EDS under fire over £456m child support IT fiasco

IT supplier EDS' role in the "unacceptable" £456m Child Support Agency (CSA) IT fiasco is under further scrutiny following the resignation of CSA chief Doug Smith yesterday.

Smith quit following further criticism over problems with the delayed and over-budget £456m computer system implemented last year by EDS and the backlog of unpaid support payments to single parents.

Fresh reports today quote a leaked internal EDS memo that admits the CSA IT system was "badly designed, badly tested and badly implemented".

The rollout of the system was delayed by two years and since its introduction last March the CSA has had to write off £1bn in claims, while some £750m in child support payments from absent parents remains uncollected.

The system was branded an "appalling waste of public money" by MPs earlier this year, who called for it to be scrapped completely.

A recovery plan agreed with EDS was put in place by the CSA, but on resigning yesterday the agency's CEO Doug Smith said the plan has missed its targets and there is currently no date for when the old child support cases will be transferred onto the new system.

But Smith also denied the system has been a failure and said the situation is getting better.

Works and pensions minister Alan Johnson told MPs that no decision has been made on whether to ditch the CSA IT system but he admitted that it had not improved enough for the government to rule out the "nuclear option".

The government is currently withholding payments of £1m a month to EDS until the problems are fixed.

One of the key problems with the system is the transfer of CSA cases originally opened under the old payment method to the new one and almost three-quarters of a million cases are still stuck on the old system.

In the House of Commons yesterday, Prime Minister Tony Blair admitted the situation was "unacceptable" while the Liberal Democrats leader Charles Kennedy called for the CSA to be scrapped "as a matter of urgency" and its remit transferred to the Inland Revenue.

EDS was contacted but no-one was available for comment.