The Child Support Agency and its main IT supplier EDS are locked in disagreement about whether the department is justified in withholding about £1m a month in service payments.
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The agency has blamed EDS for computer problems that have dogged the government’s plans to simplify the administration of payments made to and from parents.
But a disclosure this week that the department has sought at least 2,500 changes to the design of systems that support the new "simplified" working processes of the CSA has undermined the agency’s tough stance against EDS.
Independent expert Geoff Reiss, chairman of the Association for Project Management’s Programme Management Specific Interest Group, described the level of unscheduled change requests as "extraordinarily high" even taking into account the system’s size and scale. He said this reflected badly on the planning for the project.
Ministers and top civil servants have said nothing about the number of change requests made by the CSA. Instead ministers have attacked EDS as being mainly responsible for the computer and administrative problems of the agency.
At a hearing of a work and pensions subcommittee in the Commons last month, MPs heard that the EDS system had been assessed as fundamentally sound but had defects. Work and pensions minister Andrew Smith, whose remit includes the CSA, said EDS was working energetically to remedy "a flawed system".
Doug Smith, chief executive of the CSA, said the agency had addressed cultural and business process issues around the new system but the "brutal fact is that the one component that did not work consistently was the IT".
The agency is keeping back about £1m a month, close to the maximum that can be retained, because of what it said are deficiencies in the availability of data that staff need to process cases.
EDS contends that it is not solely to blame for the non-availability of data. The processing of some cases has been held up by computer problems. However, thousands of cases have gone unprocessed because of a lack of information in files, such as a failure to trace the whereabouts of the absent parent or the absence of a national insurance number.
The CSA’s new system should have gone live in April 2002 but was delayed by a year because the Department for Work and Pensions was unsure that the technology would support the agency’s reforms.
The delay and the withholding of money has meant that the agency has only paid EDS about £50m for IT services, even though it is four years into the 10-year £467m contract.
A spokesman for the agency said the department had consulted EDS extensively on the development of its requirements. "In terms of changes made, the level has been within the normal range for systems within this size and complexity," he said.
The withholding of 15% to 20% of payments was "a remedy for deficient service", the spokesman said. However, he said the issues around the withholding of money were confidential and discussions with EDS were ongoing.
EDS declined to comment.