Ministers will change the law to allow the CSA access to confidential records held by credit rating agencies to establish an accurate picture of wealth and earnings.

Under the present law, only banks and credit card companies have full access to the data held by credit agencies. They hold vast quantities of material on personal spending and debts to determine whether consumers can take on new credit cards, store cards and mortgages.

Ministers say the move will help the CSA to build a more realistic picture of earnings and ability to pay, and challenge the claims of absentee fathers who say they cannot afford to support their children.

The move will be announced by John Hutton, the Work and Pensions Secretary, on Thursday with other measures to tackle the hard cases of fathers who do not pay maintenance.

The Government is braced for criticism, however, that its plans do not go far enough. It will be almost impossible to apply the new law on credit rating data retrospectively, meaning that thousands of old cases may go unsolved.

Ministers have also shied away from some of the more radical proposals to scrap the CSA altogether and hand its responsibilities to Revenue & Customs. To try to head off criticism, Mr Hutton will announce another review into how the backlog and hard cases can be cleared up.

Meanwhile, the focus of the CSA will shift towards collecting cash, with private debt collectors called in for the most frequent defaulters.

Electronic tagging and curfews will also be introduced against persistent defaulters. Mr Hutton will argue that neither penalty will affect the ability to hold down a job and meet maintenance payments.

The CSA, which is chasing more than £3 billion in outstanding payments, has been reluctant to use many of the punishments at its disposal, such as taking away driving licences, in case it affects earnings. Poverty campaigners will say, however, that the Government has not gone far enough to boost the incomes of some of the poorest households.

The Institute for Public Policy Research, new Labour’s favourite think-tank, will today urge the Government to take the plunge and give Revenue & Customs powers to take payments from source. In a new report it will compare the performance of the CSA with that of the Australian system, where earnings are deducted by tax officials to pay for maintenance.

“Imposing additional penalties on a failing system is unlikely to improve the amount of maintenance support collected,” Kate Stanley, head of policy, will say.

“What works so well in Australia is the support given to encourage voluntary registration, but this is backed up by the threat of intercepting income through the tax system. Most fathers want to be involved with their children, but the CSA deals with those at the sharp end of conflict. You can’t separate financial support from contact and access. The longer the CSA takes to resolve a case, the longer problems persist. Getting the CSA working better could make a big impact on child poverty and children’s contact with their fathers.”

The CSA has lurched from crisis to crisis since it was first established in 1993. Stephen Geraghty, its new chief executive, has been undertaking a root-and-branch review of the organisation and is behind most of the new proposals.

AGENCY IN CRISIS

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