By Vivienne Russell | 29 February 2012
Plans to cut spending at the Child Maintenance and Enforcement Commission are risky and based on ‘very uncertain’ estimates about future income, the National Audit Office warned today.
The commission has to cut spending by £161m by 2014/15 and is currently £44m short of this target. It hopes to make up the shortfall by raising £71m from controversial new fees for parents using its services.
However, the charging system is underpinned by an IT system whose costs have already risen from £149m in January to £275m last October.
The NAO said the income estimates included assumptions that could not be substantiated. It also warned that additional cuts might need to be made late on if the fee income did not materialise. These last-minute cuts could have an adverse effect on services.
The auditors also raised concerns about some inherent inefficiencies within the commission, noting that its spends 56 pence for each £1 in maintenance it collects for parents. This compares poorly with its Australian counterpart, which spends just 35 pence per £1.
While efficiency had improved since 2006, staff productivity is not properly monitored, there has been significant duplication in back-office functions and CMEC operates in 70 offices, the NAO found.
NAO head Amyas Morse said relying heavily on the introduction of fees to parents was a ‘high-risk approach with no contingencies if it goes awry’.
He added: ‘I do not believe the commission can achieve value for money without developing a realistic plan for controlling and reducing its costs and this will involve making genuine efficiencies in how it delivers it services.’
Commenting on the NAO’s findings, Public Accounts Committee chair Margaret Hodge said: ‘If customers are to contribute towards the costs of CMEC, they must have confidence that the organisation is run efficiently. This is not currently the case and costs are higher than necessary.’
