pay for his daughter to be abused. I have a particular beef with the Minister about that case, because Darren Phillips objected to the fact that he was apparently in arrears with his child support for the time in which his daughter was not with the mother. He objected to paying the arrears and asked me to ask the CSA whether they could be written off. Happily, his daughter now lives with him, there are caring grandparents and everything is fine, but he frets over and over about the arrears.
I asked whether the payments could be written off and the CSA sent me a letter, which was dated 7 May but faxed on 13 May, in which Hannah Ford wrote:I have looked into Mr Darren Phillips case and the arrears that were outstanding on his account have now been cleared. A letter confirming this will be sent to Mr Phillips within the next couple of days.We were successful—the CSA told me that the payments had been written off. However, on 21 May I was faxed another letter from Hannah Ford, who wrote:I must apologise, but it appears that I was given the incorrect information. Unfortunately we cannot clear any of the outstanding arrears off Mr Phillips account.I do not wish to sound pompous, but I am a Member of Parliament and I expect a Government agency to tell me the correct information in writing. A telephone call could perhaps be misinterpreted, but I received a letter that I relied on. I wrote to my constituent to tell him that his arrears had been written off and he received a letter from the CSA saying the same thing. A week later, however, he received another letter that said, "Oh no, your arrears haven't been written off." If the Minister has any power over the CSA, I should like him to say that those arrears do not have to be paid. I want Mr. Phillips to be able to concentrate on the welfare of his daughter.
Most parents who have given up living with the other parent and sharing the responsibility for bringing up their children should pay child support. However, under our system, many parents pay nothing. Under what we now call the old system, a nil assessment was possible. Under the new system there is supposed to be a minimum payment of £5. However, in answer to another question I have found that last year, under the new system, 12,000 parents paid nil.
There are exemptions for people in full-time education, in hospital or in care homes, who do not have to pay anything. First, I question whether that is right. If it is right, I question whether there are too many exemptions. Finally, if there are 12,000 exemptions in 168WH one year, I question whether they are being properly applied. I ask the Minister to give close attention to whether the number of exemptions should be reduced. For the woman who showed me the little picture and could not afford food for her daughter, the £5 would be of some help if she got it regularly. I want people to get that money.
I said that I would return to the beans on toast case. That woman receives no money from her husband. He has left her and gone to live with a woman who has a very high income. He has given up a well paid job to become a full-time student. He has a nil assessment because he is in full-time education. Yet there is a massive disparity of living standards between the home in which he lives and the one in which his daughter is being brought up.
The child's mother asks me how it can be right that that man can divest himself of his entire income and yet have a good standard of living, while she gets nothing. My view is that in such a case it should be possible to deem an income equivalent to the one that has been deliberately given up, or, exceptionally, to consider the household income instead of the individual's income. I hope that the Minister will attend to a possible change in the law.
Other people who are assessed to pay child support deliberately give up their job to avoid the deduction from earnings that is the best and most reliable enforcement action that can be taken. I find that a ridiculously easy way to stop paying child support. Such a person can pop up somewhere else in another job. Until someone alerts the CSA to the fact that that has happened, it does not even look into the case again. If no one tells it, it never does so. If it does look into the case, there is another assessment, another demand and another deduction from earnings order. By that time, the person has given up the latest job too, without ever paying anything.
§ Mr. David Drew (Stroud) (Lab/Co-op)
I am sure that my hon. Friend will accept that there is a particular problem concerning people who have been in the armed forces. For all sorts of reasons, the Ministry of Defence has not been the most helpful organisation in the matter of chasing errant fathers or mothers. However, my worry latterly is that when people leave the armed forces the CSA still seems to be incapable of chasing them up. Has my hon. Friend had similar experiences?
§ Mr. Kidney
My experience of the armed forces goes back to when I was a solicitor, and I found the Army quite co-operative and helpful. My experience is different from that of my hon. Friend.
As to people who give up their job deliberately so as not to have to pay the money, surely a tagging arrangement is possible, so that when they pop up in the system again the old order must be paid until a new assessment is made. We would then have them, whenever they turned up in the system. That is important in showing that we mean business and that people must pay.
The same goes for people who have several part-time jobs, none of which, when assessed by the CSA, exceeds the protected earnings level, so that a deduction from earnings order cannot be made on any. One of the 169WH women at my meeting explained that she was affected by that rule and had received no money since 1996 because of it. She said that surely the totality of the father's income should be taken into account and that he should be paying child support. We need to consider, exceptionally, taking the aggregate amount earned by people with several jobs, rather than working on the basis of an individual employment income.
§ Mr. Alistair Carmichael (Orkney and Shetland) (LD)
Does the hon. Gentleman accept that the logical conclusion of his examples is not to have a Child Support Agency at all, and that the appropriate body to do the job that he describes would be the Inland Revenue?
§ Mr. Kidney
I knew that by the end of my speech we would hear the Liberal Democrat position on the Inland Revenue. I find it very difficult to argue against, so I am not going to do so. In a moment, I shall discuss those parents who have said that that it should be the arrangement. I am perfectly honest about that, but, as I said at the beginning, the Child Support Agency has a role to play.
Many people have complained to me that enforcement action is poor. All the letters that I received from Doug Smith apologised for every instance of poor performance. I want to ask the Minister a specific question to see whether he can provide an example of things getting better. When we changed the law, a new enforcement power allowed somebody to be disqualified from holding a driving licence. That was the ultimate penalty for not paying child support. How many people have so far been disqualified from holding a driving licence? The Minister should let us see whether the system is working better now.
Under the old system, some of the assessments were too high. The reason for that was ghat people thought that if they ignored the paperwork from the Child Support Agency the problem would go away. It did not, and they received a larger assessment than they would have had had they co-operated with the system. They then received demands for huge amounts of money that they simply could not afford, and they ignored those. That became a problem, because we had paper figures of tens of thousands of pounds in arrears, which were never the right amount and would never be paid. That takes me back to my first point: even the people on the receiving end of an assessment must feel that the system is fair and that they are paying their fair share. That is what we need to achieve in future.
