Contracting Out (Functions Relating to Child Support) Order 2006

My Lords, with respect, it is part of the department, as are the other executive agencies. Whoever holds the contract, whether that is the department or the executive agency, the important thing is how well it is negotiated and how well it is monitored. I was going to say to the noble Lord that we believe that we will be able to put in place very satisfactory contractual arrangements that will meet some of the issues that noble Lords have raised. Regarding contact between clients of the agency and the CSA and the issue of debt, I can reassure the noble Lord that the CSA will have a dedicated team of staff in-house which will be able to deal with client issues that arise, although, clearly, the companies who will be used to deal with debt will be very much involved in face-to-face contact with the non-resident parent. But there will be a team in the agency to which people can refer as well. The IT position has been well debated. The reassignment of the contract with EDS is on a much sounder footing. It is co-operating wholeheartedly in improving the system and a number of ““fixes””, as they are called, are taking place over two years and seem to be going well. It is steady progress and I doubt whether the system, even at the end of the two-year period, will ever achieve what was hoped to be achieved in those halcyon days when people expected so much. But it is nearer to becoming the kind of system that can be used to provide effective performance. On contractual obligations—the noble Lord, Lord Skelmersdale, referred to data protection—contractors will be under the same legal considerations and the same policy operations that the agency is under. That will also be monitored. Yes, I very much agree with the noble Lord that there will be brake points and, where appropriate—although we hope that it never happens—the possibility of termination will also be written into those contracts. I very much take the point that was raised about previous local authority experience and we will want to ensure that the contracts are as tight as possible. As far as monitoring is concerned, there will be monthly reports. Regarding the contract in relation to debt, the companies who are successful will have to work in accordance with the code of the Credit Services Association. They will have to adhere to current legislation. My department will appoint audit and secure teams who will have access to the sites of those companies and will be able to audit their process; and there will be staff within the agency who will be part of that monitoring process. I hope that noble Lords will take it from me that there would be little point going down this route unless we were confident that we could come to satisfactory arrangements for effective monitoring, because, at the end of the day, we want to ensure that this proves to be a beneficial change of direction in policy to enable the agency to improve its performance. There is no advantage whatever to the Government in not having good contracts that are tightly monitored, with the ability to intervene if things go wrong. The noble Lord, Lord Kirkwood, asked me about the department’s current efficiency programme and the implications of the agreement that has already been announced about the department’s budget for the next spending review. They can best be described as challenging. There is no question but that the department is spending a lot of time and energy both in meeting the current efficiency target, which is to be measured by resource and headcount, and in terms of the future. In order to meet those challenges, the department will have to operate more smartly. I believe that we can do that, and we are setting the foundations for so doing. Furthermore, our approach to the operational improvement plan shows that we are able to be flexible. We are bringing in more staff to work in the agency over the next two to three years, but at the end of that period we expect the number to come down to the original headcount figure that we had in mind. I think that that is how departments should work in the future. They should be able to switch resources, identify the pressure points and move people in. At the same time, we have to look at the scale of our operations and at how we can simplify the benefits system. Clearly, the more we do that, the more straightforward the processes will become and the easier they will be to administer, but it is a big challenge. The noble Lord asked whether, by going down the route of using private sector companies for dedicated tasks, it could be implied that that might happen either to the agency or to the department as a whole. I can say only that we have to look at our operations. Clearly, we will learn from the lessons of the CSA and from this approach. We have to do everything we can to ensure that the staff who are working with us at the moment work as efficiently and effectively as possible, but we also have to look at other ways in which some services might be run in the future. I am confident that we can come up with a package of measures that will enable the department to meet these very challenging targets and also ensure that we provide efficient and effective services. The noble Lord, Lord Kirkwood, was concerned that the Secretary of State’s responsibilities were being transferred to the contractors in clerical cases. I hope that he is reassured by the fact that I have spelt out the monitoring processes that will be used. The clerical cases are a block of cases which have arisen because of the computer problems, and I believe that they can be seen as a stand-alone issue. On that basis, we think that there is a particular advantage in using private sector contractors, and there will be safeguards. The great advantage to us is that that will release 700 agency staff who can be used for frontline responsibilities, and the main aim of that is to deal with the backlog. I understand the concerns expressed by the noble Lord but I think that there are enough safeguards in the system, through the monitoring processes that we will put in place, to reassure him that this is a reasonable course of action. I understand that the pilots were not location-based.