Recommendations & Conclusions
15 items
2
Recommendation
Ninth Report - Child Maintenance
Rejected
The Department has displayed insufficient curiosity around the needs of some of the most vulnerable separated families and their children. Take-up of the Department’s CMS scheme is substantially lower than it expected. An estimated 18% of separated families used the CMS scheme in 2019–20, compared to an expected 33%. As …
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The Department has displayed insufficient curiosity around the needs of some of the most vulnerable separated families and their children. Take-up of the Department’s CMS scheme is substantially lower than it expected. An estimated 18% of separated families used the CMS scheme in 2019–20, compared to an expected 33%. As a result, there may be around 350,000 parents with caring responsibilities who do not have a child maintenance arrangement but would like one. The Department’s research shows that the lowest-income households are most likely to have no form of child maintenance arrangement. Some 39% of surveyed separated parents who were either not working or were economically inactive had no child maintenance arrangements in place, compared with only 21% of those who were working. Some ethnic groups, including Black parents, also appear less likely to use the statutory scheme but the Department has no plans to look into why this 6 Child Maintenance is the case. The Department’s customer satisfaction survey for the scheme excludes non-English speakers, meaning the views and experiences of this group are not represented. We welcome the Department’s commitment to raising awareness of its CMS scheme and other services, but we are disappointed that this had not happened sooner and are not convinced that its current approach focuses enough on why take- up is lower amongst specific groups. Recommendation: The Department should: • within one year, develop a clear action plan to assess, tackle and monitor the ‘take-up gap’ between the number of separated parents that would benefit from using its statutory CMS scheme (and other relevant support services) and those that actually use them; and • to support this, undertake more inclusive research to understand its customers and users of its service. It should ensure people who do not communicate in English are included in its research and establish why under-represented groups, such as some minority ethnic groups, seem less like
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Government response AI summary
The government disagrees with the recommendation, says it has improved diversity information collection, undertakes surveys in multiple languages, and sees no need for new research given the increase in demand for CMS.
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HM Treasury
4
Recommendation
Ninth Report - Child Maintenance
Rejected
The Department has not taken responsibility for detecting child maintenance fraud, instead shifting this responsibility onto its customers. The Department asserts that it does not treat tackling child maintenance fraud, where children often suffer as the end user, with any less enthusiasm than it does tackling fraud against the taxpayer. …
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The Department has not taken responsibility for detecting child maintenance fraud, instead shifting this responsibility onto its customers. The Department asserts that it does not treat tackling child maintenance fraud, where children often suffer as the end user, with any less enthusiasm than it does tackling fraud against the taxpayer. However, its approach does not appear to reflect this sentiment. It has not assessed the risk or actual level of fraud and error within child maintenance in the way that would be required if it was public expenditure, and its approach to fraud detection relies almost entirely on receiving parents challenging the value of maintenance assessments. This last point means that if a paying parent is notified that they are under investigation for allegedly understating their income there is a risk that they will know or suspect that their ex-partner has reported them. It would therefore be understandable that many receiving parents would be reluctant to come forward with such reports, particularly if it is not clear what the outcome will be. The Department says that, in 91% of cases, it can rely legally on historical earned- income data from HMRC and its own benefits data to assess people’s earned income and benefit status, and also plans to update legislation to include unearned income information held by HMRC in the initial calculation. Nonetheless, the Department accepts that child maintenance is still vulnerable to certain types of customer fraud and error, such as misdeclaration of personal circumstances that affect the award but are not related to income, or the 9% of cases where it cannot rely on historic tax or benefit records. Whilst we welcome a proportionate, iterative approach to tackling fraud and error, the Department’s current approach risks seriously underestimating its susceptibility to fraud and ignoring the various good reasons why parents may not raise concerns about fraud. Recommendation: The Department should take res
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Government response AI summary
The government disagrees with the recommendation to take responsibility for detecting child maintenance fraud, stating it already has proportionate and cost-effective controls and a fraud strategy in place.