Will the Minister assure us that when a parent fails to supply information the interim payments under the new system are reasonable? I think that the default payments are £40, £50, and £60. Does he think that the new system is working and ensuring that people make payments? For all parents and children involved, the interim payment is so important. It is no good saying that the arrears will be collected eventually; it is now that the money is needed and now that the food is wanted on the table.
A specific point was also raised, and I see that a court case involving somebody named Kehoe also touched on it. Under regulation 9A of the Child Support (Information, Evidence and Disclosure) Regulations 170WH 1992, the person who is entitled to receive the payment of child support does not have an automatic right to know why the paying parent has stopped paying. They do not have to be told whether there has been a change of circumstances or what the change of circumstances is. That is supposed to be because of data protection. I find that a massive insult to the people who are best able to tell the Child Support Agency whether what it is being told is correct and accurate. Those who are entitled to the money are entitled to information when the money dries up, and they are entitled to know why it has dried up. Will the Minister amend regulation 9A?
I was asked about the new EDS—Electronic Data Systems—computer system. What is the situation? We have all received answers to letters and to parliamentary questions, and even seen statements from the Secretary of State, about the continuing difficulties in getting the new system to work, because the IT is not working properly in tandem with it. The last I heard, the Department was still withholding payments from EDS every month, but it has agreed an increase in the overall contract price if EDS gets the system to work eventually. Will the system ever work, or is my right hon. Friend the Member for Birkenhead (Mr. Field) right that we should scrap the whole thing and start again?
My constituents need to know whether there is light at the end of the tunnel and whether they will start receiving money. In the meantime—as I have been told in some of the letters from Doug Smith—people are having manually to work out the amounts of money payable and the payments that are due, and to pass them through the system. That led to a story in the Financial Times on 24 April, which ran:Child Support Agency officials are using pocket calculators to work out an overload of maintenance payments despite a new 400 million computer system".That is obviously a ridiculous situation.
The House of Commons Library standard note SP/ 2898 of 28 April 2004 tells us that the CSA is receiving more requests for payments from new customers under the new system than the number of old requests that it can complete on the system. The backlog is growing month after month as people wait longer and longer for an assessment and, therefore, for money. Surely we will get to grips with that with the new computer system and the new law, and make sure that people start to receive the money to which they are entitled. The last I heard was that since the new system started in March 2003, 83 per cent. of assessments were accurate. The target is 90 per cent. Are we going to get that right any time soon?
The big question that hundreds of thousands of parents around the country ask all the time is when will the old cases be migrated on to the new system. I am beginning to feel confident enough to ask the Minister whether it will be this side of the general election? We have waited so long that I am beginning to wonder whether we will always be waiting. It is causing people huge concern. Some cases are on the new system, and some from the old system are transferred because they are linked to cases on the new system. Yet others cases are still on the old system, and there are sometimes great disparities—sometimes less is payable, sometimes more—between the amounts payable under the old and the new systems.
§ Mr. Drew
My hon. Friend is being generous with his time, as usual. 171WH A number of my constituents have found that, once they are on the new computer system, it works well only as long as the case is "fairly standard," but that if there are any problems and data are incorrectly entered, it is difficult to redeem that. That needs careful attention. There is nothing more frustrating than to find that the new system is just as bad as the old one. What is my hon. Friend's comment on that?
§ Mr. Kidney
That is part of the dispute with EDS about the way in which the system works. The involvement of a Member of Parliament or the independent case examiner should not be needed to get an individual's record straight on the computer system. People should by right have the correct information recorded about them, which I believe is the law of the land.
Hon. Members will remember that I mentioned the loud cheer at the meeting at people not being able to talk to the same member of staff twice. Why cannot we have decent customer handling at the CSA so that people can get answers to their questions? I was amazed by stories about the length of time that parents have spent in a day chasing people in different departments at the CSA merely trying to get an answer to which they are entitled. Some of those parents are busy and are desperate about having no money for their children. By the end of the day, they hardly have the energy or emotional strength to keep going, yet they have to keep going or they will fall by the wayside.
I also found at my meeting that few people knew about the independent case examiner, or that there is somebody to appeal to for help if everything goes wrong. I hope that we can review the information that the CSA gives in order to ensure that the independent case examiner becomes better known and friendlier to people with problems.
Two big messages came out of the meeting with Doug Smith. The first was that interim assessments and minimum payments are needed, so that parents quickly start to receive some money. The second was that payments should be collected through tax codings. Of course, there is an argument, which the hon. Member for Orkney and Shetland (Mr. Carmichael) raised in his intervention, that once we have gone that far down the road, why should not the Inland Revenue do the whole job. I will leave that argument to the Minister. People asked that at least the money should be collected through tax codings, so that instead of individual deductions from earnings, the amount that they owed would be stated on income tax records and collected. That could work as well for self-employed people as it could through PAYE under the same Inland Revenue systems.
The old system has been discredited, but people on the old system cannot get on to the new one. Even if they did, they would find that it is not working properly. That is not a very good story to tell, is it? Perhaps today will be the day that the Minister fights back and starts to rehabilitate the CSA, helping the 1 million people who currently interface with it.
I shall conclude by reading from an e-mail that I received from a woman following the meeting with Doug Smith. It is a page long, so I will not ask hon. 172WH Members to listen to it all, although all her comments are constructive. I shall quote just two paragraphs. First, she said:I sadly came away from the meeting with the belief that it will be all but impossible for it the CSA to collect regular maintenance for our son or even recover the debt as it stands currently and there were other parents at that meeting who will not doubt suffer the same.That is a bleak assessment. Secondly, she said:It seems, unfortunately, that no matter how good the intentions and no matter how strong the legislation, some absent parents will still manage to 'disappear' or 'use the system to their advantage' and their children will continue to suffer. However I remain optimistic than changes can be made to reduce that number.Given what happened at the meeting, what I have just said and what she said earlier in her message, why on earth should she be optimistic? I can say that she was impressed by Doug Smith's obvious sincerity. Modest though I am, I should add that she was also impressed by the fact that an MP was taking an interest in the case and was evidently working hard on it.
None the less, it is time that the Minister was on our side and promised to have regard to people's intense concerns for their children, to their distress at not being able to look after them as well as they would like, and to the welfare of those children as they grow up to become citizens of this country. The Minister must promise to change the way in which the CSA works and to change the law, so that payments can be properly enforced. We will then be able to tell that woman, "You were right to be optimistic."
