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The Commons Public Accounts Committee has published a report criticising the Child Maintenance and Enforcement Commission's cost reduction plans.
The report highlights that maintenance payments totalling some £3.7 billion are outstanding, but the Commission estimates that only £1 billion of this is collectable.
The Commission has to deliver cost reductions of £117 million by 2014-15, however according to the report its plans are currently £16 million short of this target. Its cost reduction plans depend in part on a new IT system which is currently behind schedule. The report states that each month of delay will increase the Commission's costs by at least £3 million.
Commenting on the report Fiona Weir, CEO of single parent charity Gingerbread, said: "The Commission is under such pressure to achieve cost savings, the worry is that it will move too soon to start closing down existing CSA cases, hoping that fewer parents will choose to apply to the new system, thus saving it money. Yet parents need the new system and cannot afford for it to fail."
Around half of all children in the UK from separated families are being brought up in poverty.
Margaret Hodge MP, Chair of the Committee of Public Accounts, said: "I am concerned that the Commission's cost reduction plans seem to rely heavily on charging parents to use its services. The Commission must ensure that the introduction of fees does not end up making child poverty worse.
"Many parents are frustrated at the lack of support they are receiving, too often not being paid the right amount of money or any at all. It beggars belief that outstanding payments total some £3.7 billion but only £1 billion of that is considered collectible and less than half of that can be collected cost-effectively."
In 2010-11 the Commission collected and transferred £1.1 billion to parents caring for more than 880,000 children. The new management at the Commission say they recognise the problems they face and have started to address them.
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