CSA cuts pounds 500m from benefit bill savings by child agency

The Child Support Agency saved nearly pounds 500m in benefits last year and has already "paid for itself", its chief executive claimed yesterday.

Ann Chant told MPs on the Commons social security committee that in 1994- 95 the CSA had saved pounds 479m, pounds 19m more than had been forecast.

And more than 60,000 parents had come off income support after they received a maintenance application form, which accounted for pounds 199m. The year previously pounds 138m had been saved.

In all more than pounds 1bn had been saved from 1993-94 to August this year. The CSA's running costs since it was started up three years ago had been pounds 500m.

In July the CSA's position was described as "financial chaos" by Labour's social security spokesman, Donald Dewar, after it was revealed that the debt from absent parents had reached pounds 525.5m, money unlikely ever to be collected.

By the end of August this year the total maintenance assessed but not paid had risen to pounds 701.9m. Miss Chant said: "This is a large sum but the rate of interest has reduced in recent months which reflects the action the agency is taking to reduce the amount of doubtful debt charged."

There were several reasons for so many parents coming off income support, such as reconciliation between the parents, or the parent looking after the child getting an alternative source of income.

While claiming the numbers coming off income support had shown the CSA to be "an effective social security anti-abuse measure", Miss Chant said that the amount was "not going up inexorably". Initiatives by the Benefits Agency would enable fraud to be identified before the CSA became involved.

She also said the CSA was working closely with the Benefits Agency to investigate allegations of fraud or evasion made by one parent against another. Of 7,610 cases sent to the Benefits Agency in the nine months to last November, 39 per cent "had identified a fraudulent element".

"For good or ill the agency has become a lightning conductor for those wanting to report [alleged fraud]" she said.