MPs on the Department for Work and Pensions subcommittee launched their inquiry in November 2003 after continuing complaints from MPs and the public about an IT-based reform of the Child Support Agency (CSA).
The MPs also wanted information on an IT-based modernisation of the agency's parent organisation, the Department for Work and Pensions, but CS2, the agency's new IT system, is the focus of a large part of the report.
The aim of CS2, supplied by US-based services giant EDS, was to support simplified rules for calculating the payments made or received by divorced parents for the children.
The old system, also supplied by EDS, did little more than calculate payments. Information between the agency and the parents was exchanged mainly by letter. The new system required a major culture change: it allowed staff to answer queries and deal with claims by phone.
Software for the new system ran to 60 million lines of computer code, the committee was told. The project is a private finance initiative worth about £456m. In January 2003, Parliament was told that the department had agreed an increase of 7% in the value of the original contract, in part because the system had proved more complex to develop than originally thought. After awarding the contract the department gave EDS about 2,500 requests for changes to the system design.
When the system went live in March 2003, it was two years late and caused difficulties for staff: some screens went blank and cases could not be progressed.
Hundreds of thousands of parents are still waiting for their cases to be moved from the old to the new, simplified system. Many of them are paying more than they need to because their cases cannot be transferred.
The reasons for the problems are a complex combination of IT and cultural change issues at the agency. "The system is processing new claims so slowly that the backlog of [new] work is increasing by some 30,000 cases a quarter," said the committee. "The slow pace of making first payments is very worrying."
The department has been withholding about £1m a month from EDS, which is about 15%-20% of each monthly payment due. The supplier and the department said the systems are now more reliable than when first introduced, but the government has published little specific information on the results of internal assessments of the £456m CS2 system.
The committee found it "unacceptable that full details about the recovery plan for the system are not available to us".
The committee's report also said it is unclear over the extent to which the problems have been caused by the hardware, software, inadequate data or managerial and organisational weaknesses within the CSA or EDS. The report suggested that if problems could not be resolved, consideration should be given to abandoning the CS2 system.
"In our view abandonment of the CS2 system is preferable to stubbornly continuing with the present situation only to abandon it later when the recovery plan falters," said the committee.
"We recommend that if the new system is not fully operational for new cases by 1 December 2004, the CSA should, by 1 February 2005, make public its contingency plan including various options, in particular the abandonment of the CS2 system in the event that this should become necessary."
- The DWP gave EDS 2,5000 requests for system changes
- The DWP has withheld £1m a month from EDS - 15%-20% for each monthly payment due
- The backlog of (new) work is increasing by 30,000 cases a quarter