§ Mr. Christopher Chope (Christchurch) (Con)
When I got back into the House in 1997, after a five-year enforced absence on the orders of the electorate, I found that one of the great changes that had taken place since 1992 was in the number of people who came to my surgery to complain about the Child Support Agency. That was a new phenomenon.
In the 1997 election, the Labour party, understandably, batted heavily on the assertion that the CSA was not working and a Labour Government would reform it. During the subsequent Parliament, quite a lot of time was spent developing new child support legislation, which was introduced in the Child Support, Pensions and Social Security Act 2000. People were told that the Act would introduce a simpler system, which would be fairer and easier to enforce and which would contain elements of justice that were lacking under the old system. Those of my constituents who were affected were very pleased at that prospect.
This timely debate—I congratulate the hon. Member for Stafford (Mr. Kidney) on securing it—gives us an opportunity to tell the Government, "You've been in office for more than seven years, and it's four years since the Act was put on the statute book, but you've let people down." The Labour party has indeed let people down in this respect. The Government are seeking new ways to interfere in our lives—consider, for example, the debate about obesity—but why can they not just put far more resources into putting right the things that they promised to put right? The CSA is one of those things, and the Government have manifestly failed to put it right.
173WH I shall not regale the Chamber with all my constituency cases. I do not believe chat it is the job of Members of Parliament to act as a back-up system when there is administrative failure in government. Too many of us have spent too much time on the phone to the CSA on behalf of constituents dealing with cases that should have been resolved ages ago through the administrative system. There is a real problem of enforcement. In many of my constituency cases, it is obvious that the father has been living at a given address for years, but the CSA enforcement team says that it is impossible to take action against him because he does not live there. I shall not go into the details of such cases, but they make the system look absolutely mad.
This Sunday is father's day, and I shall confine my remarks to the people who are on the old system, who were promised that they would be able to migrate to the new system and who are significantly worse off as a result of not being able to do so. Most, but not all, are fathers. Last Saturday, one such person came to my advice centre. He was very concerned about Fathers 4 Justice, but the example of injustice that he gave was that because he is not able to move on to the new system, he is paying about £100 a month more in maintenance payments for his child than he would if he was on the new system. Why should he and tens of thousands of others suffer as a result of the Government's maladministration? The system was set up under the orders of Parliament. If the computer system does not work, that does not absolve the Government of their responsibility to deal with the administration of the system—if need be, by clerical means.
People paying more than £100 a month extra have had no indication of when they will be able to get relief and equity by going on to the new system. I challenge the Minister to tell us when the new system will be able to accommodate the old cases. If he cannot do that, can he tell us why he regards it as fair and reasonable that people who still have to pay under the old system are obliged to pay more than £100 more than they would under the new system? Will he accept that those people are continuing to suffer financial loss as a result of his Department's maladministration?
The Library briefing to which the hon. Member for Stafford referred suggests that the Government have the power to get compensation from the providers of the IT infrastructure, but they have not exercised that power. Why, as a result of such manifest failure, should hapless parents—in most cases fathers who are on the old system—suffer while a very large company that has a Government contract is able to get away with failure because the Government do not bother to enforce their rights under the contract?
If the old cases cannot be brought onto the new system under the computer arrangements, why can they not be dealt with clerically under the new system? Why can calculations not be done for the old cases on the basis of the new rules? Surely that would be equitable. At the moment, claimants who would be better off under the new system than under the old can opt out of the old system. They can have a three-month gap, then apply again under the new system, which entitles them to enhanced benefits. However, those who have to pay more under the old system are not similarly able to opt out and to reapply under the new system. An extra element of injustice has been introduced.
174WH I hope that the Minister can come up with a proper answer to my questions today. I have no quarrel with the CSA staff, who seem to be under enormous pressure because of the system's manifest failure to deliver. However, I hope that the Minister will come clean about when he expects the old cases to be transferred to the new system, or when he intends to deal with them on the basis of the rules that apply to the new system, so that what Parliament intended to happen when we passed the legislation in 2000 does happen.
§ Mr. Alistair Carmichael (Orkney and Shetland) (LD)
I congratulate the hon. Member for Stafford (Mr. Kidney) on having secured this timely debate and on his speech. He said little that I could not confirm from my experience as an MP, but as a fellow solicitor I stand in awe of him for having achieved the magnificent feat of having two assessments overturned by the courts. In all my years as a solicitor, I never received an explanation of an assessment that I could understand, let alone challenge.
§ Mr. Carmichael
As the hon. Gentleman says, Scottish law is that much more complex. That is why we look to Scots lawyers to administer it.
The remarks of the hon. Member for Christchurch (Mr. Chope) were interesting. He seemed to think that the Child Support Agency had failed as a result of Government failings, but that the system had been set up under the orders of Parliament. It was set up under the orders of a Conservative Government who, of course, held a majority in Parliament. When discussing the CSA, it behoves all parties to approach the subject with a little humility because we all broadly agreed on its creation. I suspect that the subject was not given enough parliamentary scrutiny, which may be a lesson for us all.
The CSA is one of the most remarkable Government achievements of the late 20th century. As I said earlier, I was previously a solicitor before coming to this place; and prior to the creation of the CSA, aliment for children was determined by the courts. In all my years of sitting in sheriff courts and the High Court in Scotland, and the days spent waiting for things not to happen in the Court of Session, I would never have believed it possible to create a system that could make our legal system look efficient. Such is the achievement of the CSA.
The CSA has also started to have an effect on my constituency casework, because of the way in which family cases are being handled by the courts. In a couple of recent constituency cases—people have come to me in relation to family actions in the local sheriff court— significant orders have been made for aliment of the spouse. That jars with me because, given the circumstances, the orders were probably inappropriate. I suspect that many sheriff—sand doubtless judges elsewhere—are sufficiently acquainted with the difficulties associated with the CSA and, as a result, still make orders for aliment for the spouse because it is appropriate—they know that the family would not be able to obtain the money in any other way. That is a 175WH distortion of the system, because the order of the court is then subject to appeal; the action becomes much more protracted and much more bitter, as appeal follows appeal.
