Press Release - Child Support Agency – implementation of the
child support reforms
30 June 2006
The Child Support Reforms introduced in 2003 were a final but,
in the event, unsuccessful attempt to deliver the policy behind the
creation of the Child Support Agency in 1993. With hindsight the
Child Support Agency was never structured in a way that would
enable the policy to be delivered cost-effectively. While the
Reforms have benefited a number of the poorest parents and
children, overall, they have not secured good value for money and
have failed to deliver much-needed improvements in customer service
and administrative efficiency, a report by the National Audit
Office has found.
Reflecting the inherent difficulties in delivering the original
policy, the Secretary of State for Work and Pensions has
commissioned a fundamental redesign of the child support system by
Sir David Henshaw, which is expected to recommend options for
longer-term policy and delivery arrangements.
So far, the Reforms have cost £539 million for a scheme that has
performed no better than its predecessor, although there are recent
signs of improvement. A Child Support Agency operational
improvement plan, involving new investment of up to £120 million,
has been launched to clear the backlog of cases, deal with
operational problems and to enforce payment from parents who do not
meet their responsibilities.
The Department for Work and Pensions and the Agency have learned
lessons from the difficulties they encountered and are taking
action to prevent similar problems in future. The Agency is
building a team of high calibre professionals to help deliver
quality IT systems in future, adopting a more cautious and
realistic approach to planning, building a stronger working
relationship with its IT contractor, EDS, introducing improved
governance arrangements and recognising the need to simplify their
processes in developing IT projects.
Where it works well the Agency manages to secure regular
contributions from non-resident parents and transfer this to the
parent with care or the Secretary of State, where the parent with
care is in receipt of benefits. By the end of 2006, the Agency
estimates that it will have collected over £5 billion in
maintenance payments since it was formed in 1993 and currently
administers 1.5 million live cases. However, the inability to
implement the Reforms effectively has had a significant impact on
the quality of service provided by the Agency. Three years after
their introduction, 61 per cent of the Agency’s caseload is still
dealt with under the old rules and there is currently no date for
the conversion of the 923,000 old rules cases. Although many
parents with care on income support have benefited from the
reforms, some parents with care on Income Support may be losing up
£520 a year in Child Maintenance Premium payable under the new
scheme.
By March 2006, one in four applications received since March
2003 were still waiting to be cleared and there is a backlog of
around 267,000 new scheme cases and a further 66,000 old scheme
cases. On average new scheme cases are taking 34 weeks to clear.
Including the costs of implementing the Reforms, it cost the Agency
70 pence to collect each £1 in 2004-2005. Largely this reflects a
policy design, which requires substantial administrative input to
collect and transfer relatively small amounts of maintenance.
During 2005-2006, however, 81 per cent of the last decisions made
in the new scheme cases checked by the Agency were found to be
correct, up from 75 per cent the year before.
There have been well-publicised problems with the design,
delivery and operation by EDS of the new IT system that have
contributed significantly to the Agency’s difficulties. Nine months
after the system went live an independent review found that its
stability and performance needed significant improvement. A
substantial amount of work has been undertaken since to resolve
defects but many technical problems still exist and some 600 manual
workarounds are needed.
At present there is an estimated £3.5 billion of outstanding
maintenance to be collected, although 60 per cent of this is
considered to be uncollectible. Almost one in three non-resident
parents do not pay any maintenance where the Agency has assessed
money is due. The Agency has not made full use of the range of
enforcement powers it has available to recover debt, but is
starting to do more to get these payments. In 2005-06 it secured
almost 10,000 liability orders from the courts to support their
enforcement efforts. There are also currently 19,000 cases with
enforcement teams for action, out of a total of 127,000 cases where
the non–resident parent has paid nothing despite requests from the
Agency.
It is now clear that the reform programme was over-ambitious and
introducing such a complex IT system was at the upper end of what
was achievable. To develop a new IT system at the same time as
making fundamental changes to the Agency’s business structure added
to the risks of the project, particularly given that the Agency was
already underachieving and overstretched when the reforms were
announced in 1999.
Sir John Bourn, the head of the National Audit Office,
said today:
"The Child Support reforms were a final but, in the
event, unsuccessful attempt to deliver the policy behind the
creation of Child Support Agency in 1993. While they have benefited
a number of the poorest parents and children, overall they have not
achieved value for money and have not achieved what they were
designed to do.
"These problems will have caused genuine hardship and
distress to many parents and their children. From design to
delivery and operation, the programme to reform the Agency has been
beset with problems which the Department for Work and Pensions, the
Agency and its IT supplier EDS, have struggled to deal
with.
"The Agency’s new Operational Improvement Plan is a
significant step towards addressing these difficulties and is
showing signs of improving the Agency’s performance, but, given the
scale of the problems, there will be no quick fix."
Notes to Editors:
- Press notices and reports are available from the date of
publication on the NAO website, which is at www.nao.org.uk. Hard
copies can be obtained from The Stationery Office on 0845 702
3474.
- The Comptroller and Auditor General, Sir John Bourn, is
the head of the National Audit Office which employs some 800 staff.
He and the NAO are totally independent of Government. He certifies
the accounts of all Government departments and a wide range of
other public sector bodies; and he has statutory authority to
report to Parliament on the economy, efficiency and effectiveness
with which departments and other bodies have used their
resources.
Press Notice 49/06
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