News analysis CSA faces prospect of Revenue takeover

25 Nov 04
Doug Smith's resignation as chief executive of the Child Support Agency is not so much a solution to a crisis, more the beginning of a new chapter in an 11-year saga.

26 November 2004

Doug Smith's resignation as chief executive of the Child Support Agency is not so much a solution to a crisis, more the beginning of a new chapter in an 11-year saga. Now there is doubt over the future of the CSA itself, with calls for its abolition and the absorption of its functions into the Inland Revenue.

Work and Pensions Secretary Alan Johnson has not explicitly said that the CSA could go, but in his appearance at the work and pensions select committee he told angry MPs that a radical solution was needed. He spoke of a 'quick decision' being necessary on the future of the £456m, 18-month-old IT system, supplied by computer giant EDS, which is blamed for much of the chaos.

Of 478,000 applications for child support received since April last year, just 140,000 have had maintenance contributions calculated and a mere 61,000 have been paid. Amazingly, performance standards have fallen by a third since the 'improved' system was installed. Three-quarters of a million claimants are still waiting to have their cases migrated from the old system.

MPs are furious that an agency intended to ease poverty among lone parents has instead become a bureaucratic nightmare. Two years ago it was revealed that £1bn in maintenance payments arrears had been written off.

According to Johnson, EDS has admitted its system is 'badly designed, badly tested, badly implemented'. 'No comment,' said EDS, when asked for its view, although it is thought that it believes much of the problem lies with the DWP requiring many changes – the figure of 2,500 system alterations has been quoted.

There is a growing recognition, however, that simply replacing the IT infrastructure might not be enough. Liberal Democrats' work and pensions spokesman Steve Webb says: 'Successive governments have failed to get a grip on the whole child support system. It is now like a worn tyre that has been patched so many times it is beyond repair and should be scrapped. The Inland Revenue already holds information about family incomes and about children, so could easily take over the assessment of child maintenance. The Inland Revenue would also be far more effective than the CSA at collecting child maintenance.'

A few weeks ago the DWP dismissed any such suggestions as irrelevant speculation. Johnson's appointment as work and pensions secretary, however, makes it clear that things have changed quickly – the idea is now at least thinkable.

A DWP spokeswoman seems to acknowledge this. 'People think that [the Revenue] is the natural place for this, but a lot of clients are on benefits,' she says. 'Another consideration is that if it is moved to the Inland Revenue, it would still have the same system of child support to deliver, just provided by another department.

'Our secretary of state did say he would talk to EDS about the computer system. There is no point in speculating until this is resolved. There are a lot of options around.'

Nor is there unanimity that the Revenue is the right place to administer child support. It continues to bed in its takeover of the Contributions Agency, it is still integrating tax credits into the department and is about to go through the massive job of joining with Customs & Excise.

Ruth Lister, professor of social policy at Loughborough University, is sceptical about the Revenue taking over another problem area. 'It's not as if tax credits are a success,' she suggests. 'Child support is more like the traditional role of getting money in, but there seem to be an awful lot of problems with tax credits and I would think one would want to see those ironed out first. But the CSA does seem to be beyond reform.'

Despite the DWP's optimistic claims that there are many options, few, if any, seem attractive. Mark Serwotka, Public and Commercial Services union general secretary, argues that the DWP must abandon plans to axe 4,000 staff from the CSA. While this might prevent the chaos getting worse, it hardly counts as a solution.

Of course, it is not the job of a union to provide the answers. The trouble is that there are no signs, as yet, that the government knows what to do either.

PFnov2004

Did you enjoy this article?

AddToAny

Top