§ Mr. Drew
Increasingly, the problem with the separation of the courts is that parents, particularly fathers, see the lack of access arrangements as the only result of the operation of the CSA. The clear break between financial support and arrangements for care is a sad indictment of what has gone wrong. It is something that we would all support, but the waters are becoming ever more muddied. That makes the bitterness between the warring parties worse.
§ Mr. Carmichael
I thank the hon. Gentleman for that intervention. He is right; what he says accords with my understanding. Occasionally, one has to say, "Just because you are paying support for your children, it does not buy you any automatic rights in relation to them." However, the delays and inefficiency of the system tend to lead to the attitude outlined by the hon. Gentleman becoming more prevalent. If one looks at it from the families' viewpoint, the system is now militating against the family and making things that much more difficult. At the end of the day, we all know that it is the children who suffer most in such situations.
Others have spoken of the problems associated with the computer systems commissioned by the CSA. It does not seem to get any easier to deal with them. I had an interesting insight last Friday when a constituent came to my office in Kirkwall. She said that she was having a problem with the CSA and asked whether I could intervene on her behalf. She explained that the CSA had twice told her on the telephone that she was due a certain amount of money, and that it would be paid into her bank on a certain day. Each time, she made the journey of some 12 miles from her house into Kirkwall; she lives in a part of Orkney that, like many other parts of Orkney, is not well served by public transport. She went to her bank to find that the money had not been paid in and phoned the agency, which said that it had put a stop on it.
My constituent came to see me after that had happened twice. I phoned the MPs' helpline. As ever when one phones the helpline, I received a very good response from a very helpful individual who was clearly well trained and who understood the system. She explained that no more money was due to my constituent, but that the information shown on the screen for the case workers in question was inaccurate or, at best, misleading. That was why my constituent kept being given duff advice and why the agency kept setting up payments, telling her about them and then cancelling them.
To be honest, I did not quite understand why the computer system could not record accurate information, but an explanation was offered. I asked why a note was not put on the system to explain that the information was incorrect. I was told that that would be a very good idea but that unfortunately the system did not have a notepad. Surely that is the most fundamental point of an information technology system, and exactly the sort of point that should be addressed when IT 176WH systems are commissioned. It lends weight to my view that the CSA is a system under siege and that it has become so dysfunctional that it not only fails in its duty to the children and the families for which it was created, but it fails its employees. If the employees, the people at the sharp end, had been properly consulted, a notepad would have been attached to the new system because a notepad was attached 10 the old one.
The question of the migration of cases from the old system to the new one also continues regularly to present itself at my constituency surgeries. When the new system was introduced, I explained to my constituents that new cases would be entered on to it automatically but that existing cases would take time to migrate. My constituents are eminently reasonable people, and they did not quarrel with that. It is, however, increasingly difficult to tell then that they must still wait for their cases to migrate from the old system to the new one, particularly when there will be a significant cost saving to the individual concerned in several of the cases that present themselves at constituency surgeries.
Notwithstanding my remarks about not wanting to be partisan and wanting to approach the matter with humility, the fact that the Minister could not even say what date the Department for Work and Pensions had set for the migration of cases when I asked him about this during questions to the Department last week is frankly not good enough. That would have been acceptable a year ago, but we have had more than a year of the new system, and not even to be able to set the date for the migration of all cases to the new system suggests, as others have said, that this system will simply never be made to work. That is particularly ironic as the system was sold to Parliament as being so much simpler.
As I said, I was impressed with the hon. Member for Stafford, particularly when he said that he could not argue with the Liberal Democrat case for the abolition of the CSA and the transfer of its functions to the Inland Revenue. I do not I pretend that that will be a panacea. We are all aware that the Inland Revenue's dealings with information technology have not been straightforward either. That has been another substantial source of business at my constituency surgeries in the past. Nevertheless, if the experience of our present arrangement suggests integrating the system—particularly the cases that are difficult to enforce—with other aspects of government, all the relevant functions already rest with the Inland Revenue. Transferring the other functions would lead to that great goal of us all—joined-up government
It might take a great deal of doing. If we could, in considering a better way of going about things, maintain some of the consensus that we had on the need for a child support agency in the first place, we might be able to iron out problems rather than waiting for them to arise.
§ Paul Holmes (Chesterfield) (LD)
I, too, congratulate the hon. Member for Stafford (Mr. Kidney) on securing the debate, and echo the sentiments of my hon. Friend the Member for Orkney and Shetland (Mr. Carmichael); I agree with every word that the hon. Gentleman uttered about the failings of the Child Support Agency system, and especially his recognition of the logic of the Liberal Democrat position on the way to reform it.
177WH I agree also with more or less every thing that the hon. Member for Christchurch (Mr. Chope) said. The catalogue of points raised by the three hon. Members who have spoken so far is too familiar to anyone who takes an interest in the issue, and to every Member of Parliament whose constituency surgery has queues of such cases month after month.
The hon. Member for Stafford listed the horrendous problems and backlogs at the CSA with which we are all familiar. He described how Doug Smith of the CSA is very good at responding to cases that are raise, as are many of the staff. He also pointed out the problems over compensation payments, which now amount to a staggering £16.6 million over five years. Last year the figure was £2.5 million—five times the 1995 figure. Things in general are getting much worse, and my constituency casework file suggests that a fair bit of that money is coming to people in Chesterfield.
There is confusion at the CSA. Contradictory letters arrive, sometimes on the same day, but certainly within days of each other, giving different figures for payments, different addresses, the wrong address on one letter and the correct address two days later. Problems were outlined in tracking parents who repeatedly pop up in one job and disappear again. I agree with the point made by the hon. Member for Stroud (Mr. Drew) about problems with the armed forces. Sometimes they close ranks in response to requests to release information and help parents and the CSA to track down those who might be required to make payments.
Other problems were highlighted, such as the question of when cases will be transferred from the old to the new system. By and large most people will benefit from the change, although of course there will be some losers when cases are transferred.