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HM Treasury
5
Recommendation
Ninth Report - Child Maintenance
Rejected
The Department is too willing to blame low levels of customer satisfaction on CMS customers being difficult to please, despite its own systemic customer service failings. It is disheartening that customer satisfaction is no better now than it was under the failed CSA and that less than half (46%) of …
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The Department is too willing to blame low levels of customer satisfaction on CMS customers being difficult to please, despite its own systemic customer service failings. It is disheartening that customer satisfaction is no better now than it was under the failed CSA and that less than half (46%) of customers report they are satisfied with the service they receive. Given that the CMS scheme was 8 Child Maintenance set-up to replace an agency whose customer service was generally considered to be diabolical, it is unacceptable that the Department has not put in place a robust method for objectively assessing whether it is providing a reasonable level of service. In explaining low levels of customer satisfaction, the Department emphasises the challenging nature of its caseload and areas where it has improved its performance, such as payment accuracy. However, CMG receives by far the most complaints, and the most upheld complaints per 1,000 customers (1.15), of any of the Department’s business areas, suggesting fundamental issues with the way it handles customers’ concerns. Despite the large number of complaints upheld, the Department is less likely to uphold complaints relating to child maintenance (around one in three are upheld) than it does for other service areas. It told us this is because of the nature of CMG’s caseload. However, child maintenance accounts for a disproportionately high share of all rejected complaints subsequently investigated and upheld (or partially upheld) by the Department’s Independent Case Examiner, suggesting that the Department may be incorrectly rejecting some complaints. Recommendation: The Department should use its digital transformation to develop performance indicators that enable it to fully understand why customer satisfaction is so low, and target improvement where data suggests there may be an underlying service issue, for example: where high numbers of complaints are upheld. The Department should also, within one year, review Ch
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Government response AI summary
The government disagrees, stating that the Customer Experience Directorate actively invests in reviewing cases upheld by the Independent Case Examiner (ICE) to identify and implement service improvements, and will continue to utilize existing ICE publications to inform lessons learned.
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HM Treasury
8
Recommendation
Ninth Report - Child Maintenance
Rejected
The Department has repeatedly failed to achieve savings targets for the child maintenance scheme over the past decade and again risks overpromising on the benefits of its current transformation programme. The Department has reduced the cost to the taxpayer of administering child maintenance by £172 million from £494 million in …
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The Department has repeatedly failed to achieve savings targets for the child maintenance scheme over the past decade and again risks overpromising on the benefits of its current transformation programme. The Department has reduced the cost to the taxpayer of administering child maintenance by £172 million from £494 million in 2011–12, to £322 million in 2020–21, in line with its smaller caseload and new income from charging. However, the Department has failed to deliver on its promised efficiency savings. The amount of money it needs to administer child maintenance remains £88 million higher than the £234 million promised by the Department in its 2013 Business Case. In addition, the cost to administer the return of £1 of maintenance payments has increased from 35p in 2011–12 to 36p in 10 Child Maintenance 2020–21. The Department has high hopes for its £30 million digital transformation programme and aims to further reduce annual costs by £128 million (40%) to £194 million for 2024–25 whilst improving both compliance and customer service. However, given the Department’s track record, we are not optimistic about the prospects for this latest programme. Recommendation: As part of its Treasury Minute response, the Department should set out new cost-effectiveness and wider value for money targets against which it can be held to account. Child Maintenance 11 1 The child maintenance landscape
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Government response AI summary
The government disagrees, stating their Transformation Programme introduces changes to improve efficiency and automation. They report performance in Annual Reports and Accounts, and regularly review services and programmes to ensure value for money.
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HM Treasury
1
Conclusion
Ninth Report - Child Maintenance
Rejected
On the basis of a report by the Comptroller and Auditor General, we took evidence from the Department for Work & Pensions (the Department) about child maintenance in Great Britain.1 We also received and considered written evidence from individuals and organisations from within the sector.
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On the basis of a report by the Comptroller and Auditor General, we took evidence from the Department for Work & Pensions (the Department) about child maintenance in Great Britain.1 We also received and considered written evidence from individuals and organisations from within the sector.
