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CSA system to go online
The CSA has long been dogged by controversy
A long-delayed Child Support Agency system designed to simplify
maintenance assessments is to be introduced in March, the government
has announced. Work and Pensions Secretary Andrew Smith said he
was now satisfied the new system, which was originally due to come
into effect in April 2002, would "deliver a level of service
our customers have the right to expect".
The new IT system is key to bringing in the much needed child
support scheme with its better, fairer, simpler system of calculating
maintenance. The new formula, designed to be an improvement on its
much criticised predecessor, uses a simple percentage rate of maintenance
payment - based on 15% of the absent parent's net income for one
child and 20% for two children.
Mr Smith told MPs in a statement: "Implementation of the new
IT system is key to bringing in the much needed child support scheme
with its better, fairer, simpler system of calculating maintenance.
"It will help us target resources to make sure that more maintenance
is actually paid, getting more money to children more quickly."
The agency was now "more customer focused" and was collecting
£200m more each year in child maintenance than it was five
"Both my senior officials and I are now satisfied, on the
basis of the careful and comprehensive testing, that the system
will deliver the level of service our customers have the right to
expect," said Mr Smith. Mr Smith told MPs the government's
share of the bill had gone up by about 7% over the term of the contract.
"While any extra costs are unwelcome, an increase on this
scale is not at all unusual for a complex project of this kind and
is justified to deliver this important reform," he said. Mr
Smith said his predecessor Alistair Darling had taken "the
right decision" in announcing last March that the new scheme
would be delayed until the government was confident the new IT was
David Willetts, the shadow work and pensions secretary, welcomed
the announcement "with some relief after years of delay".
But he said EDS, which built the new Child Support Agency computer
system, had blamed interference by ministers for the delay. "We
know the government is going to pay more as a result of this delay
- that implies the government accepts some responsibility for what
has happened," he said.
Liberal Democrat spokesman Paul Holmes predicted the announcement
marked only the start of the "next shambles". Mr Holmes
said the new computer system was postponed in 2001 because it could
not cope with working out simple sums about people's income. He
asked: "How will it cope with a sudden flood of information
when the one million existing cases are transferred to it?"
From 3 March new CSA cases will be calculated using the new rules
and will come onto the system at a rate of 30,000 a month. The existing
1.1 million cases will be moved on to the new system when it is
clear the arrangements are working.
Under the new rules, absent parents with net incomes of £200
to £2,000 a week will be expected to pay about 15% for one
child, 20% for two and 25% for three or more. For those parents
with incomes of less than £100 a week, maintenance will be
set at £5 a week. For those earning between £100 and
£200 a week there will be a sliding scale.
CSA computer system to go live in March
Nigel Morris, Political Correspondent
The long-delayed overhaul of the Child Support Agency will finally
begin, 17 months late and having gone £29m over-budget, Andrew
Smith, the Work and Pensions Secretary, announced yesterday. A new
system of payments will come into force in March after a catalogue
of problems developing the computer technology that will administer
The CSA is switching over to a new, streamlined system of payments,
arguing it will make them simpler and fairer. But the original start
date of October 2001 was delayed to last April and then postponed
In a Commons statement, Mr Smith said that after further tests
on the system, developed by the American company EDS, the Government
had concluded it would "deliver a level of service that is
acceptable". But he added: 'With any system of this size, even
after exhaustive testing, there will be some bugs to be sorted out."
Mr Smith told MPs that because of the delay the bill for setting
up and running the system had risen by 7 per cent, from £427m
to £456m. "The system has proved to be more complex than
had been originally thought and we have reached a negotiated agreement
with EDS to share these costs, with them meeting their share under
the contract," he said. "While any extra costs are unwelcome,
an increase on this scale is not at all unusual for a complex project,
whether in the private or public sector, and is justified to deliver
this important reform."
Initially the system will handle about 30,000 new CSA claims a
month. The 1.1 million existing cases will be gradually transferred.
Under the reforms, absent parents with net incomes between £200
and £2,000 per week will pay 15 per cent of their income for
one child, 20 per cent for two children and 25 per cent for three
or more children. For those on less than £100 a week, maintenance
will be set at £5 a week, and there will be a sliding scale
for those on between £100 and £200 a week. Mr Smith
said: "The new scheme will be more transparent, easier for
parents to understand, easier for the agency to calculate maintenance
and enforce payment, so children get the support they need."
Rounding on Tory criticism of the hold-up, he said: "It was
right to delay rather than rush in with an incomplete system. Let
us remember why we are having to modernise the system. It was the
Tories who rushed this in 10 years ago. They had goodwill on all
sides of the House. It collapsed under its own weight because it
was overly complex."
David Willetts, the shadow Work and Pensions Secretary, called
for more details of reasons for the over-run. He said EDS had blamed
it on ministerial interference, adding: "The announcement only
affects new cases, so over a million families on the existing system
are still in the dark. When will they start to be moved on to the
child support payments ready to go ahead
By Greg Hurst, Parliamentary Correspondent
REFORM of the Child Support Agency is finally to go ahead after
the Government announced yesterday that it was confident that problems
with a new computer system had been overcome. From early March all
new cases for child maintenance will be based on a standard formula
using a proportion of the absent parents net income, rather
than calculated case by case as before.
The 1.1 million child support cases whose payments were worked
out under current arrangements will transfer to the new formula
later when ministers are satisfied that the computer system can
cope. The streamlined formula, under which most absent parents will
pay 15 per cent of net income for their first child, 20 per cent
for their second and 25 per cent for three or more children, was
announced in 1999. Problems with the computer system meant that
its introduction was delayed twice, most recently in March last
Andrew Smith, the Work and Pensions Secretary, told the Commons
yesterday that his department had negotiated a settlement with EDS,
the information technology company, to share the higher costs arising
from the delays. The Governments share would rise by £29
million to £456 million over the lifetime of the contract,
Mr Smith said.
David Willetts, the Shadow Work and Pensions Secretary, welcomed
the announcement but blamed the delays and higher costs on interference
Kate Green, Director of the National Council for One Parent Families,
said: Thousands of lone parents who for years have scraped
by without child maintenance will be very relieved to learn that
the long period of waiting for reforms is over. It has been
criticised, however, by pressure groups, such as Families Need Fathers,
who argue that it penalises fathers who share the care of their
children and no longer takes account of housing costs or the mothers
The first to pay under the new system will be parents whose liability
for maintenance begins on or after March 3. Ministers expect 30,000
cases a month to be calculated using the formula thereafter. Some
absent fathers may be required to pay more but the change is designed
to make their liabilities easier to calculate in advance.
bust-up exposes its dirty linen
By Jason Nissé
EDS, the Texan technology firm that runs the Inland Revenue and
Child Support Agency computers, has been accused by a former senior
director of manipulating its figures, putting pressure on executives
to resign and spending millions on lavish entertainment for clients
Fred Steingraber, the former chief executive of EDS's consulting
arm, AT Kearney, details the accusations in a damaging legal document,
lodged in a US court last year. The deposition says that EDS chairman
Dick Brown and finance director James Daley inflated the group's
profits by early recording of income from contracts, failing to
record the risk factors on contracts and hiding problems with deals.
The row has blown up at a tricky time for EDS. Last week Andrew
Smith, the Secretary of State for Work and Pensions, said he had
negotiated a settlement with EDS in the long-running dispute about
the Child Support Agency computer system. EDS will have to pay the
DWP up to £30m for delays to the system.
EDS is also close to making a joint bid, with Accenture, for the
£7bn Aspire contract to run and modernise the Inland Revenue
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