Contracting Out (Functions Relating to Child Support) Order 2006

rose to move, That the draft order laid before the House on 22 May be approved [28th Report from the Joint Committee and 37th Report from the Merits Committee]. The noble Lord said: My Lords, this order is enabling legislation designed to help the Child Support Agency achieve some of the key objectives set out in the Operational Improvement Plan, which was published and announced in this House on 9 February 2006. The plan sets out the agency’s aims and objectives for the next three years. It is recognition that we need to continue to maintain and improve performance while Sir David Henshaw makes his recommendations and considers and consults on the way to redesign the child support system. The overall aim of the plan is to improve service to clients, increase the amount of money collected, achieve greater compliance from non-resident parents and provide a better platform from which to implement future policy. In developing the Operational Improvement Plan the agency identified a significant capacity gap. Contracting out certain services will enable the agency to fill that gap, deliver the planned improvements by March 2009 and stay within the approved resource levels and spending limits. However, contracting out is not just about capacity; it is also about buying in expertise and learning from the private sector. This order will enable the agency to contract out three main areas of work: the management of clerical cases, a significant amount of debt recovery and some tracing of non-resident parents. The CSA’s computer problems have been well documented and discussed in this House. As a result of these problems, currently around 19,000 cases are dealt with clerically. These cases need a disproportionate amount of resources. Contracting out that work will enable those currently employed in that activity to be redeployed, freeing up to 700 staff for frontline processing. That will contribute significantly to the agency reducing its backlog of new scheme applications. This is a finite area of work, with all clerical cases expected to be placed back on to the computer system by 2009 once the IT fixes have been delivered. Given that short lifespan, this area lends itself readily to contracting out. It is possible for operations to be scaled up and down easily, it is stand-alone and it needs minimal use of the agency’s computer systems. The contractor will be required to undertake a wide range of activities in delivering the entire clerical case management process, from initial information gathering to making assessments and calculations, and then arranging collection of maintenance. The contractors will therefore need to use most of the powers currently used by the Child Support Agency. As a result, the order has been drafted to cover a wide range of agency functions. I now move to debt recovery. Nearly one in three non-resident parents who have been assessed and are due to make a payment fail to pay for their children. Debt accrued since 1993, as a result of non-resident parents’ failure to pay, exceeds £3.3 billion. This is why the operational improvement plan has increased enforcement at its heart. We agreed funding of £30 million to allow the agency to employ external debt collection agencies to recover in excess of £100 million of outstanding debt. The contractors will enhance the agency’s debt reduction capacity by undertaking a wide range of activities to recover individual debts. They will be encouraged to be innovative, within existing legislation, to recover what is due or establish a satisfactory repayment arrangement promptly. In England and Wales contractors will enforce the payment of debt through the magistrates’ court or the county court as appropriate. This will include obtaining county court judgments, liability orders, third-party debt orders and charging orders. Contractors operating in Scotland will fulfil the same role using the appropriate Scottish legislation. It is important to stress that there will be no reduction in the child support maintenance received by individual parents as a result of using contractors. The cost of employing the contractors will be borne by the agency. We also intend to allow private sector contractors to use their tracing expertise to find non-resident parents who are avoiding the agency. Just under 70,000 cases have not yet been assessed on the old scheme, largely because non-resident parents cannot be traced by the agency. We know that in a number of cases, non-resident parents deliberately avoid dealing with the agency, for example by refusing to answer calls and letters, frequently moving or deliberately providing incorrect information. Such behaviour prevents the establishment of regular child support maintenance payments. So, where the agency has failed to find the non-resident parent, the contractor will seek to locate him or her and conduct interviews to capture information to enable maintenance assessments, calculations and/or enforcement action to be undertaken. It was necessary to draft this order widely; together the three areas we wish to contract out cover most of the functions carried out by the agency. But we have excluded some statutory functions from the order. Section 71 of the Deregulation and Contracting Out Act 1994 precludes certain functions from being contracted out. These include, for example, rights of entry and seizure, and seeking committal to prison or disqualification from driving. Where necessary, contractors will return cases for the agency to progress. Contractors will be doing a very sensitive job so it is right that we deal only with the most reputable. The agency will use an existing departmental procurement framework to appoint contractors for debt collection and trace activity. This framework was established following a competitive tendering process. A different procurement route is being taken for clerical case management. Contractors will be selected following a competitive tendering exercise and must demonstrate a proven track record in this area of work and the business and financial capacity to deliver. Although we have been clear on the cost of the debt contract, negotiations over clerical cases are at such a stage that I cannot give figures on these costs. However, I can assure noble Lords that we would not let any contract that would cost more than retaining the work in-house. All successful contractors will be subject to strict codes of practice and will be required to adhere to all relevant legislation such as child support, human rights and data protection legislation. In conclusion, the order will support the implementation of the Child Support Agency’s operational improvement plan, which in turn will deliver a better deal for the children of separated parents. I am satisfied that the order is compatible with the European Convention on Human Rights and I commend it to the House. Moved, That the draft order laid before the House on 22 May be approved [28th Report from the Joint Committee and 37th Report from the Merits Committee].—(Lord Hunt of Kings Heath.)