The Child Support Agency will celebrate a decade of operation this month when it publishes its 10th annual report. But there will not be much of a party. For the tenth consecutive year, the accounts are expected to be qualified by the National Audit Office on the basis that more than a quarter of its assessments appear to be wrong when investigated by auditors.

If the CSA dealt with only a few people, we would not need be so concerned. But the lives of about one in 17 people in Britain are affected by its decisions. The agency's caseload of about one million broken families affects the financial arrangements of a million fathers, a million mothers and about 1.5 million children.

The deeply controversial brainchild of Margaret Thatcher, the CSA is meant to calculate and collect maintenance from 'non-resident parents' (usually fathers) and pass it on to the 'parents with care' (usually mothers). But the system works extremely poorly for many people.

The cumulative sum of debt shown on the CSA's books - most of it deemed to be uncollectable - is likely to amount to about £3 billion when the 2003/04 annual report is published, probably this week.

'There are some organisations that are almost beyond reform,' says Professor Steve Webb, Liberal Democrat work and pensions spokesman. 'The only answer is to get rid of them.'

Just about everyone agrees that the CSA is in a very sorry state. The Independent Case Examiner, Jodi Berg, who deals with unresolved CSA disputes, saw the number of referrals to her office increase by 52 per cent in 2003/04 and this month she warned against 'the failings of the past becoming an underlying feature of the new child support system'.

A new, simplified system of calculating maintenance was introduced in March 2003 for fresh cases - but cannot yet be extended to 900,000 older files because of 'problems with the new computer and telephony systems', according to Secretary of State Andrew Smith. 'Lone parents are very wor ried,' says a spokeswoman for the charity One Parent Families. 'They have absolutely no knowledge of when old cases will be migrated to the new system. Lone parents are beginning to run out of patience.'

Dealing with the CSA emerged as the major concern in a survey of callers to its helpline earlier this summer.

The Child Poverty Action Group is also anxious about the old and new systems at the CSA. 'All families are losing out,' says a spokeswoman. The fact that organisations such as Citizens Advice and One Parent Families support the principle of the new system is revealing - and at first surprising, given that the amounts paid to parents with care will change and about 40 per cent of them will receive less than they should do now. (Working parents with care will be hit the most since their total household income could go down, while those on benefits will probably see their benefits rise to compensate.)

But One Parent Families would rather see people have entitlements to smaller amounts of money that they actually do receive in preference to having higher theoretical rights which do not materialise into cash.

So what could happen in future to make the system better? One Parent Families wants Britain to follow other countries in having the state to act as guarantor, making maintenance payments if the non-resident parent defaults and chasing up the money later.

The Liberal Democrats (who are far more interested in the issue than the Conservatives) want the CSA to be disbanded and the workload moved to the Inland Revenue which - in its administration of Child Tax Credit - already has much of the necessary information. The calculation system would be very similar to the current system for new cases but there would be a quick appeal system for people in hardship.

In reality, the CSA issue could easily just drag on for another 10 years of unhappy life. 'I don't think there is a plan B,' says Webb. But the agency will continue to attract the scrutiny and criticism of various experts. Two inquiries are currently being conducted through the Department of Work and Pensions Select Committee on the computer problem and on 'the performance of the CSA, with particular reference to the agency's compliance and enforcement regime'.

Such scrutiny might raise the low profile that the CSA understandably seeks in the media. Last year its annual report was put out quietly so that items such as its massive log of uncollected payments went almost unreported.


Stone Age computers, rock-bottom morale

• According to the Liberal Democrats, the computer system works so badly that staff bring in their own pocket calculators. The government is withholding 10 to 15 per cent of its monthly fee to systems developer EDS to encourage them to get the system sorted.



• Morale has always been poor at the beleaguered agency. Callers often find difficulty in speaking to the same person twice about their case. These problems could become worse because the agency is going through a 25 per cent cut in manpower to save costs.



• Basic administrative systems are so poor that 'the agency continues to generate a large number of complaints across the whole of its service', according to Jodi Berg, the independent case examiner. Case files get lost; basic details such as bank details and addresses of non-resident parents go missing; payments to parents with care are delayed for weeks; the administrative interaction with the benefits system (particularly for parents who come off benefits) is often slow and poor. There are many other examples. Despite these problems, many individual staff members do seem helpful - and Citizens' Advice says that it sees far fewer problems than it did in the really bad days of the mid-1990s.



• The CSA has been slow-footed in chasing many non-resident parents who do not want to co-operate.



• There has been, in practice, considerable wriggle room for non-resident parents who are self-employed to give low earnings figures and therefore to pay little maintenance.



• At the end of this month, the Court of Appeal is expected to hear the Smith case, which could affect 50,000 other families.

The father in this case is appealing against a decision by the Child Support Commissioner on his entitlement to set capital allowances against his profits.

When the commissioner heard the case last year, he sided with the mother- a move that raised the father's weekly contribution from £11 to £343.


The new system

The old system started off taking into account about 100 factors when calculating maintenance payments. Under the new set up (which applies to new cases from 3 March 2003 and should be extended to everyone else when continuing computer problems have been resolved), the rules are:

• Non-resident parents earning £200 to £2,000 a week pay 15 per cent net income (after tax, NI and pension contributions) for one child (or 20 per cent for two; 25 per cent for three children).



• Non-resident parents earning less than £100 a week pay a flat weekly rate of £5.



• Non-resident parents earning £100 to £200 a week have their payments established by a sliding scale.

The CSA and computer firm EDS hope to get the problems sorted out by this autumn, but there have been so many delays in the past that some observers no longer expect this to happen this year.

Maintenance through the CSA: the Guide for Lone Parents is available from One Parent Families helpline on 0800 018 5026). See also www.csa.gov.uk

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