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Government response AI summary
The government disagrees with the Committee’s recommendation, stating that the Department for Work and Pensions (the department) has a clear interest in how child maintenance is integrated into wider government policy, and it intends to continue to discharge this working with other government departments.
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HM Treasury
9
Conclusion
Ninth Report - Child Maintenance
Rejected
The Department also told us that some issues identified with the integration of child maintenance were the result of legislation. For example, the rates for calculating child maintenance are outlined in legislation and mean that some paying parents on Universal Credit may see that as their earnings increase the resulting …
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The Department also told us that some issues identified with the integration of child maintenance were the result of legislation. For example, the rates for calculating child maintenance are outlined in legislation and mean that some paying parents on Universal Credit may see that as their earnings increase the resulting change in improvement in their disposable income is significantly reduced. This is because the combined effect of increases in their child maintenance payment, council tax reductions and reductions in their Universal Credit award can create ‘effective marginal tax rates’ of up to 100%. The Department also told us that child maintenance legislation means it cannot take partial deductions from the Universal Credit award to repay child maintenance arrears.13 Take-up and outcomes for the most vulnerable separated families and their children
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Government response AI summary
The government disagrees with the committee's recommendation, stating it cannot detail plans to review the affordability of liabilities due to policy decisions, but is considering its plans and will update the Work and Pensions Committee.
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HM Treasury
12
Recommendation
Ninth Report - Child Maintenance
Rejected
The Department does not know whether all groups of parents find CMS equally accessible or whether CMS produces different outcomes for different groups. The Department’s research found that low-income families, those with disabilities, and those with higher levels of parental conflict, appear more likely to have no arrangement in place. …
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The Department does not know whether all groups of parents find CMS equally accessible or whether CMS produces different outcomes for different groups. The Department’s research found that low-income families, those with disabilities, and those with higher levels of parental conflict, appear more likely to have no arrangement in place. For example, in 2021, 39% of separated parents who were either not working or were economically inactive had no child maintenance arrangements in place, compared with 21% of those who were employed or self-employed. Similarly, over a third (34%) of separated parents whose children had special education needs or a disability (SEND) had no arrangements, compared with less than a quarter (23%) of children who did not have SEND. The Department believes that it does not require information on parents’ protected characteristics to run its CMS scheme and has no information about the ethnic background of 25% of receiving parents, or 49% of paying parents. 13 Qq 84, 104 14 C&AG’s Report, para 1.11 15 Q 10; C&AG’s Report, para 1.22; The Department’s published Child Maintenance Service statistics: data to September 2021, section 5 for caseload information. 16 Qq 2, 11 14 Child Maintenance
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Government response AI summary
The government disagrees with undertaking more inclusive research to understand customers and users of its service because improvements have already been made to collect diversity information, and given the increase in demand for the CMS, they do not see the need for new research at …
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HM Treasury
13
Recommendation
Ninth Report - Child Maintenance
Rejected
The NAO found that parents from some minority groups, such as Black, African, Caribbean or Black British parents, are less likely to use the CMS scheme. However, the Department has not conducted research into why this might be or whether there is any indirect racial discrimination.17 Race is a ‘protected …
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The NAO found that parents from some minority groups, such as Black, African, Caribbean or Black British parents, are less likely to use the CMS scheme. However, the Department has not conducted research into why this might be or whether there is any indirect racial discrimination.17 Race is a ‘protected characteristic’ and under the Public Sector Equality Duty, which came into force in April 2011, public authorities are required, among other duties, to advance equality of opportunity between persons who share a relevant protected characteristic and persons who do not.18 However the Department told us that it had no plans to do any research into why take-up is lower amongst certain groups, and that its focus was on increasing general awareness of the CMS. We were therefore not convinced that the Department’s approach focuses enough on why take- up is lower amongst specific groups, such as Black women and were concerned that this was indicative of a lack of curiosity on the Department’s part. The Department informed us that it needed to increase the ethnicity declaration rate (which it reports as 75%) to improve the data on which it could base analysis, and would reflect on whether it has any plans to make it higher.19 We raised concerns that the Department excludes certain types of customers, such as non-English speakers, from its customer satisfaction research on its CMS scheme ‘for practical purposes’. The Department told us that it would take away our request to commit do some research that includes non-English speaking parents, including on why they may not use the service.20 17 Qq 22–23; C&AG’s Report paras 1.23–1.24 18 Comptroller and Auditor General: Employment Support- Kickstart, session 2021–22, 26 November 2021, HC 801. Footnote 32 to paragraph 3.12 19 Qq 23–31; C&AG’s Report, para 1.24 20 Qq 77 and 78; The Department’s published Child Maintenance Service Client Satisfaction: Background information and methodology, December 2016, page 3. Child Maintenance
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Government response AI summary
The government disagrees with the recommendation, citing improvements to diversity information collection and an increase in demand for CMS, making new research unnecessary at this time. They will undertake further internal analysis if demand stabilises or subsides.
