Value for Money
Child Maintenance
Published 3 March 2022
7 recommendations
Department for Work and Pensions
BenefitsChild maintenanceChildcare and children's servicesWork, welfare and pensions
nao.org.uk
This report looks at whether the government is achieving value for money in its management of child maintenance.
Recommendations (7)
Source: NAO Recommendations Tracker · PAC follow-up below
Department for Work and Pensions
Rec 1
Partially Accepted
Work in Progress
The Department should:
a) investigate why fewer people are taking-up CMS than expected and tackle any inappropriate barriers that prevent families using its services. In particular,
it should:
• research ways in which more people who do not have effective arrangements and for whom a CMS arrangement may be appropriate can be encouraged to use its services;
• use surveys to monitor the number of effective arrangements across society, and the characteristics of the families that make family-based arrangements or use its services; and
• apply this research and monitoring to test approaches to improving the accessibility of its services;
Department for Work and Pensions
Rec 2
Partially Accepted
Work in Progress
b) assess the affordability and interaction of child maintenance with the welfare system. The rates used to calculate maintenance have not been changed since 1998 and can conflict with the wider aims of the welfare system. Changing this methodology and the bands used would require primary legislation. In particular, the Department should:
• review the child maintenance calculation rates to assess the extent to which they conflict with the aims of Universal Credit of supporting people into work and otherwise meet the Department’s objectives;
• report to Parliament on whether it believes new legislation is necessary; and
• make modifications to the Universal Credit system to enable automation and partial deductions from benefits for child maintenance;
Department for Work and Pensions
Rec 3
Partially Accepted
Implemented
c) improve the effectiveness of Direct Pay arrangements. Direct Pay is designed to be a lighter touch approach and the Department does not monitor every payment. However, it can improve its understanding of the effectiveness of these arrangements and its interaction with these customers to help improve the way the arrangements work or, where they do not work, suggest alternatives. In particular, it should:
• continue to regularly survey separated families with Direct Pay arrangements and publish a regular estimate of the effectiveness of the arrangements and whether the arrangements continue; and
• set out how, as part of its digitalisation and modernisation plans, it will continuously improve its communication with Direct Pay customers to help them report missed payments, help prevent Direct Pay arrangements from failing, or, where this is not possible, to promote faster transfers to Collect & Pay arrangements where appropriate;
Department for Work and Pensions
Rec 4
Accepted
Work in Progress
d) continue to improve the effectiveness of Collect & Pay collection and enforcements. The Department has already reduced its processing times and identified further ways it can improve its collection and enforcement. It should continue these and also:
• map the full extent of the ‘customer journey’ for each of its enforcement actions including the steps where others need to take action to identify the full time between starting a process and payment, and identify where, by working with others and suggesting legislative changes, it can reduce the overall time to getting payments;
• monitoring the cost-effectiveness of each of its enforcement activities and what happens to each case after an enforcement action is applied so that this can be used for continuous improvement;
Department for Work and Pensions
Rec 5
Rejected
e) review its write-off strategy for the Collect & Pay service child maintenance arrears. No child maintenance debt strategy will be without problems. The current approach will inevitably mean ever-increasing debts being recorded for unpaid maintenance that parents will never receive. The alternative of asking to write this off can cause distress to the receiving parent and potentially lead to recoverable amounts being written off. The Department should consult on and assess options, before seeking Parliamentary authority, on whether it should (after improving collection and enforcement):
• allow the arrears to build and only write them off when there is no legal recourse to the debt (the current approach);
• write off arrears when they are deemed to be unlikely to be collected; or
• conduct periodic debt write-off exercises similar to that carried out on the CSA debt;
Department for Work and Pensions
Rec 6
Rejected
f) develop its counter-fraud and error strategy. Child maintenance payments are between parents and not public money. The risk of customer fraud and error
is limited by the controls the Department already has in place. Nonetheless the Department can learn from its own best practice to manage fraud and error in a way that is proportionate to the risk, and its role in managing child maintenance. This would require it to:
• adopt the overall aim of demonstrating cost-effective controls over child maintenance fraud and error;
• commit to undertake an annual assessment of the principal fraud risks; and
• commit to publish annually, where considered material, its estimate of child maintenance fraud and the amount detected (this could be done as a short disclosure in the accounts);
Department for Work and Pensions
Rec 7
Accepted
Work in Progress
g) develop its approach to managing the quality of the statutory service to support its planned transformation. Our review of the CMS’s operational management suggested that Department should:
• develop its understanding of customers’ needs and what actions are most effective in what circumstances;
• improve its data on the end-to-end customer journey to better understand how customers proceed through its processes and what impact each has; and
• develop the management information it uses for service improvement. Particularly: develop performance indicators that allow it to anticipate
problems (lead measures); cost-effectiveness metrics that show the return on spend on each of its interventions; and build a new set of performance measures to monitor how its customer service is perceived.
Parliamentary Committee Follow-Up
The Public Accounts Committee examined this NAO report and published its own recommendations. The government responds to PAC recommendations via Treasury Minutes.
Ninth Report - Child Maintenance
Public Accounts Committee
· 22 June 2022
· 17 recommendations
Child Maintenance 2012 Scheme: early progress: Government response to the Committee's Seventeenth Report of Session 2014-15
Public Accounts Committee
· 13 January 2015