£3.7bn owed in child maintenance

Margaret HodgeAbsent parents owe £3.7bn in child maintenance but the agency in charge of securing payments only believes it can collect £1bn of that, a committee has revealed.

MPs claimed it "beggars belief" that so much money is being written off and said parents are frustrated at not being paid the right amount of money or any at all.
They also raised concerns that while aspects of the work of the Child Maintenance and Enforcement Commission (CMEC) remained unacceptable, parents will be made to pay fees for the service in an attempt to fill a black hole in its budget.

That strategy for cost reduction is "high risk" because it is difficult to forecast how parents will react to being billed when they lack confidence in the system, according to the public accounts committee. It urged the Commission, which plans to charge up to £100 in application fees, to demonstrate that it has a service which is worth paying for.

But MPs said the organisation has made real progress in recent years, with more money than ever before going to children, backlogs being reduced and a higher proportion of non-resident parents paying some child maintenance.

Margaret Hodge, who chairs the committee, also raised concerns about delays in a new IT system for CMEC.

She 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.

"Many parents are frustrated at the lack of support they are receiving, too often not being paid the right amount of money or any at all. It beggars belief that outstanding payments total some £3.7 billion but only £1 billion of that is considered collectible and less than half of that can be collected cost-effectively.

"The Commission has to reduce its costs by £117 million by 2014-15, and is already £16 million short. It is introducing a new IT system to try to save money but the system is already late. To meet the current timetable, the critical testing will need to be done at the same time as the system is being delivered, a recipe for failure in the case of many previous government IT projects. Every month of delay will cost the Commission £3 million - money it can ill afford to waste."

A Department for Work and Pensions spokesman said: "Child maintenance presents serious challenges which have tested successive administrations. The Government's fresh approach will encourage and support parents in making their own maintenance arrangements whenever possible - benefiting children, parents and the taxpayer."
Read Full Story