It has been pointed out how good the CSA staff are when they deal with queries through the MPs' hotline. When I or my staff in Chesterfield contact the hotline we get excellent responses and quick solutions, sometimes to cases that have dragged on for years. That poses a big question. If the people at the end of the hotline can respond so quickly, effectively and efficiently that my Chesterfield files are full of thank you letters and cards from people who write, "After I tried for years to solve this problem, you sorted it in no time"—it was not me, of course, but the hotline staff—why cannot the general CSA staff provide the same standard of service to people when they first make contact with them, without going through their MP?
Why are there such long delays? Why is there such a history of incorrect data, incorrect letters and lost paperwork? If lost paperwork can suddenly emerge from the bottom of a pile or from a distant filing cabinet; if it can suddenly be found, within a day—sometimes within hours—of an MP making contact, why can that same level of service not be offered to the general public who make use of the CSA? Is it because, in general, the service is understaffed? If so, the solution is simple: employ more people. Is it because the staff are not motivated or well trained or paid enough?
What are the reasons why the general level of service is so poor while the staff can respond so quickly and efficiently to MPs? Is it because of some of the flaws in the regulatory framework, which were highlighted by the hon. Member for Stafford, or is it because the CSA 178WH is not proactive enough? It tends to take a passive approach, just sending out letters with no response when trying to chase up the parent who should be paying, but when an MP gets involved, it suddenly becomes much more pro-active. Why is it not like that all the time? Why does it not have simple casework-flagging systems on its IT system to flag up that there has been no response in a certain case and that something needs to be done about it?
Why do so many single parents—usually mothers, but not alway—shave to start acting as private detectives? I have spoken to parents who have been trying to track down their previous partner by going off to towns around Chesterfield to mark out where and in what sort of house they live and where they work. They are then told by the CSA that it does not know where their former partners live, whether they have a job or what their income is. Single parents are having to act as private detectives, doing the CSA's job because it seems to be passive in much of its approach. Despite that, if the CSA does not deliver the money that a parent needs, under the legal ruling referred to earlier they cannot appeal against the failure of the CSA and the Government to look after their interests and implement the Child Support Act 1991, which came into effect in 1993.
Is the failure due to understaffing, a lack of training or the pay and motivation of the staff'? Is it down to regulatory problems, an agency attitude of being passive rather than proactive, or the computer problems that we have heard so much about? Like many aspects of the Government's outsourcing of IT in the past few years, the computer system has been an absolute disaster. EDS was paid £450 million to deliver a system, which has failed miserably. It was supposed to be introduced in October 2001 but was actually introduced in March 2003, and it still does not work properly. Staff will often have to tell callers that the computers are down or use simple, cheap pocket calculators to fill the gaps in what is a £450 million IT system.
Why is that the case? Unfortunately, it fits in with too many examples. I serve on the Education and Skills Committee, and one of our first inquiries after the 2001 election was into the failures of the individual learning account scheme. There were failures on the Government side in drawing up the specifications, but the performance of Capita in that case, having been paid a lot of money to deliver an IT system that failed in almost every respect, was appalling.
When we ask the Government what penalty payments are applied to such companies for absolute failure to deliver the goods that they are well paid for, we tend to be told simply that commercial confidentiality means that they cannot say. That is not good enough. Huge sums of taxpayers' money have been spent on systems that fail to deliver. I understand that the Treasury may have decided not to outsource Government IT projects any more. I would welcome a comment from the Minister on that, because it certainly seems to be the lesson of so many Government experiments.
We have already heard comments and questions about when the old and new systems will be merged. About 75,000 parents are working on the old system, on which they do not get the £10 child maintenance premium. They could live next door—two yards away—to a similar lone parent, who receives that payment 179WH because they are registered on the new system. That is not good enough, and there seems little logical explanation of why we cannot make that simple transfer, even if other areas of the switch to the new assessment system are too complicated for the computer to cope with initially.
Two different systems are working alongside each other, but neither works properly. Despite repeated questions in Parliament, including as recently as the seventh of this month, we have heard no hint or indication from the Minister about when the Government think that they can transfer people from the old to new system. The hon. Member for Stafford asked whether they were thinking about making the change after, rather than before, the next general election. So many parents throughout the country want to know why we cannot switch to the new system.
I want to leave the Minister as much time as possible in which to reply, so I conclude by summarising some of the questions that have been asked, and hope that he will address each one of them. What penalties are being imposed on EDS for its abysmal failure to deliver, at great cost, an IT system that actually works? When will the old cases be brought into the new system? Would the systems work better if more staff were employed? MPs' questions about cases that have waited a year or two to be sorted out can usually be dealt with in the same day. Are more staff needed to provide the clients out there with the same response that MPs receive? Do staff need to be trained better? We have heard about the constant rota of staff and the fact that one speaks to a different person every time one calls. Do people leave too quickly and if so, why? Do they leave because they are demoralised, because of the conditions under which they work or because of pay? What does the Minister think causes such staffing problems? When will we have a working computer system?
Finally, to return to the Liberal Democrats' welcome proposals on how to get out of the current mess, why do the Government refuse to consider transferring the functions of the CSA to the Inland Revenue? The CSA seems to have to spend so much time asking questions of the Inland Revenue, which has taken on that passive role. Until the CSA asks, "Do you know where this person is and how much they earn?", nothing happens. There is a big gap in the system. The system could be transferred to the Inland Revenue, which already has most the relevant information on tap. The Revenue knows where people live, where all the families with children are and how much people earn through the pay-as-you-earn system. Why do the Government refuse even to consider what appears to be a simple transfer of responsibility from one department to another?
§ Mr. Nigel Waterson (Eastbourne) (Con)
I also begin by congratulating the hon. Member for Stafford (Mr. Kidney) not only on securing this debate, but on his dogged pursuit of his own Government over the CSA's failings.
I am sure that we have all had endless constituency cases that touch on the issues that have been raised. What has happened is a very sorry tale. The 180WH introduction of a new formula that was supposed to import simplicity, speed and fairness has been badly undermined by sloppy planning, poor implementation and unreliable technology—on any view, an extraordinary catalogue of problems, delays and incompetence.
