Child Support (Management of Payments and Arrears and Fees) (Amendment) Regulations 2023

Considered in Grand Committee

Moved by

That the Grand Committee do consider the Child Support (Management of Payments and Arrears and Fees) (Amendment) Regulations 2023.

My Lords, I am pleased to introduce this statutory instrument, which, subject to approval, will help more families to access the vital support that is available through the Child Maintenance Service. It will also ensure that efforts and resources can be focused on taking action to collect unpaid arrears in those cases that will make the biggest difference to children. These changes build on a number of improvements that we have already made and are among the first in a further wave of legislative measures that we plan to bring forward to ensure that the service is more accessible, simpler and speedier and ultimately gets more money to more children more quickly.

Families are the cornerstone of our communities. Each family is unique, but the importance of the bonds that bind them together is universal. When these bonds fray or falter, the impact on children can be significant, including where parents separate. It is therefore right that we continue to take action to promote family cohesion and reduce conflict, so that children grow up with the love and support that they need.

It was an honour to respond to the recent debate on the Love Matters report, commissioned by the most reverend Primates the Archbishop of Canterbury and the Archbishop of York. The report delivered a powerful reminder of why love and support matter and the importance of strengthening and supporting family life, including ensuring that children get the best start in life.

The Child Maintenance Service plays a key part in that endeavour. It is part of a wide-ranging set of programmes and initiatives that my department is leading on. For example, through the reducing parental conflict programme, we are supporting parents to reduce the impact of frequent conflict. Delivered through local authority family services and with local community and faith partners, we are on track to have directly supported 40,000 parents in the last two years. Since we introduced it in 2014, the family test has been guiding policymakers in looking at the potential impact of policies on the family. It is something that I have actively supported in my role and I am committed to promoting it across government. Our new childcare offer has removed one of the biggest barriers to parents working and providing for their family, with a nearly 50% increase in the amount of childcare costs that parents on universal credit can claim back.

My Lords, I thank the Minister for his overview of the whole system. He eventually got to the regulations in front of us, but he gave us a good idea of the various things that the Government are attempting to do; I thank him for that.

I come to the regulations themselves. The Minister will, I am sure, be pleased to know that I and my party agree with the removal of the £20 application fee; it has been my party’s policy in the past couple of manifestos. We would, however, make an additional change: in addition to removing the £20 charge, it is Liberal Democrat party policy to remove the 4% charge for receiving parents using the collect and pay service. I would appreciate his view on the possibility of this.

The Minister pointed out that the Government are trying to be pragmatic in dealing with the rest of the instrument. I welcome the suggestion that up to £7 of arrears could be written off but I hope that the Minister can clarify whether that would be a one-off £7 at the end—with which we would have no problem—or could apply to more than one item of £7. Is this meant to be a generous action or is it to save administration costs, or a bit of both? He did say that it was pragmatic. Who gains and loses on this £7? I read the provision through and was not quite sure—perhaps it is just me—whether the receiving parents loses £7 or that the Child Maintenance Service in some way writes it off internally. I am not calling for it to be increased but does the Minister have any information as to whether an increase in the write-off—let us say it was £10; I am just dealing with the theory of it—would have any administrative effect? Would we save money? If it is meant to save on administration, is £7 an appropriate cut-off? I think that it is, but it is worth asking.

I will move on in dealing with this £7 write-off. My reading of the statutory instrument is that time arrears will be written off in only these limited circumstances: maintenance arrangements have come to an end because the payee parent has requested it; the paying parent has died; the child has died; the child is no longer a child; the parents have been cohabiting for more than six months; a new arrangement has been put in place; or the parent has failed to pay anything for the final three months. Presumably, there would be only one £7 sum of arrears rather than a series of £7 sums that could be written off unless a new arrangement were later put in place—for instance, if the couple got back together, then broke up or the payee parent requested that a new arrangement be put in place—but subsequently ended again. However, that would be some months or years down the track and would not happen too often, I hope. It may seem fairly obvious to the Minister but I have read the SI and it really is not that specific. The ambiguity is such that I would appreciate, for the purposes of Hansard, it being set out.

My Lords, I thank the Minister for introducing these regulations. I also thank the noble Lord, Lord Palmer of Childs Hill, for his careful questioning on the £7 matter; I shall leave that entirely to him and commend him on getting into the weeds in which I normally pride myself on lurking with these sorts of regulations. I very much welcome him to this space.

I was surprised and delighted to find a Keeling schedule in the Explanatory Memorandum. Can the Minister convey my appreciation of that to those responsible? It is often quite hard to track back the way in which regulations apply, so I am grateful for that.

As we have heard, these regulations do two things: they remove the £20 upfront fee payable to all those who are not exempt; and they waive arrears below £7 in certain circumstances, as described by the noble Lord, Lord Palmer. The Government introduced both this upfront fee and the ongoing fees after they reformed the child support system in 2012. The ongoing fees are to be retained, but these regulations remove the upfront fee at a cost of roughly between £1 million and £2 million a year. I should say at the outset that we also support these changes. However, I want to ask some questions, particularly about the charging point.

The Explanatory Memorandum notes that

“applications to the statutory scheme have been lower than anticipated”

at the time of the 2012 reforms. The EM references the NAO report issued last year, which made interesting, if worrying, reading. More parents are now making their own arrangements and fewer parents are using the statutory child maintenance system, presumably because of the fees. As the NAO notes, and the Minister reminded us, that was the aim. The DWP wanted to reduce the number of families who use the statutory system and get more people to make their own arrangements. Look at what happened: private arrangements have increased as expected, but the take-up of the statutory scheme has plummeted. It was expected to fall from 46% of parents in 2011-12 to 33% by 2019 but, instead, it went down to just 18% of separated families using the CMS in 2019-20. That is a collapse of demand for the state system.

Meanwhile, the estimated proportion of separated families with no arrangement at all increased from 25% in 2011-12 to 44% in 2019-20. If the Government were trying to put people off getting child support, it worked. The numbers are edging up a little now, but the latest figure I could find was that cited by the EM, which says that:

“The proportion of separated families with CMS arrangements stood at 19% in 2021/22”.

The memorandum suggests that:

“Removal of the application fee would remove a barrier to parents having a successful arrangement which will ensure that children will receive money through CMS”.

While welcoming this, I ask: what is the evidence that the upfront fee is the primary barrier putting people off, as opposed, say, to ongoing fees or other matters?

I will give the Committee some background. When the Government proposed to introduce fees for using the Child Maintenance Service, it was controversial. As I have been in this brief for a long time, I remember the much-missed Lord Mackay of Clashfern trying to amend the Government’s legislation on this very point. In the end, the Government resisted, but he drew them out and the Government were very clear: the upfront fee was meant to deter parents and get them to make their own arrangements, instead of using the state system; the ongoing charges were designed to get them to consider whether they could arrange payments between themselves, through direct pay rather than by using collect and pay. At the time, many concerns were raised that the fees would deter parents from using the state system at all, so the Government agreed to do a review 30 months after charging was introduced.

The 30-month review, as it was imaginatively called, used independent survey information, along with official statistics and other feedback from representative groups, to look at the impact of the charges. The survey work was solid—it was done by the National Centre for Social Research—and the 30-month review said:

“Evidence from the NatCen surveys tells us that some parents, particularly those on low incomes, can find the application fee difficult to afford, but we do not have any evidence that this is preventing these families from making an application. The research does not allow us to assess the relative impact of the application fee compared to other factors that parents consider when deciding whether to apply to the statutory scheme”.

Remember, that was 30 months after the fees were introduced back then—a decade ago.