Mothers lose £500 in new CSA fiasco

Single mothers are losing more than £500 a year because of yet another fiasco in the beleaguered Child Support Agency (CSA). The news will be a blow to staff at the agency, which has succeeded in keeping itself out of the headlines after a disastrous start.

Set up in the dying years of the Conservative government, the CSA ran into almost daily criticism because it pursued absent fathers for money without appearing to carry out its supposed purpose of supporting children.

Most of the fathers it targeted were paying maintenance anyway, under court orders, and a large proportion of the money it collected went to the Treasury, by way of cuts in welfare benefits, rather than to single mothers.

Now the CSA has been hit by yet another crisis – this time cause by a failed attempt to update its computer system. Other government agencies including the passport and immigration services, have similarly suffered from delays in getting privately contracted computer systems set up.

The CSA's new computer system should have been up and running in April, but there is no indication yet when it will be installed.

Andrew Smith, the Secretary of State for Work and Pension, wrote to all MPs last month admitting that "there is still some way to go".

What the letter did not mention was that Mr Smith has quietly taken precautions against the possibility that the new system will not be in use until 2005.

The contract to devise the new system was awarded to the Texas-based firm EDS, which is by far the largest supplier of computer technology for government departments, doing about £1bn of business each year with the British government alone.

The CSA contract was expected to cost around £200m, although the delays may add another £50m to costs.

Steve Webb, the Liberal Democrat spokesman on work and pensions, fears that the Government's heavy reliance on EDS and the growing controversy around the use of private firms in the public services means that "EDS and the department are in bed together".

He said: "Even if they could claim compensation from EDS, they won't do it, because they don't want compensation, they want to be able to say that it has all been a great success."

The people most directly affected by the delay are single parents living off income support. Currently, they are not allowed to keep any maintenance collected from absent parents by the CSA. It is all deducted from their benefits. But the new system will allow them to keep the first £10 a week.

Mr Webb said: "This may not sound like much, but it's serious money when you're living off £80 or £90 a week income support."