I should like to focus on two issues. First, investigation and enforcement—or the lack thereof—is, for many constituency Members, including me, the most frustrating aspect in many cases. As the hon. Member for Chesterfield (Paul Holmes) said, the poor wife or ex-wife often has to take on the role of a private detective. Even when hard evidence is available, the CSA does not act upon it. That is a frequent theme in my surgeries. Secondly, there are problems with the IT system, which has fallout on real people. To put the matter in context, we should remember that the new formula was supposed to have been introduced for all new cases from April 2002, but finally went live a year later, in April 2003.
Rather memorably, in giving evidence to the Select Committee on Work and Pensions, of which I am a member, Mr. Doug Smith, who has featured a lot in this debate, said:There is a big differ( nce between a failed computer system and a computer system that has more teething problems than we expected.If that is a distinction, it is probably lost on the constituent whom the hon. Member for Orkney and Shetland (Mr. Carmichael) described, for example, as well as on many more of our constituents.
As my hon. Friend the Member for Christchurch (Mr. Chope) eloquently pointed out, between 800,000 and 900,000 cases are stuck on the old system for calculating child maintenance. That means that non-resident parents pay more than they might otherwise have to if they were assessed under the new rules. That is an ongoing unfairness, not least because the Government have apparently set their face against compensating such parents in the future. EDS, the company involved, plans to have CS2, as the system is known, in place and ready by October 2004. It is hoped that migration of the old cases can commence thereafter, and that we will hear from the Minister on the matter.
In November, in a debate in Westminster Hall, the self-same Minister declined to give a view on the timing of the transfer. We are now several months further down the road; we know that for some time, Mr. Smith and EDS have been working on a remediation plan, as it is called. A few days ago, in answer to a question, the Minister said:No. We have not set a date."[Official Report, 7 June 2004; Vol. 422, c. 18.I gently suggest that the time has come to do so. It might be five years, two years or even six months down the road, but in fairness to all hon. Members' constituents, they deserve to know the date, not least because the Government take the rather rigid view that until all the problems are sorted out they will not remove a single one of the 800,000 or 900,000 old cases. The Financial Times referred to the matter asone of the biggest failures to hit the public sector IT project in recent years.".It stated that less than half the 321,522 applications submitted since March 2003 have been processed. 181WH There have been ongoing and probably all-too-regular discussions with the contractors, EDS, and it would be helpful if the Minister could tell us how far those discussions have gone, within the bounds of genuine commercial confidentiality. What is the position in terms of retentions from the contract and its overall cost?
The position is still pretty grim in respect not only of old cases, but of some new cases. Figures produced a little while ago, which may need updating, show that 384,000 parents with care were entitled to receive child maintenance, but 79,000 received no payment at all and 193,000 received less than they were entitled to. If one adds almost £3 billion in unpaid maintenance payments, one begins to see the extent of the problem.
One would have thought that part of the attraction of introducing a new computer system was that it would make things cheaper, but according to recent figures shown in Hansard, the average cost of processing an application has risen by £12.63, or more than 16 per cent.
In giving evidence to the Select Committee recently, the Secretary of State talked about the recovery programme that had been put in place. He said that the system was retrievable or, in other words, that it can be made to work properly instead of being scrapped. That caused some excitement in the Select Committee. When the Secretary of State was pressed as to whether he was seriously considering scrapping the project, he replied:If it could not be made to work properly you would not have an alternative, would you?We can all agree with that. We need to know where we are with the recovery plan.
The final irony is that the system is not working properly even in dealing with new claims. Some of the figures show that the CSA cleared only 47 per cent. of all new cases received since March 2003. By the end of the first year, about 153,000 cases had been cleared, leaving a backlog of 170,000. We have already heard that redress payments to dissatisfied clients have ballooned to more than £4 million in 1999, settling down to an average of £3 million or £2.5 millior ever since.
It beggars belief that so little enforcement action has been taken against people who make a life's work of evading payment for their responsibilities. The latest information is that in the first seven months of 2003, some 150 cases were referred to court for committal to prison or the removal of a driving licence. A total of five driving licences were removed and 45 parents were committed to prison. If we are to put the fear of God into persistent evaders, with whom we have become familiar since the CSA was established, that is not good enough.
In conclusion, I shall set out the serious questions that still need to be answered by the Minister. First, the latest estimate of the cost of the new system is £456 million. Is that still accurate or has it gone up again? Secondly, what is the current position for contractual penalties on EDS, such as retentions and any other penalties that may have been paid or may be payable in due course? Thirdly, has any further consideration been given to compensation for those affected by delays in migration of old cases? Fourthly, when will these old cases finally be migrated? That is the key question. As the hon. Member for Stafford said, it is not merely a case of being 182WH able to tell constituents that there is light at the end of the tunnel; we need a rough idea of how long the tunnel is. Fifthly and finally, what is the future of the contract and of EDS; are Ministers still seriously considering scrapping the project all together?
§ 3.6 pm
§ The Parliamentary Under-Secretary of State for Work and Pensions (Mr. Chris Pond)
I congratulate my hon. Friend the Member for Stafford (Mr. Kidney) on securing a debate on a subject that is so important to the lives of so many children. He rightly said that it is all about the welfare of children. He also underlined the fact, which we must all keep in perspective, that parents have a responsibility to support their children. Whatever the successes or failings of the CSA, the House must send out the message that it is the responsibility of both parents to support their children. If they do not do so, we will take every possible measure to ensure that they do.
My hon. Friend began by pointing out the mess that the system that we inherited was in. In 1998, when we issued the Green Paper, "Children First: a new approach to child support", the taxpayer was supporting 1.8 million children. Seventy per cent. of lone mothers on income support were seeking to avoid a child maintenance application, and a third of all child support assessments took more than six months to make. Until then, the 1993 child support scheme had been modified through many small measures introduced at frequent intervals. As efforts were made to make the scheme more comprehensive, an already complex system became more opaque to hon. Members, their constituents and Child Support Agency staff themselves.
We believed that radical change was needed and some changes were introduced in January 2001. However, the bulk of the changes had to wait until the delivery of the new computer and integrated telephony systems. In the interim, there were performance improvements in the old child support scheme, but the step change needed to achieve the level of effectiveness that the public deserved could be delivered only through the introduction of a new scheme.