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HM Treasury
17
Recommendation
Ninth Report - Child Maintenance
Rejected
Despite child maintenance having the highest rate of complaints within the Department, the Department upholds a lower proportion of complaints relating to child 21 Qq 124–125; C&AG’s Report, paras 5, 1.14, 3.10 22 C&AG’s Report, para 3.11 and 3.12 23 Q 125 24 C&AG’s Report, Figure 18, para 3.18 25 …
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Despite child maintenance having the highest rate of complaints within the Department, the Department upholds a lower proportion of complaints relating to child 21 Qq 124–125; C&AG’s Report, paras 5, 1.14, 3.10 22 C&AG’s Report, para 3.11 and 3.12 23 Q 125 24 C&AG’s Report, Figure 18, para 3.18 25 C&AG’s Report, paras 3.6 and 3.7 26 Qq 121, 128–129 16 Child Maintenance maintenance (around 1 in 3) than it does for its other service areas.27 It told us that one reason for this is that child maintenance “is an area where people are more likely to complain because of the nature of the situation” and that “people are more likely to complain, because you have two customers”.28 If a customer does not agree with the Department’s decision not to uphold a complaint, they can complain to the Independent Case Examiner (ICE). In 2020–21, CMG accounted for 43% of all complaints investigated and upheld (or partially upheld) by ICE (208 of 484). This was more than for all working-age benefits combined (189), and almost three times those relating specifically to Universal Credit (73).29 Given the high volume of complaints, we asked the Department whether it was satisfied that its complaints procedure was getting things right and that customers were being fairly treated. It told us that it was “very happy” with the way that it handled complaints, and was “absolutely confident” in the way complaints were handled. It recognised, however, that the rate of upheld complaints was higher than for any of its other services and said that it was not complacent and would be working to improve this.30 Supporting survivors and victims of domestic abuse and coercive control
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Government response AI summary
The government disagrees with the recommendation to review Child Maintenance cases where the Independent Case Examiner has upheld a complaint and report to the committee its analysis of the key themes and lessons to be learned, stating that it actively invests in reviewing such cases …
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HM Treasury
27
Recommendation
Ninth Report - Child Maintenance
Rejected
Low-income paying parents are more likely to build up child maintenance arrears than those who are higher paid: 46% of paying parents using the CMS did not earn enough to pay income tax (£12,570 in 2021–22), but these parents represented 62% of those with arrears as at March 2021 .Alongside …
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Low-income paying parents are more likely to build up child maintenance arrears than those who are higher paid: 46% of paying parents using the CMS did not earn enough to pay income tax (£12,570 in 2021–22), but these parents represented 62% of those with arrears as at March 2021 .Alongside making enforcement more challenging, we received written evidence from a number of non-resident parents who told us about distress and hardship they had experienced being asked for amounts they considered to be 50 C&AG’s Report, paras 21–22, 2.20 51 Q66; C&AG’s Report, para 2.20 52 Qq 70, 73–74 53 Qq 69–70; C&AG’s Report, para 2.22 54 Q 67 55 Q 32; C&AG’s Report, para 2.15 56 Q76; National Tables Child Maintenance Service Statistics data to September 2021, Table 7_2 57 Q 67 58 Qq 67 and 68; 20 Child Maintenance unreasonable, unfair or inaccurate, as well as unaffordable.59 More than two-thirds (68%) of those parents who are using Collect & Pay, and over a quarter (26%) of parents using Direct Pay, say that it is unaffordable.60
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Government response AI summary
The government disagrees with the recommendation to review the affordability of Child Maintenance Payments, stating that setting out plans relies upon a policy decision, but it is considering such plans and will update the Work and Pensions Committee in due course.
