ABSENT parents who try to hide their wealth from the Child Support Agency (CSA) could be caught by new powers to trawl through tax records and credit references.

John Hutton, the work and pensions secretary, will this week announce that new legislation is to be introduced to toughen the CSA’s powers and restructure the agency.

The proposals are aimed at catching relatively wealthy fathers and mothers, such as company directors and the self-employed, who may try to hide their actual earnings and not pay enough maintenance.

The plans, however, fall well short of suggestions made by Tony Blair last year that the agency might be abolished altogether. According to the “operational improvement plan”, seen by The Sunday Times, Hutton plans to change “radically” the way the agency is organised with much “firmer action” being taken against absent parents.

It refers to the use, for the first time, of data held by the Inland Revenue and information stored by credit reference agencies.

It says this would enable staff to find out the real wealth of absent parents and target them more effectively. The CSA will also be expected to use the data to develop “risk profiles” of the most likely defaulters. Those who have a bad record of paying will have their credit ratings marked to show they are defaulters.

The plans also say that private sector contractors will be employed by the CSA to recover debts. It is hoped that this will lead to more effective collection of money owed, leaving the agency more time to make accurate assessments of cases.

Office for National Statistics figures show that the time it takes for the CSA to clear a new case has risen by 40%, now taking 287 days to process an application — 80 days longer than a year ago.

The figures also showed that one in five calls to its call centre go unanswered, adding credence to the claims of many parents who say they are routinely ignored by the agency.

Last year the prime minister raised expectations that the CSA could be scrapped when he told the House of Commons he doubted the agency was “fit for purpose”.

Hutton hopes the reforms will lead to a more streamlined CSA, and expects the agency to increase its collection rate of maintenance by up to 10% next year and by 25% in 2008.

The minister intends to double the number of staff working on enforcement, “getting tougher” with parents who do not pay and ensuring that cases go “in front of the courts more quickly”.

The plans will be costly, with an extra £90m being required over the next three financial years. In addition another £30m will be made available to pay the fees of external debt collectors.

Earlier this year a report by CSA chief executive Stephen Geraghty revealed that 334,000 families are still waiting for a decision on how much child maintenance they should be paid. It also identified uncollected maintenance payments worth £3 billion.

At the current rate, the backlog would take the agency nine years to clear.

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