That new scheme started on 3 March 2003—both for applications for new cases where liability began on or after that date, and for old scheme cases linked to them. Since then, because of the well known problems with the computer system, the level of service that we have given to some agency clients has fallen well short of what they are entitled to receive. For that, I offer my unreserved apologies.
However, constituency MPs cannot always get a true picture of the situation. Matters can be complex when families break down. Constituents rarely come to tell us when things are going right and there is good news. However, each week, thousands of cases are cleared effectively under the new system. Almost 110,000 new scheme maintenance calculations have been made, some 41,000 non-resident parents have started to pay maintenance using the agency's collection service, and some 22,500 parents with care have started to get child maintenance premium income disregard in their benefit. That is a new measure that means that, for the first time, parents with care on benefit can see a real improvement 183WH in their living standards as a result of payments made by non-resident parents. It also means that if they move in to work, those maintenance payments are completely ignored.
Because the new scheme is so much easier to understand, parents are better able to make their own arrangements without involving the agency. Indeed, the interactive calculator on the agency's internet site had more than 25,000 hits in March. Some hon. Members have said that it is a disgrace that people have to make their own maintenance calculations. However, the problem under the old system was that it could take a calculation involving up to 100 elements to determine what the payment should be. It was almost impossible for either parents with care or non-resident parents to work out what the maintenance should be. They had to wait for the agency to go through that process and, while they waited, the arrears built up.
The new child support scheme is starting to make a real contribution to our ambitious target of reducing child poverty. It has not yet gone far enough; it has certainly not gone as far as any of us in this Chamber should like to see it go, but we are moving steadily in the right direction. I will not pretend that my ministerial colleagues and I have not been disappointed with the progress so far. However, we are making progress and clients and staff have said that the new scheme works. When it works, it works well and they like the simplicity and transparency.
Many hon. Members have raised concerns about the payment of child support. The subject, rightly, continues to be of interest to many in this House, and I hope that that will continue. Under the old scheme, nonresident parents often failed to meet their legal obligations to pay the money that the agency had assessed that they should pay. One of the main reasons for the build-up of debt under that scheme was the fact that making the assessment took so long. However, in the five years up to March 2003, when the new scheme started, the agency increased collections by 43 per cent. to £175 million. The intention of the new scheme is to prevent debt from building up. That is one of the reasons why we want there to be a simple calculation mechanism that is not only easy for people to understand but makes it clear to those on both sides what their obligations are. Because of its transparency, it is more acceptable and is seen as fairer and more just to both sides.
However, we do not intend to focus solely on the calculations. We have to ensure that the money flows to the children. Obtaining compliance is part of the work of a large number of the agency staff. The culture is changing and, at all stages of a case, staff take action to ensure that non-resident parents accept their responsibility and comply with the maintenance calculation. Even before that point, staff encourage non-resident parents to make voluntary payments to the parent with care while they are waiting for a calculation to be made, thereby preventing debt from building up in the first place.
If we want a message to go out from this debate, it is that non-resident parents who seek wilfully to evade their responsibilities, not to the Government or to hon. Members or even to parents with care but to their 184WH children, will not continue to get away with it. We have more powers and more professionally trained staff, and we are increasingly using those powers to ensure that people meet their obligations. We have to be realistic. Some parents will fail to pay—
§ Mr. Russell Brown
All this sounds fine, but I have a constituent who has gone to appeal and won her case on three occasions. It was deemed that her partner had diverted his income. Six years on she is still waiting: she has not received a single penny. This guy can buy properties costing £250,000 and have two or three holidays a year. That is unjust. Something as simple as removing his driving licence would make a world of difference.
§ Mr. Pond
I certainly agree with my hon. Friend that it is quite unacceptable that in such circumstances certain individuals wilfully refuse to make the payments that their children need. The agency has the powers, and we are seeking much more prompt and effective action to deal with that That includes the withdrawal of driving licences, as my hon. Friend has said. Some 21 driving licences have been removed so far. That is not a huge number. There is also committal to prison. [Interruption.] Conservative Members laugh. They did not introduce any of those measures themselves when they had the opportunity to do so, but they giggle when we talk about the legislation that we have introduced.
Even though such measures are a last resort, we are determined to use them when non-resident parents will not make contributions. It is often the threat of a sanction that results in the payment of maintenance, but the agency does not shy away from taking action if the threat does not work. If there are cases that my hon. Friend the Member for Dumfries (Mr. Brown) and others wish to bring to my attention or to the attention of my right hon. and noble Friend Baroness Hollis of Heigham, we will happily look at them to see whether anything further can be done to bring justice to the children concerned
Concern has been expressed about the self-employed. Since March 2004 the agency has increased the number of staff working on that group. In the year to March 2004 there was a 24 per cent. increase on the previous year in the number of cases referred to bailiffs. As I have said, in cases where the non-resident parent persists in wilful non-compliance, the courts can take away driving licences or commit a person to prison. We have to ensure that the courts also recognise the seriousness of the wilful non-compliance. I hope that increasingly they are doing so.
In 2003–04, 324 cases were referred to the courts for committal to prison or withdrawal of driving licences. Eight non-resident parents were served prison sentences. The aim is to get the money flowing to the children. From our point of view, it is a failure if we have to commit people to prison or take away their driving licences. We want to ensure that the children get the money that they deserve.
I am aware that hon. Members have particular concerns about self-employed non-resident parents. Theirs are the cases that regularly reach our postbags and make for media headlines. Recovery of money owed by self-employed people is notoriously difficult. It is not 185WH just a problem for the Child Support Agency. Liberal Democrat Members suggest that we should simply pass the matter to the Inland Revenue, but it faces similar problems in collecting tax and national insurance contributions from such people. We are constantly considering whether we need to amend working practices to deal with child support avoidance and evasion. If it becomes clear that we need to change the regulations, we will consider that seriously too.
§ Mr. Kidney
My hon. Friend will recall that I said that I supported the philosophy of the simpler assessment process so that more staff can spend more of their time on enforcement issues. I welcome what he says. I am sure that we will come on to the computer system, which is getting in their way at the moment. Does he agree that, once we have seen an end to that problem, staff can be much more alert to collecting the interim payments—to enforcing payments, including those against the self-employed? Does he agree that powers such as charging orders and what are now called third-party orders—they used to be called garnishee orders when I was a lawyer—be used much more productively to ensure that even the self-employed pay up?
