The decision to run down the Child Support Agency raises questions about millions of pounds of new investment in the agency's systems.
Last week John Hutton, secretary of state for work and pensions, said the agency had "failed". He said both the agency and the policy underpinning it were not fit for purpose and commissioned a report.
Ministers have repeatedly blamed the poor performance of the agency on its IT systems, built by EDS, though officials at the agency have privately told Computer Weekly that they were also beset by poor quality data, particularly the information held on claimants and on absent parents.
An independent report published last year, commissioned by the CSA's parent organisation, the Department for Work and Pensions, found that poorly paid, demoralised staff knowingly entered false information into systems to get around software controls, deleted cases for no good reason and stockpiled claims, not putting them into the systems for years.
Ministers and officials want to run down the agency's new work from about 2008 or 2009. They want a report published before parliament breaks up this summer, laying the groundwork for legislation that could lead to the CSA taking on no new cases.
But this run-down could mean that the transfer of all the hundreds of thousands of cases from the agency's old IT to simplified calculations operated under the new CS2 system never takes place, despite EDS being paid to provide major releases of software to help the transfer and make the technology more user friendly.
One of the most important of those changes was the addition of a "notepad", which was ruled out in the original design of the software. Designers of the original system wanted to stop staff entering free text into a notepad instead of into defined database fields. This was because free text could not be captured and used in calculations and case assessments.
But as staff were unable to record details of telephone conversations, many claimants found they had to explain their cases anew each time they called the agency. Under a change request to EDS, a notepad has now been added.
EDS' CS2 system
A new case management system, CS2, was introduced in March 2003, a month after the Office of Government Commerce conducted a Gateway 4 review of the technology's readiness for service.
It concluded that although there were risks, a March go-live date was acceptable. The system initially suffered major technical problems. Although the reliability improved in time, ministers continued to blame EDS' £456m system for the agency's difficulties.