CSA faces major reform after being branded 'not fit'

The Child Support Agency will be branded as "not fit for purpose" today as the Government announces a major shake-up of its operating procedures.

A two-stage plan to turn round the agency responsible for child maintenance will be announced in a Commons statement by John Hutton, the Work and Pensions Secretary. The agency was hailed as a breakthrough when it was set up in 1993, but has since been plagued by problems.

Mr Hutton, who will pledge a fundamental redesign of the agency, will announce short-term measures designed to improve the amount of maintenance received by the half a million children on its books.

To ensure more absent parents meet their responsibilities, private debt collectors will be brought in to improve the collection rate and allow the CSA to devote more time to making accurate assessments. For the first time, the CSA will have access to credit card bills and the records of credit rating agencies to prevent parents hiding their wealth.

Easier methods of paying maintenance will be introduced, such as by credit and debit cards. These changes will be approved quickly by a vote in the Commons and Lords.

In the medium term, changes to the CSA will be proposed by a review to be carried out by Sir David Henshaw. His study, to be completed by this summer, will consider all options, such as breaking up the CSA and linking maintenance to the tax system by allowing Revenue & Customs to deduct payments, the method used in Australia. Ministerssay nothing will be "off limits" in the review.

These structural changes will require legislation, which is also expected to include tougher penalties for absent fathers who shirk their responsibilities. Mr Hutton will defend the two-stage plan, saying it would be wrong to ignore the problems faced by CSA clients while the Government decides the right structure for the long term.

But he will be accused of dithering by opposition parties. David Laws, the work and pensions spokesman for the Liberal Democrats, said last night that, after a year-long review, the Government's decision was to have another review. "The CSA is a shambles and the Government's response is a shambles," he said.

The Liberal Democrats, who want the agency's work transferred to Revenue & Customs, published figures showing the extent of the CSA's problems. It has 108,921 formal complaints in the past two years; 1,960 of the CSA's 9,500 staff left in the 12 months to March last year; and it has cut support and back office staff in the past year.

The report said the CSA had used its powers to withdraw driving licences only 11 times in the five years since it was introduced, despite there being more than 250,000 non-paying absent parents.

Mr Laws said: "The CSA is the most ineffective child support agency in the developed world, collecting just £1.85 for every £1 spent on administration. The amount of money owed to families has rocketed from £1.1bn in 1997 to £3.3bn."