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HM Treasury
29
Recommendation
Ninth Report - Child Maintenance
Rejected
The amount Paying Parents pay is based on a means tested calculation set out in primary legislation. This applies different rates above certain earnings thresholds that is higher for those on higher incomes and a flat rate of £7 a week for those with the lowest income. The Department has …
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The amount Paying Parents pay is based on a means tested calculation set out in primary legislation. This applies different rates above certain earnings thresholds that is higher for those on higher incomes and a flat rate of £7 a week for those with the lowest income. The Department has not updated these earnings thresholds since they were set in 1998. In practice, this means that parents now pay child maintenance on much lower incomes than was originally intended. The Department told us that updating the earnings bands was a policy question, and the bands were considered to still be appropriate when the calculation was last considered as part of new legislation in 2008.63
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Government response AI summary
The government disagrees with the recommendation to review the affordability of Child Maintenance Payments, stating that setting out plans relies upon a policy decision, but it is considering such plans and will update the Work and Pensions Committee in due course.
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HM Treasury
32
Conclusion
Ninth Report - Child Maintenance
Rejected
The Department has improved the accuracy of its maintenance calculations. The National Audit Office’s estimate of the financial impact of the Department’s errors fell from 2.17% of the monetary value of maintenance in 2015–16 to a record low of 0.65% for 2020–21.71 The Department said that it “would obviously want …
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The Department has improved the accuracy of its maintenance calculations. The National Audit Office’s estimate of the financial impact of the Department’s errors fell from 2.17% of the monetary value of maintenance in 2015–16 to a record low of 0.65% for 2020–21.71 The Department said that it “would obviously want to go even further than that”.72 The Department designed CMS to reduce the risk of customer fraud and error. In 91% of cases, the Department says that it can legally rely on historical earned-income data from HMRC or benefits data to calculate the maintenance. Nonetheless, child maintenance is still vulnerable to certain types of customer fraud and error where the Department cannot rely on historic tax records. For example, under current legislation, unearned income, such as dividends, would not be considered unless there was a ‘variation request’ from the receiving parent. Customer fraud and error can also occur where either parent misstates their personal circumstances, such as the number of other children they are responsible for.73
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Government response AI summary
The government disagrees with the committee's recommendation, asserting that proportionate and cost-effective controls are already in place, including a fraud strategy, a Financial Investigation Unit, and the use of verified income data. The department notes it has consulted on legislative changes to include unearned income …
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HM Treasury
33
Recommendation
Ninth Report - Child Maintenance
Rejected
The Department refers cases of suspected fraud to its Financial Investigations Unit (FIU) to assess the accuracy of the award. Its FIU detected 1,400 cases involving fraud in 2020–21 and increased the child maintenance owed by £10.9 million.74 The Department relies almost entirely on parents to detect child maintenance fraud. …
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The Department refers cases of suspected fraud to its Financial Investigations Unit (FIU) to assess the accuracy of the award. Its FIU detected 1,400 cases involving fraud in 2020–21 and increased the child maintenance owed by £10.9 million.74 The Department relies almost entirely on parents to detect child maintenance fraud. It told us that its “most fruitful references come from the receiving parent, often because it is the receiving parent who knows an awful lot about the paying parent’s situation and financial affairs as they chase things down” but that this was not its only route to detect fraud as it could pick this up through casework.75 However, the NAO found that in reality nearly all the Department’s referrals to its child maintenance FIU team come from receiving parents challenging the value of the assessment through the variation process. The NAO identified several reasons why a parent may not challenge the value of an assessment, such as not knowing enough about the other parent’s circumstances or not having access to the level of credible information required to substantiate a challenge, and that there may be other barriers, such as domestic abuse or financial control, that would prevent the parent from contacting the Department regarding suspected fraud.76 68 Qq 85–87; C&AG’s Report, para 25 69 Q 98; C&AG’s Report, para 2.28 and Figure 14 70 Q 86; C&AG’s Report, para 2.29 71 Q59; C&AG’s Report, paras 2.4 and 2.8 72 Q126 73 Q53; C&AG’s Report, para 2.6 74 C&AG’s Report, para 2.7 75 Q 53 76 C&AG’s Report, para 2.7 22 Child Maintenance
