Chasing the wrong kind of guy: Noble in concept, the Child Support Agency has proved seriously flawed in practice. Rosie Waterhouse reports

EIGHT MONTHS after its launch, the Child Support Agency - once heralded as the salvation of single mothers and the scourge of feckless fathers - is about as popular as the poll tax and VAT on fuel. It is under fire from divorced fathers, ex-wives, new wives, women's groups, advice groups, lawyers, Conservative and opposition MPs and even, less vocally, from the agency's own staff.

So why, if the Child Support Agency was set up with all-party support in April, is it now so deeply unpopular? The Child Support Act, which established the agency, was a major social policy change, intended to bring about a fundamental cultural shift so that parents accepted responsibility for the children they produced rather than expecting the state to provide. Before the Act two-thirds of lone parents were receiving no maintenance from the absent parent.

Yet the reality is that family lives in the late 20th century are messy; many people have second or even third families. If the CSA is to survive, two things need to happen: a fairer method of assessing payments must be found, and an appeals system put into place.

A fairer formula for payment will have to take account of previous divorce settlements and financial commitments. The formula should give agency staff the discretion to reduce an assessment in certain circumstances. And for parents already paying maintenance before April, increased payments should be phased in gradually to give them a chance to adjust their finances, a transitional arrangement currently allowed for some low earners.

At present the formula for assessing maintenance is set in stone. The only expenses it takes into account are 'essential' personal expenses: housing costs plus a personal allowance of pounds 44 a week. Any income above that will be liable for assessment.

The formula does not take into account a whole range of other outgoings such as loans and debts, the cost of travelling to work, visiting the children or having them to stay, or the cost of supporting step-children if their natural father is on low earnings or out of work. A common complaint is that the formula ignores previous 'clean break settlements' in which the absent father may have given the ex-partner the house, or equity from it, or taken on joint debts, in lieu of maintenance.

The second essential reform is to establish a right of appeal to independent arbitration, possibly a court, if the assessment is believed to be unreasonable or causing genuine hardship. Under the existing rules the only right of appeal is if the staff have made a wrong calculation. Unfairness or unaffordability are not grounds.

Frank Field, the Labour chairman of the House of Commons Select Committee on Social Security, which is holding an inquiry into the CSA, summed up the attitude of many of its opponents when he said this week: 'We unanimously support the principles behind the Child Support Act . . . But if the agency is to win public support it must be seen to be fair. And under the present formula it cannot be fair because the formula is flawed.'

The agency's job is to track down absent parents - nine times out of 10, the father - to assess how much child maintenance he should pay and to pass it on to the mother and child. If the mother receives state benefit the Treasury claws it back. If she is not on benefits, she enjoys a real increase in income.

At first politicians gave the impression that the purpose of the agency was to force 'runaway' men - who paid nothing towards the upkeep of the children they had fathered - to pay up. The reality is that the maintenance to be paid by all absent parents will eventually be set by the agency - regardless of whether the mother is on state benefits and even if maintenance has already been mutally agreed or set by a divorce court. From 1997 the courts will have no role in setting child maintenance.

Over the last two months the agency has been working overtime to meet government targets: this year the aim is to take on one million cases and to rake in pounds 530m in savings. The eventual savings target is pounds 900m a year.

By July it was obvious that the targets would not be reached as the rate of sending out forms was slow. It is rumoured that Ros Hepplewhite, CSA chief executive, told Peter Lilley, the Secretary of State for Social Security, that the agency would fall pounds 130m short of the target this year - would this be acceptable? No, he said, it would not.

So in August a 'Closing the Gap' initiative was launched to set the agency back on track. 'Field workers' in the branch offices were enlisted to help send out forms. A leaked memorandum spelled out exactly how they were to help close the savings gap. It caused much embarrassment this week to Ms Hepplewhite and Alistair Burt, the social security minister whose job is to defend the policy, when they were questioned by the select committee.

