Plans to cut the costs of the child maintenance system in the UK are ‘high risk’ and could end up increasing child poverty, the Public Accounts Committee warned today.
The PAC’s examination of the Child Maintenance and Enforcement Commission’s savings proposals concluded that they relied ‘heavily’ on introducing fees on parents rather than making genuine efficiencies. This was a ‘high risk’ strategy, the MPs said.
The commission is planning to cut its costs by £117m by 2014/15. It also aims to shift its focus from the current statutory assessment to helping separated parents reach their own agreements on child support.
It also intends to charge parents who are unable to agree arrangements. These include a £20 application fee, and a levy of between 22p and 32p for every £1 it collects on behalf of parents.
Today’s PAC report warns that it is ‘difficult’ to forecast how parents will react to the imposition of fees, and to the choice to reach their own agreements. It may encourage parents to make their own provision, and speed up the process for those using the statutory scheme.
Committee chair Margaret Hodge said: ‘I am concerned that the commission’s cost reduction plans seem to rely heavily on charging parents to use its services. The commission must ensure that the introduction of fees does not end up making child poverty worse.’
The PAC also warned that the system ‘too often fails to get any or the right amount of maintenance from non-residential parents’. Confidence in it must be restored or some parents might see little point in paying for a service that has failed them in the past.
In 2010/11, the commission collected and transferred £1.1bn to parents caring for more than 880,000 children.However, there is a total of £3.7bn in outstanding maintenance payments, of which the commission estimates that only £1bn is collectable. Hodge said this ‘beggars belief’.
The CMEC will be abolished this year, following the passage of the Public Bodies Act in December 2011. Its role of supporting separated families and securing maintenance payments for children affected by separation, including introducing the new arrangements, will transfer to the Department for Work and Pensions.
A DWP spokesman said that ‘child maintenance presents serious challenges which have tested successive administrations’.
He added: ‘The government's fresh approach will encourage and support parents in making their own maintenance arrangements whenever possible - benefiting children, parents and the taxpayer.’