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Government response AI summary
The government disagrees with the recommendation to take responsibility for detecting child maintenance fraud, stating they already have proportionate controls in place and that intrusive investigation can harm maintenance payments. They are consulting on legislative changes to include unearned income in calculations and will use …
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HM Treasury
34
Recommendation
Ninth Report - Child Maintenance
Rejected
The Department cannot currently demonstrate that its approach to fraud and error within child maintenance is proportionate as it has not assessed the risk or level of actual fraud and customer error within child maintenance as would be required if it was public expenditure.77 The Department reassured us that, despite …
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The Department cannot currently demonstrate that its approach to fraud and error within child maintenance is proportionate as it has not assessed the risk or level of actual fraud and customer error within child maintenance as would be required if it was public expenditure.77 The Department reassured us that, despite this, it does not treat tackling child maintenance fraud (where children often suffer as the end user) with any less enthusiasm than it does tackling fraud against the taxpayer. It told us that it “will look at what more we can do” to tackle child maintenance fraud.78 The Department has already consulted on some legislative changes to the way that child maintenance is calculated, including taking into account certain types of unearned income that it can pick-up readily from HMRC (so a ‘variation request’ from the receiving parent will not be required).79 It also told us that “data analytics is another source where we can potentially do more”, including making better use of intelligence sharing across government.80 Cost savings and transformation
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Government response AI summary
The government disagrees with the recommendation, stating that they already have proportionate and cost-effective controls and are enhancing them. They believe intrusive investigations could break down maintenance payments, impacting the child's welfare.
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HM Treasury
35
Conclusion
Ninth Report - Child Maintenance
Rejected
The Department has reduced the gross cost of administering child maintenance by £132 million (27%) from £497 million in 2011–12 to £365 million in 2020–21. In real terms, this is equivalent to a £242 million (40%) reduction at 2020–21 prices. This is broadly in line with the 47% fall in …
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The Department has reduced the gross cost of administering child maintenance by £132 million (27%) from £497 million in 2011–12 to £365 million in 2020–21. In real terms, this is equivalent to a £242 million (40%) reduction at 2020–21 prices. This is broadly in line with the 47% fall in caseload over the same period. It reduced its net funding requirement by £172 million (from £494 million to £322 million) across the same period, which is £40 million more than the reduction in gross costs because of the introduction of charging. However, the £322 million funding required (after counting income from fees, charges, and other sources) in 2020–21 remained substantially higher than the Department had expected it to be in that year. The Department forecast in its business cases that it would reduce the cost of administering the scheme to be £234 million in 2013 and £258 million in 2015.81 The Department told us that planned savings have been delayed because its closure of the 1993 and 2003 schemes took longer than expected. The Department has also not achieved the efficiencies it expected in the cost of administering each £1 of maintenance collected and arranged through CMS. It forecast this would improve from 35p per £1 in 2011–12, to 25p per £1 by 2018–19 (before investment costs and income). However, by 2020–21 the cost had risen to 36p per £1 collected and arranged. The Department told us that this was due to the delays in delivering overall cost savings, and because its customer caseload was now more concentrated on the more complex and most difficult cases.82
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Government response AI summary
The government disagrees with the committee's recommendation, citing its ongoing Transformation Programme which aims to improve efficiency and reduce unit costs through automation, enhanced online services, and the introduction of new digital tools like live chat.
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HM Treasury