In the now infamous memo, apparently intended to rally the troops, Dave Moody, divisional manager of the CSA for Wales and Merseyside, said staff should target more profitable cases where the maintenance bills would be high. This was not the time, he said, to be tackling those cases that they knew should be a priority, but which would need a lot of effort to extract money. 'The name of the game is maximising the maintenance yield - don't waste a lot of time on non- profitable stuff]'

Two other revelations this week did not do much for the agency's image, either. A government minister admitted that the Treasury will get pounds 480m of the savings and the million mothers and children will share pounds 50m. And some mothers will get nothing extra: the Government expects 250,000 absent parents (a quarter of all this year's assessments) will not be eligible to pay any maintenance because they are unemployed and on state benefit or very low earnings.

Since the agency stepped up the pace of work - by the end of September it had sent out 527,000 assessment forms - opposition to the CSA (or the CIA as one Glasgow MP, Jimmy Wray, calls it) is on the verge of turning into revolt. There are several groups with differing grounds for complaint.

Some mothers claim they will be worse off because if maintenance takes them just above Income Support level they will lose 'passport' benefits such as free prescriptions, dental treatment and school meals. Some absent fathers say they would be better off unemployed, and therefore not eligible to pay maintenance, because they are left with so little money.

But in the front line of attack are middle income, mainly middle-class fathers who find themselves targeted by the agency. Thousands of them have organised a network of opposition to lobby Parliament and mobilise the media.

They are mainly divorced and separated men who previously paid maintenance, either amicably agreed or ordered by a court, and who now find these arrangements being overturned by an agency of the state. The CSA says average bills will double to pounds 50 a week from the pounds 25 typically set by courts, but many fathers who have contacted the press face a four-fold increase. MPs' postbags are full of genuine hardship cases where fathers are unable to meet all their commitments. One apparently unforeseen consequence is that some say they will have to reduce contact with their children and cut down on treats.

One model for change exists in Australia. The Australian formula takes the absent parent's gross income before tax, less a personal allowance of Adollars 5,000 (pounds 2,300). The wife's income is also assessed and if it is above the average weekly earnings it, too, is taken into account, less her personal allowances and the cost of the children. The child will receive a percentage of the combined income, less deductions, depending on the number of children - 18 per cent for one child, 27 per cent for two, rising to 36 per cent for five or more.

The second important element is the ability of an absent parent to obtain access to a family court where a judge arbitrates on the evidence and neither side is represented in court. The absent parent can seek an order permitting 'departure' from an agency assessment on the grounds that it is too high or unfair. Alternatively, he can obtain an order that an earlier capital settlement can taken in substitution for an agency assessment.

Despite the many flaws in the operation of the Child Support Agency, it is sensible to have a uniform system to replace the previous arrangements where some people had maintenance set by courts, others by the Benefits Agency and two-thirds of absent parents paid nothing. But achieving such a dramatic cultural change will take time and should not be driven by arbitrary financial targets. Savings will eventually accrue naturally. Even if the agency meets its pounds 530m target this year it will be almost wiped out by the pounds 465m that the National Audit Office recently found the Benefits Agency had wrongly paid out in Income Support.

The CSA: its record so far

Lone parents in 1992. . . . . . . . . . . . . . . 1.3m Numbers on Income Support and Family Credit. . . .1.2m Their cost to DSS. . . . . . . . . . . . . . . . .pounds 3.4bn Cost to set up CSA. . . . . . . . . . . . . . . . pounds 12m Running cost 93/94. . . . . . . . . . . . . . . . pounds 105m 93/94 savings target. . . . . . . . . . . . . . . pounds 530m of which . . . Treasury allocation. . . . . . . . . . . . . . . .pounds 480m Lone parents' allocation. . . . . . . . . . . . . pounds 50m Caseload target 93/941m of which . . . not eligible to pay. . . . . . . . . . . . . . . .250,000 already paying. . . . . . . . . . . . . . . . . . 330,000