A bad week for CMEC

A BAD WEEK FOR CMEC

It has been reported that the Comptroller and Auditor General, who deals with the accounts of government agencies and quangos, has been unable to give a sign off to the clients’ funds account of the Child Maintenance Enforcement Commission (CMEC).

CMEC took over responsibility for the statutory child maintenance schemes from the CSA in November 2008.  The reasons the accounts could not be signed off was because of the “truth and fairness of the outstanding maintenance arrears”.  The problem with the accounts is that some payments have been based on incorrect assessments and some have been paid at the wrong rates.  The best estimate for irregular receipts and payments for 2010-2011 was £10.2 million by way of overpayment and £13.9 million by way of underpayment.  In addition, the Commission estimates the outstanding child maintenance arrears to be at £3.748 billion as at 31 March 2011.  However this does not give an accurate picture because of the level of error in the source case data.  The best available estimates are the cumulative errors which show that the reported arrears as at 31 March 2011 contained overstatements of £2.19 million and understatements of £316 million.  The Commission estimates that £0.54 billion (14%) of the outstanding balance of arrears is likely to be collectable.  However it is difficult to confirm this amount due to the underlying arrears and level of error.

In another blow to CMEC, the House of Commons Public Accounts Committee published a report into CMEC’s cost reduction plan.  The Public Accounts Committee surmise that CMEC faces further significant challenges in introducing its new child maintenance scheme, which will be based upon gross rather than net income, and will draw data from HM Revenue & Customs & Excise rather than relying upon parents filing in the maintenance enquiry forms.  The Commission also plans to introduce charging fees for parents who choose to use their services.  The Commission must deliver cross reductions of £117 million by 2014-2015 and its plans are currently £16 million short of this target.  Typically, its cost reduction plans depend largely on a new IT system which is already late.  Followers of child support legislation practice in this country will be aware of the huge cost of two previous IT systems brought in for the Child Support Agency, both of which were hugely expensive and spectacular failures in their own right.  Each month of delay will increase the Commission’s costs by at least £3 million.

The Committee concludes that the Commission’s cost reduction plans are very risky in that they depend extensively upon the introduction of fees on parents rather than introducing a proper system.  Charging for service is difficult as the Commission and its predecessor the CSA have had a very bad press, justifiably, and do not have the confidence of parents. The CSA (and now CMEC) has had billions of pounds of public money poured into it, but remains staffed by poorly paid officers, and is burdened by two different maintenance assessment schemes working simultaneously. The latest ‘new’ scheme will only add to its woes.

Sadly, it would appear that the lessons of the past 20 years have not been learned and the collection of child support in this country remains damaged, some would say irreparably.

© Punam Denley

22 May 2012

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