MPs say management style, not just technology, to blame for CSA woes

Future of the Child Support Agency is on the line after the release of a damning report

Future of the Child Support Agency is on the line after the release of a damning report

In one of the most damning reports ever seen on government IT, the House of Commons Work and Pensions Committee last week outlined how IT system failures have caused an increasing backlog of unresolved cases at the Child Support Agency.

But the committee members do not simply pin the blame on technical errors. "We believe the problem to be more organic and systemic," the report said. "Correcting the [IT system] CS2 problems will help, but will not, on their own, bring the CSA to an acceptable standard of service to the public."

The lack of transparency and accountability, poor planning, absence of management information and breakdown in communication with its IT contractors all contributed to the catastrophic implementation of the new system at the CSA, the MPs found. As a backlog of 30,000 families waiting payment builds up each month, the report shows many problems contributing to the failure are yet to be resolved.

The MPs launched their inquiry into the CSA's performance after it became clear that, despite the introduction of a simpler system of calculating maintenance payments for new cases in 2003, a backlog of claims was building up.

The MPs found the £456m system from US-based EDS was "nowhere near being fully functional and the number of dissatisfied, disenchanted and angry customers continues to escalate".

The problems were not simply a result in technology failures, something which ministers have repeatedly cited as the root cause of the backlog at the CSA, the committee found. It said a poor management culture was also to blame.

A key indicator of this problem is the gulf between the accounts given to the committee by the department and its IT contractor EDS. Although Department of Work and Pension ministers, who oversee the CSA, and senior management of the agency tend to blame the poor IT system problems at the agency, EDS, while admitting systems problems, also highlighted management issues, staff culture and lack of training.

The two parties also failed to agree on the date when the new IT systems would be ready to take cases from old systems. The secretary of state has told Parliament that migration to the new system could take place in spring this year, but EDS told the committee that the system had been ready for data migration since early December last year.

Meanwhile, the department is withholding millions of pounds of payments to EDS, and the IT services company is contesting the ground for withholding payment.

Should this dispute come to court, the CSA might not be in a strong position. It did not reveal the grounds for withholding payment to the committee and its chief executive admitted he had "not attempted to make a specific calculation of the amount of [CSA staff] time which has been lost as a result of IT problems".

Although versions of events differ between the two main parties, MPs investigating the failure said their attempts to find the root cause were thwarted by civil servants and ministers who were unwilling to hand over vital information.

The committee said it had no access to policy or strategic planning documents that led to the IT contract being signed. The committee was left to conclude from subsequent evidence that the department had underestimated the business transformation needed to make this IT project succeed.

Instead of focusing efforts on building a partnership with the IT supplier to achieve the business change required to implement the new system effectively, DWP officials were simply trying to offload risk to the supplier and avoid blame if anything went wrong, the committee found. The DWP told the committee it would not repeat such problems.

The committee also noted that the DWP seemed not to have considered the consequences of a worst-case scenario, where EDS decided to write off the contract and walk away from the project. "If EDS had repudiated the contract, the reform programme would have stopped and the system would have collapsed," the MPs said.

Whatever happens next, the committee's report is unlikely to be the last investigation into this IT failure. The MPs have recommended that the National Audit Office studies the background to the CSA deal with EDS. By then the DWP may be able to share the lessons from this catastrophe.

 Department tried to avoid culpability rather than solve problems - MPs

"The department appears to have been determined under the old Public Finance Initiative rules to shift the risk of development of the new system away from itself entirely onto the shoulders of the contractor.  

"Priority appears to have been given to avoiding culpability instead of establishing an effective partnership to achieve the extent of change needed to turn a decentralised, paper-based business model into a centralised system, working in an entirely new screen-based environment with all communications based on phones, not paper. We are told that this kind of mistake will not happen again." 

Source: House of Commons Work and Pensions Committee report, Child Support Agency (HC 44 - I)

 Should the committee have ordered an independent audit of the CSA?

"It is not possible for the committee to make judgments on why the IT contract with the contractor EDS went so badly wrong. We have not had access to any of the policy or strategic planning leading to the agreement being signed," said the Works and Pensions Committee report. 

After an investigation lasting longer than a year, in which ministers were questioned, the suppliers and civil servants, including the head of the agency, the unions and the agency's stakeholders were interviewed, the Work and Pensions Committee was unable to ascertain what had gone wrong. 

The committee was left to grapple with opinions rather than facts. It found the views of suppliers conflicted with the view of civil servants and ministers.  

Faced with this, the committee decided not to order an independent audit, although this would have provided the facts on which to make a judgment on whether the agency should survive or not.  

The committee felt that an audit would distract the agency when it was trying to get its house in order. The management of National Air Traffic Services made a similar claim when faced with an independent audit by consultants Arthur D Little, ordered by the House of Commons Transport Select Committee. 

The Transport Committee rejected Nats' objections, and the result was a series of recommendations by Arthur D Little which were mostly enacted and saved Nats and its troubled air traffic control computer project.    

Far from proving a distraction, the audit by Arthur D Little focused the minds of management on weaknesses in their strategies, contingencies and adhering to good management practices.  

It also highlighted structural, cultural weaknesses in the way bad news was handled: Nats' management could not admit the severity of the agency's problems and so could not deal with them. This has parallels with the CSA where officials have blamed systemic and structural problems on the IT.    

 Failure to understand change management   

"It would appear, however, from all the evidence that has become available... that the department wholly failed to comprehend the scale of the business transformation that was required to achieve a successful outcome of the proposed reform before any new IT considerations came into play."  

Source: House of Commons Work and Pensions Committeereport, Child Support Agency (HC 44 - I)   

Mixed messages from ministers and the EDS

There have been mixed messages on the extent of the IT problems and when they would be fixed, the committee said. Department of Work and Pension ministers and the senior management of the Child Support Agency tended to blame poor IT systems for the malaise of the agency. The CSA's chief executive said, "At the heart of the issues on implementation have been the difficulties we have faced over 18 months with the computer system." 

EDS, however, claimed that the IT problems were largely remedied and the problem was one of management, staff culture and lack of training. In a radio interview in October 2004, the EDS manager for the CSA's IT system, CS2, said, "By the end of this year, we will have given the agency the tool to do the job." 

But the chief executive of the CSA told the MPs, "We will have completed the recovery of the system by spring of next year [2005]." 

In a Parliamentary debate on 9 December 2004 the secretary of state, referring to the problems with CS2, said that although an upgrade of software had recently been installed, there remained a further upgrade, version 3.6, which needed to be installed before migration could begin "in the spring". According to the committee, this still seems to conflict with the information given to MPs by EDS that, "The new version of software implemented on 6 December provides the capability to migrate cases from the old to the new system." 

Source: House of Commons Work and Pensions Committee report, Child Support Agency (HC 44 - I)

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