§ Paul Holmes
The Minister says that the Inland Revenue would have the same problems as the CSA in collecting the money. However, will he comment on the fact that in the most recent year the inland Revenue has collected more than 91 per cent. of the taxes that are assessed as owed, whereas the CSA will probably write off a quarter of the £500 million that is currently outstanding? The CSA therefore hopes to collect 75 per cent. It has already written off £2 billion of uncollectible money.
§ Mr. Pond
Yes, it is true that the Inland Revenue has a very high success rate in collecting money that is owed to it. I pay tribute to its success In this instance, however, we are talking about a particular group of people—self-employed non-resident parents—with whom the Inland Revenue itself has some difficulty dealing. We must get things into perspective for both groups, because only 6 per cent. of non-resident parents are self-employed. They are particularly difficult to deal with, whether the Inland Revenue of the CSA is dealing with them.
I do not want the hon. Gentleman to run away with the idea that if we were suddenly to give all this work to the Inland Revenue or, indeed, to the courts, as his hon. Friend the Member for Orkney and Shetland (Mr.Carmichael) suggested—[Interruption.] I apologise; I have misquoted the hon. Gentleman.
§ Mr. Carmichael
I am grateful for the Minister's acceptance that he has misquoted me. I merely said that the current system had been administered in a way that makes the courts look efficient. Does not he accept, however, that the beauty of giving the work to the Inland Revenue is that it already has the information in 186WH its remit, so it is readily accessible to it? That is the difference between the Inland Revenue and the current system.
§ Mr. Pond
I thank the hon. Gentleman for two things. First, he has clarified the fact that there seems to have been a policy change. My understanding was that he was very much in favour of the idea of returning to the complexities of the old court system. Perhaps the hon. Member for Chesterfield (Mr. Holmes) would like to join him in that. If that is not the case, I would certainly welcome it. We can get that out of the way. [Interruption.] That is fine; he has clarified his position, and I am pleased to know that. Secondly, the hon. Member for Orkney and Shetland has given me the opportunity to make it clear that we will pursue the proper payments from that group and others through all the measures that are available to us.
Hon. Members rightly asked when old scheme cases will be transferred to the new system. The hon. Member for Eastbourne (Mr. Waterson) reminded the Chamber that I stood in this very position back in November and was asked the same question. I will give him the same answer: the new scheme is more straightforward than the old one, but that does not mean that we have a simple IT system. Complexities arise in several areas, which result in the need for detailed IT solutions. For instance, for the first time we have an interface with Jobcentre Plus and its old IT systems, which enable data to be shared more easily between the two organisations. As the hon. Member for Orkney and Shetland said, the Inland Revenue has this information. We increasingly have the ability to share that information between different institutions, but that means that we have a complex system to deal with.
We have acknowledged that there have been problems in getting all this to work properly. The IT contractor—Electronic Data Systems—is working closely with the CSA to bring the performance of the system into line with expectations. The agency now has an IT recovery plan from EDS; work to stabilise the system has begun this year, which has already brought about improvements. I can tell hon. Members, in response to their questions, that we are withholding 15 to 20 per cent. of the payments to EDS, to take account of non-delivery under the contract.
I cannot say when cases from the old scheme will be transferred to the new one. We are keen that all parents who deal with the agency should be able to benefit from the reforms, but it would be irresponsible for us to move cases across to the new scheme before we are satisfied that the IT is able to cope and is working well.
§ Mr. Carmichael
If the Minister will not set a date for migrating the old cases to the new system, will he at least set a date beyond which it will be considered that further delay will lead to palpable unfairness, for which people will be compensated?
§ Mr. Pond
We want everyone to move to a system that we believe to be simpler and more just, but I am sure that the hon. Gentleman will find that for every non-resident parent or parent with care who wants to move across to the new system, there will be an equivalent non-resident 187WH parent or parent with care who would rather stay where they were. Inevitably, there will be swings and roundabouts.
§ Mr. Waterson
I am, of course, disappointed that the Minister has failed to set a date. However, can he at least confirm whether Ministers are still committed to the EDS contract, or is the Department still discussing scrapping it altogether?
§ Mr. Pond
We are working closely with EDS—we want this system to work. We want to ensure that the new system and the advantages that it brings reach as many parents with care and non-resident parents as possible. Frankly, the best and quickest way of doing that is to ensure that the system that we now have will work. EDS and the CSA are working on the recovery programme.
§ Mr. Kidney rose—
§ Mr. Chope rose—
§ Mr. Kidney
I am grateful to my hon. Friend for giving way. The important thing is not who benefits or loses from the transfer, but the gains that will be achieved by the CSA staff in doing their job better. If my hon. Friend cannot set a date for when the migration will take place, can he tell me whether the Department has set a date by which EDS must prove whether the system works?
§ Mr. Pond
I think that the system is moving towards a position where it is working, but we all know that it is 188WH not working well enough. We need to ensure that we work day by day and week by week to make it work properly. If I were to set arbitrary time scales, that would not help the children, parents with care and nonresident parents wt o need to see that the system works properly.
§ Mr. Pond
I will not give way again. Hon. Members will agree that I have been fairly generous in doing so; that has inevitably meant that I have had to answer many of the questions raised in the debate in my responses to their interventions.
As hon. Members will know, transitional arrangements will apply to cases once they have been converted to the new scheme. That will allow parents to plan their arrangements and to adjust to the changes in their finances. Until cases move on to the new scheme, their old scheme liability remains payable.
Once again, I apologise to those parents with care and non-resident parents who have not received the standard of service that they have the right to expect. I have said that my noble Friend Baroness Hollis and I take an active interest in ensuring action in problem cases. Along with the agency's chief executive, we are happy to look at cases that hon. Members feel are unresolved.
I shall have to respond in writing to hon. Members on some of the specific points raised in the debate. However, I want to end my remarks by responding to the point made by my hon. Friend the Member for Stafford. He asked me, as the Minister, to show that I was on the side of hon. Members in the debate. I tell him that not only am I on the side of hon. Members but, more importantly, I am on the side of those children who need the support of a reformed child support system, which we are determined to deliver.