Will the CSA ever get its sums right?

THE changes have been long overdue. Since its inception in 1993, the Child Support Agency has been dogged by bad press and complaints. The Government body was set up to retrieve money from parents who were not financially supporting their children, but often it has seemed only to hurt the very people it was trying to help - the children.

In 13 years, thousands of fathers have been left facing unreasonably high demands, leaving them with pocket money to exist on every month when their payments have been made. The creaking system has left mothers and their children on the poverty line with 14 per cent of cases taking more than a year to process.

Some parents, like Peter Phillips, of Loftus, east Cleveland, have been so desperate they have taken their own lives. Mr Phillips, 45, a railway maintenance worker, had been paying the agency almost a quarter of his wages and ended up so in debt he could not even afford a carton of milk. He was found in July 2005, at the side of a track on the edge of the Arlington estate in Loftus. "I have had enough, I can't take no more," he wrote.

Yesterday, Work and Pensions Secretary John Hutton announced there would be a complete overhaul of the system, which contains a backlog of more than 300,000 cases. The review is expected to be announced in the summer and will be carried out by Sir David Henshaw, the ex-Liverpool City Council chief executive. In the meantime, Mr Hutton has announced a £120m emergency package designed to help clear the backlog.

But what will it take for the agency to begin fulfilling its obligations and could the answer lie with Australia's system? We look at some of the issues involved

Q Why is the CSA facing the axe?

A The agency has an estimated £3bn in unrecovered debt and a backlog of 333,000 cases. It takes an average of 26 weeks to process a child support claim but there has been reports of people waiting up to a year. The CSA today has a reputation for ineptitude.

A report commissioned by the Department for Work and Pensions last year revealed that staff knowingly entered false information on a database, deleted files if they didn't know what to do with them, re-routed phone calls to the answering machines of absent colleagues and sent files to in-trays of those on long-term sick.

Blame also lies with the £462m computer system, which has been dogged with operating problems. The system itself came in £56m over budget and two years late and has led to a two tier system being created due to the fact that existing cases could not be carried over on to the new computer system.

Critics have complained that the payments demanded vary between which system you are on. Some on the new system have been known to pay up to half that of those on the old system.

Q What is the Government proposing?

A There are no cheap and quick fixes. The overhaul comes only a year after a review of the CSA which has evidently failed to stem the backlog of cases, which have been rising at a rate of 30,000 a month. John Hutton has promised "tough action" against defaulting parents, including using credit reference agencies to identify potential defaulters and increasing the use of orders deducting payments from wages.

Currently, the CSA's enforcement unit costs more to run than it collects and, as part of the review, £30m will be paid to private companies to collect the debt from parents who don't pay. The cumulative debt on the CSA's books is estimated at £3bn, with around £1bn of that written off as unrecoverable.

Q What can we learn from Australia?

A In the UK, the CSA is investigator, adjudicator and enforcer. But in Australia the CSA operates more like a hub, working with other agencies so that each plays to its strengths, ie the taxation office collects payments. The Australian CSA raises eight Australian dollars for every dollar spent, whereas for every £1 the CSA spends on administration it recovers just £1.85. The Australian system can withhold wages, intercept tax refunds, rental income and investment dividends. It can also issue orders to stop non-payers leaving the country.

But rather than simply penalising non-paying parents, it also operates in partnership with family relationship centres, helping to build communication between separated couples. More than 90 per cent of separating Australian couples with children voluntarily register with the agency.

Q Will the review go far enough?

A It remains to be seen, but the Government will be taking on board the view of other organisations for the new-look child support system. Family law group Resolution, which promotes a non-adversarial approach to family disputes, is recommending increasing the number of staff working at the agency; speeding up the processes and allowing courts to deal with more complex cases.

Some have called for the CSA to be axed and its various functions split between different agencies, as in Australia. But ministers fear this could end up causing more problems. There have been suggestions that the CSA could get greater powers to examine details from tax records, and seek punishment of those failing to pay up.

Q How have people reacted to the proposals?

A Overall, plans for the changes have been welcomed. The political parties are in favour of the review although the Liberal Democrats and Conservatives have condemned the Government for failing to act more swiftly.

Mike Smith, of Durham Legal Services, based at Seaham, County Durham, which deals with thousands of families and their CSA cases, says: "In general, people just want an explanation instead of getting hold of someone like a scene out of Little Britain saying 'Computer says nooooo'. That's the standard of people you get there and it causes a lot of panic.

"I think the secret is looking at the private sector, organisations like ourselves which deal with the real problem cases. If you sit down with either side and work out of a figure then nine out of ten of them are going to say 'yes that's better',".

Why the overhaul is needed

* A 58-year-old man received a letter from the CSA last May saying how he had fathered a son - 15 years after his successful vasectomy.

Michael Williams, of Washington, Wearside, was named as the father of a boy he had never heard of, by a woman he had never met. The CSA admitted it had made a mistake.

"If it was not for the fact that my wife trusts me implicitly, this could have ruined my marriage," he said.

* One father was delighted when he was told he was getting a refund from the CSA. But when Stephen Frizzell, of Fenham, Tyneside, opened his letter he found a cheque for 20p.

* Last August a trucker faced losing his livelihood after reportedly owing £351 in unpaid child maintenance. Billy Dixon lived with his wife Alison and three young children in Northumberland, and paid maintenance for his six-year-old son from a different relationship.

He admitted owing the £351 but insisted he was making arrangements to pay it. He was dazed to receive a letter from the agency threatening him with prison or the loss of his driving licence.