ATTEMPTS to reform the troubled Child Support Agency have been a “complete disaster”, costing more than £1 billion and ranking “among the worst public administration scandals in modern times”, the chairman of the Public Accounts Committee said last night.

Edward Leigh said that it “beggared belief” that the reforms, introduced in 2003 in an attempt to simplify the child support system and speed up payments, had in fact made matters worse on every single measure of performance.

The Conservative MP for Gainsborough made his comments ahead of the publication today of one of the most damning reports ever to come from the public spending watchdog, the National Audit Office, which reported that the total cost of introducing the reforms is expected to reach £1.2 billion.

This includes the £800 million to introduce a new and complex computer system and to restructure the agency, plus a further £320 million “Operational Improvement Plan”, which is being introduced to reform the failed reforms.

Mr Leigh accused the Government of ignoring warnings not to introduce a new, complex IT system into the CSA at the same time as restructuring the agency. “The new system was brought in and, as night follows day, stumbled,” he said.

The report shows that while accuracy levels of maintenance assessments were running at 84 per cent under the old system, these are at 81 per cent under the new system. Compliance rates under the old system were 75 per cent, compared with 67 per cent under the new system.

Paul Cannon, a director of the NAO, said the report was the hardest-hitting he had come across in 39 years as an auditor. “The Government has already stated that it is not fit for purpose. It is a pretty stark fact that that judgment is correct,” he said.

He pointed out that the Department for Work and Pensions had failed to put a contingency plan in place in case anything went wrong when the system was introduced, even though it had been aware of “critical defects” in the system. There are now some 500 defects in the IT system.

Mr Cannon said that using the Private Finance Initiative procedure to finance the reforms had been a mistake. A partnership approach would have been better, but instead the CSA had handed over the project to the IT contractor EDS, and failed to keep a close watch on developments.

This was partly because it did not have the in-house technical know-how, since many of its own IT staff had gone to work for EDS. The contractor has now agreed to reduce its charges for the new system from £456 million to £381 million.

Mr Cannon likened the CSA to a householder who fails to spot anything wrong when the plumber he has hired to install a new heating system puts all the radiators in one room. “When you buy a plumbing system, you don’t need to know all the nuts and bolts, but you do need to have enough technical knowledge to know that you want the radiators to be in different rooms,” he said.

The CSA has been troubled since it was first introduced in 1993. The original system required agency staff to deal with 100 pieces of information to work out a maintenance payment. The Government has now indicated that the agency might be replaced with a new slimline body that will “track and enforce” payments only in the most complex cases, leaving most couples to sort out their own maintenance arrangements with the help of national guidelines that will advise on appropriate levels of child maintenance.

Although the agency has collected a total of £5 billion of maintenance since 1993, £3.5 billion in uncollected maintenance has built up — 60 per cent of this is deemed unrecoverable. There is also a backlog of 300,000 cases with 36,000 cases stuck in the system. Mr Cannon noted that the Australian child support agency appeared to work because its close links with the tax authorities enabled it to locate non-resident parents and to find out how much they earned.

Kate Green, chief executive of the Child Poverty Action Group, said that the failure of the agency reforms had caused hardship and distress for many of the poorest families.

LACK OF SUPPORT

36,000 cases stuck in the system

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