Company involved in CSA computer snags to get new contract

The Texan company involved in the computer problems at the Child Support Agency (CSA) is set to win a big new contract to improve productivity at the same organisation, according to a confidential document seen by The Independent.

The Texan company involved in the computer problems at the Child Support Agency (CSA) is set to win a big new contract to improve productivity at the same organisation, according to a confidential document seen by The Independent.

The contractor EDS - already in charge of a new information technology system which failed to deliver correct payments to seven out of eight single parents - could soon be "co-managing" a substantial part of the agency's operations.

The memorandum reveals that the US company, which was also involved in the biggest computer crash in Whitehall history at the Department for Work and Pensions last November, has been commissioned to help administer a centre which processes new claims in north-west England and Wales.

The three-month pilot scheme is expected to lead to similar arrangements at a dozen such centres in the United Kingdom - and could prompt similar experiments elsewhere in the agency, employees' representatives believe.

The internal document entitled EDS Proposal for Co-Management says that while the initial contract covers a single centre in Accrington, the principle could be extended nationally. The memo, marked confidential, states that the function of the pilot scheme is "to develop, in association with CSA management, a package of alternative practices that can be deployed more widely across the CSA for improving operational productivity".

Doug Smith, who stood down as head of the agency in November, said in his valedictory letter to staff: "It is a computer system that contains fundamental flaws and which is admitted to be 'badly designed, badly developed, badly tested and badly implemented'." He went on to quote Patricia Hollis, the minister in charge of the agency, who said: "The agency's problems start and end with the computer system."

The Government has withheld more than £12m from EDS because of continuing problems with the £456m computer system at the CSA.

Mark Serwotka, general secretary of the CPS civil service union, warned that the pilot scheme could be the start of backdoor privatisation: "It beggars belief that the agency is rewarding a company, which has failed to deliver, with more work and control.

"We are ... questioning the way in which contracts are let and the way in which government departments engage with the private sector. We are fearful that staff who already have one hand tied behind their back by a failing IT system will be angry at the prospect of the supplier of that system telling them what to do. We should be looking at a period of stability, not backdoor privatisation."

A CSA spokeswoman said the agency was working with EDS on improving the effectiveness of its computer service. "Some of their managers will, for three months, be working alongside the agency's in Accrington - seeing the issues involved and hopefully offering suggestions on how our management of the process can be improved. Management will continue to be a matter for the CSA."