No consensus on CSA replacement

The Child Support Agency is to be wound up and replaced with a new streamlined body, John Hutton has announced.

In a Commons statement, the work and pensions secretary said a "fresh start" was needed.

"The need for a radical overhaul is clear," said Hutton, adding that the existing failings were not due to CSA staff but caused by the "policy framework" itself.

The CSA will be replaced with a "smaller, more focused" body.

And parents could face curfews and the suspension of their passports if they fail to pay their dues, Hutton told MPs.

The Conservatives said the announcement was "a huge disappointment".

Shadow work and pensions secretary Philip Hammond said ministers "have completely failed to demonstrate the political leadership required to push through the reforms that are desperately needed by so many single parent families".

History

The CSA was set up 13 years ago in order to ensure that absent parents contribute to the costs of their child's upbringing.

But it proved controversial from the start and has been hit by a string of failures.

IT systems have failed to cope and the formula for assessing payments has been branded over-complicated - attempts over recent years to improve the computer system and simplify the formula have both failed.

Some £3.5bn of child support remains uncollected, with 60 per cent of that thought to be unrecoverable, and the National Audit Office has said that every pound the CSA recovers in maintenance payments costs 70p in administration.

Plan

Legislation is expected to close the CSA and replace it with a slimmed-down body that will focus on the hard core of absent fathers who refuse to pay for their children.

There will be a "clean break" with past and an entirely new organisation will take on future cases.

And there will be no automatic conversion of cases from the CSA to the new body, Hutton told the Commons.

Instead, parents will have to reapply to the CSA's replacement if they wish to continue making their existing claims.

A separate body will be established to manage old debts left unpaid under outstanding CSA judgements.

Focus

The CSA's replacement will also have a new focus on tackling child poverty.

Parents will keep more of their maintenance allowance, rather than having much of it taken back by the new body.

This will help the drive to tackle child poverty in addition to providing a greater incentive for fathers to pay the cash.

Personal responsibility will be encouraged, with parents helped to come to their own arrangements "wherever possible".

But there will be effective enforcement arrangements for those who refuse to pay.

Consensus

Hutton told the Commons he wanted to see a consensus on both the overall policy and the means for implementing it.

"There is a clear sense, I believe, both in this house and outside, that our system of child support needs radical change," he said.

"It must offer better value for money for the taxpayer.

"It should enforce the rights of children and the responsibilities of parents more successfully.

"And it must ensure that families with children in particular do not slide into poverty when parents split up."

Disappointment

Hopes for cross-party agreement appeared slim, however.

Responding for the Conservatives, Hammond said: "Today's substance free statement will come as a huge disappointment to the 1.5 million families who are stuck on the current CSA system and were expecting action to be taken by the government to ease their plight.

"They will not be automatically converted onto the proposed new system and are effectively abandoned.

"Neither has any attempt has been made to address the real root of the CSA's problems - the inability of the current system to accurately assess how much maintenance an absent parent should pay.

"Having just poured £500m of taxpayers' money down the drain the government must be sure it has addressed this key issue before spending any more.

"The government's first bungled attempt to reform the agency was an expensive waste of taxpayers' money.

"Now, today, they have completely failed to demonstrate the political leadership required to push through the reforms that are desperately needed by so many single parent families.

"Now is the time for action but yet again the government have kicked meaningful reform of the CSA into the long grass yet again."