National Audit Office Publish Report on the Value for Money of Child Maintenance Service (3rd March 2022)
Key points to emerge are that 6 out of 10 (62%) of parents with Child Maintenance debt did not earn enough to be charged income tax or had no income.
NAO accept that there is an affordability issue and make an unprecedented recommendation to review legislation
FNF’s view is that until the Government have a cohesive strategy for separated families and until Child Maintenance is affordable and fair:
- Arrears will continue to escalate
- Family conflict will escalate
- Children will be harmed
The CMS service costs taxpayers £322m a year. At a cost of 36p for every pound received by parents, it represents poor value for money.
FNF welcome NAO’s key, unprecedented, recommendation that DWP assess affordability and report to Parliament on whether new legislation is necessary. Contrary to popular belief about parents avoiding their financial responsibilities towards their children, the NAO reports that almost two-thirds (62%) of paying parents with Child Maintenance (CM) arrears have incomes below the tax threshold. As FNF have been saying for many years, there is a problem of unaffordable assessments under a fundamentally flawed Child Maintenance formula. The NAO also identifies that payment thresholds/bands have not been reviewed for inflation since 1998 and ‘can conflict with wider aims of the welfare system’.
In 2019 the Social Security Advisory Committee (SSAC), a statutory government agency, identified key flaws in CM legislation and recommended that that the government address the lack of a ‘clear strategy for separated parents’. We agree with this. Unfortunately no such strategy has been developed. The SSAC also highlighted the problems of unaffordable CM assessments - so there are now two government agencies highlighting this problem.
WE urge the Government to formulate a coherent strategy for separated families and urgently make parliamentary time to amend legislation. That legislation must ensure:
• Assessments are affordable
• Assessments fairly reflect shared parenting
• Assessments are formulated to promote involvement of both parents in both caring and financial responsibilities for their children.
• An end the ‘winner takes it all’ approach to minimise conflict and weaponisation of Child Maintenance.
• An end the 20% surcharge (4% to receiving parents) for those who are on low incomes/benefits.
Until these fundamentals are addressed, CMS will continue to fail and Child Maintenance arrears will continue to grow. No matter how much enforcement measures are strengthened, it is not possible to get blood out of a stone. NAO observes that CM arrears are increasing by £1 million a week and will reach £1 billion by 2031. FNF consider that this estimate is conservative as it does not take into account the effect of inflation between now and then on affordability.
There is no tangible evidence of these issues being addressed by DWP. By integrating the formula for Child Maintenance into primary legislation, Parliament have made it impossible to even make sensible annual adjustments based on inflation, without changing the law – even when that law makes no sense. New legislation must be properly formulated – the present law is not.
Chair of FNF, Paul O’Callaghan says: "We welcome the National Audit Office’s report on value for money of CMS, particularly in relation to addressing legislation in relation to affordability of assessments. Children need the love and care and financial support of both parents. The NAO report is a damning indictment on the failure of the Government to create legislation that does more good than harm. Tens of thousands of parents are falling behind with their child maintenance payments, not because they won’t pay, but because they can’t. The NAO report comes as Minister of State for Justice, Dominic Raab MP, has called for radical ideas to take parents out of family courts. The issues of Child Arrangements after family separation and Child Maintenance are often inextricably linked. The US Congress identified that involved parents also contribute more to the upkeep of their children . A coherent policy that places as much store on supporting and enforcing shared parenting arrangements as on financial provision will pay dividends. Current policies fail to do this and fuel conflict."
The NAO report can be downloaded here.
We will continue to analyse this 92 page document, but this is now the second government body to recommend that legislation is reviewed for affordability. The first was by the Social Security Advisory Committee (SSAC). FNF were instrumental in driving this agenda with NAO and SSAC. The Mirror quotes our Chair in their article on this issue here. The journalist Polly Toynbee wrote about this report in The Guardian in a manner that is disappointing and blames fathers for putting children into poverty - implying that the high figure for low income paying parents is down to fraud (see here). You may wish to consider contactin The Guardian about this or sharing your experience of being driven to poverty on the jounalist's Twitter account where she posted a link to the online article.
If you are affected by the issues raised here, please contact your MP and ask them to raise your concerns with the relevant Ministers and to contact us for further information. Please also consider sharing with us any responses you receive.
The House of Commons Public Accounts Committee are also currently looking into the effectiveness of CMS. They are independently seeking evidence - the deadline for this is Wednesday 9th March 2022. The announcement of this is here or you can go directly to the survey here. The NAO's call for evidence resulted in over 6,000 responses - making this the biggest response that they have ever received on any issue. We know many FNF Members and supporters were part of this group. Please don't stop - MPs need to know that there are two sides to the story on Child Mainteance.
7th March 2022
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