CSA faces a lengthy process to resolve policy problems

Work and Pensions Secretary John Hutton faces the challenging responsibility of sorting out the troubled Child Support Agency (CSA).

How far his previous role, as Cabinet Office minister with responsibility for the eGovernment Unit, is influencing his approach can only be guessed.

But since becoming Secretary of State in November, Hutton’s response to the agency’s problems suggests an appreciation of the complexity of a situation that has been too easily written off as a ‘government IT disaster’.

CSA chief executive Stephen Geraghty, who only joined the agency in March 2005, produced a Strategic Plan shortly after Hutton’s appointment.

He recommended a £300m three-year scheme to solve the problem of migrating cases from the old computer system onto the new EDS-supplied CS2 system, and of converting them so that maintenance payment levels are calculated using a new formula introduced in 2003.

But Hutton has taken a more decisive approach. He told the House of Commons earlier this month that the CSA is not ‘fit for purpose’, and has asked former Liverpool City Council chief executive Sir David Henshaw to report on how the agency might be redesigned.

In the meantime there will be £120m for three years’ worth of interim improvements, including manual processing of the tens of thousands of cases inexplicably stuck in the old IT system, and migration of cases to the new system but without conversion to the new formula.

Over the troubled history of the CSA, CS2 and EDS have come in for considerable criticism. But last February a Commons Work and Pensions select committee report on the agency concluded IT was only part of the problem.

It has taken a year, and a new Secretary of State, for the point to filter through, but at a meeting of the same Commons committee last month, Hutton said: ‘A large part of the issue is not just the agency’s performance, it is the policy the agency is trying to administer.’

So to what extent can the CSA be labelled an IT disaster, and what lessons can be learned?

Notwithstanding the acknowledgement of fundamental flaws in the organisation, there is no doubt the IT has also failed.

At last month’s select committee hearing, Geraghty said: ‘There is no debate that the system as it was delivered was anywhere like fit for purpose.’ And even with the improvement plan now in place it will not be able to meet the original 2001 specification until 2007.

There are still more than half a million cases on the old system, more than a quarter of a million new applications waiting to be cleared, and tens of thousands stuck. There are also 500 known faults, Geraghty told MPs, and those specifically causing cases to stick will not be fixed until the end of this year.

A key factor is the looseness of the original specification.

‘The root can be traced back to the original contract negotiations, which failed to achieve sufficient alignment between the expectations of the government and of EDS,’ said Ovum analyst Georgina O’Toole.

The situation was aggravated by the deal being structured as a Private Finance Initiative (PFI) – a model since ruled by the Treasury as unsuitable for technology programmes.

The PFI model means all the up-front investment is made by the supplier. So if the specification is unclear, the level of investment may suddenly jump when the customer, in this case the CSA, clarifies its expectations after the deal is signed.

But Hutton is right to look deeper for an answer to the CSA’s woes than the IT problems.

The new IT was only one part of a programme that included significant changes to procedures and staff roles – insufficient leadership, training and attention to cultural change added to the problems caused by underperforming IT.

The government’s approach to IT is back-to-front, says Work and Pensions committee chairman Terry Rooney.

‘The lesson of all of this is that IT can seldom match policy intentions,’ he said.

‘The government should talk to the IT people about what it wants to do, and how that might be done first, rather than devising policy, passing legislation, and then trying to get an IT system that will do it.’

The CSA... in 30 seconds

What has happened and how much has it cost?

• The CSA was set up in 1993 to assess, calculate, collect and enforce the maintenance payment responsibilities of parents who live apart from their children.

• In 2003 a new scheme was introduced, using a different formula for calculating payments. Supplier EDS signed a 10-year deal in 2000 for the technology, called CS2, to run the new formula. It was due in 2001, but did not go live until March 2003.
  
  
• The deal was worth £456m, plus additional work of £30m. But £107m has been withheld because of performance issues, and another £17m is being retained, dependent on a step-by-step plan to fix the 500 known glitches by 2007.
  
  
• The CSA runs about 1.5 million cases: 624,000 old cases on the old system, 546,000 new cases on the new system, and 305,000 old cases on the new system.
  
  
• Of the one million cases on CS2, 17,000 are being processed clerically and tens of thousands more are stuck.
  The CSA contract was the last Private Finance Initiative deal for a technology programme before the Treasury ruled the model was unsuitable.
  
  
• Sir David Henshaw’s review is due before Parliament’s summer recess. Legislation needed to alter CSA policy could be in October’s Queen’s Speech but operational changes are unlikely before 2008.

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