Examination of Witnesses (Questions 280-293)
RT HON
ALAN JOHNSON
AND MR
DOUG SMITH
17 NOVEMBER 2004
Q280 David Hamilton: Can I put it to
you that yes, it is extremely difficult, with the changes, with
staff working two different systems, but the uncertainty of how
best they deliver the future, or indeed if they are going to be
there in the future, because some of them will not have the opportunity
to move sideways; they will be walking out of the door. When I
indicated earlier on the anger and the frustration that staff
feel, people do not argue about change just for the sake of change.
What I really believe, and I think many of the Committee members
feel is that the changes should not be implemented until such
time as the systems have been adopted and changed. Then you can
talk in terms of how you deal with staff at that point. To talk
in terms of dealing with staff reductions at the same time as
you do not have a system in operation that is functioning does
not make sense in any organisation.
Alan Johnson: I have accepted
your first point about looking very carefully at the CSA. Incidentally,
they are not operating two systems. They are operating four systems.
It is often said they are operating two systems. They are operating
old scheme on old IT, old scheme on new IT, new scheme on new
IT and clerical. It is even more frustrating than with two systems.
Q281 Mr Dismore: Do you remember the
case of Mrs Preeder?
Mr Smith: I do.
Q282 Mr Dismore: I have some good news.
She got her first cheque last month. The bad news is it took four
years to get there. I think I raised her case in this Committee
on three separate occasions. I had to take it to the Minister.
I think we went to the independent case examiner four times, and
my file is about three inches thick. How many other cases are
there like hers?
Mr Smith: The short answer is
I do not know, and the answer lying behind that is probably too
many, almost certainly too many. I think we ought to congratulate
the people involved in that case in bringing it to payment, which
even after the last Select Committee hearing, as you know, proved
far from straightforward, given the circumstances of the case,
and I think they did really well to have not only got the first
payment in place, but they appear to have got arrangements in
place that will provide a sustainable flow of payments into the
future.
Q283 Mr Dismore: All I can say is that
Mrs Preeder does not share your view of the way she was treated
by the CSA, and frankly, the fact that it took a Member of Parliament
to intervene to get any action at all is a serious problem. It
seems to me that, as far as this Committee is concerned, as far
as the public is concerned, as far as your clients and customers
are concerned, there is only one thing you can rely on the CSA
to do, and that is to let you down. That is the experience of
far too many of our constituents. You said earlier on that you
were severely disappointed with the performance that has gone
on. That equates in Civil Service-speak to a phrase like "economical
with the truth" in terms of under-statement of the serious
problems that the CSA is facing and has faced. We were told when
the new system was going to be introduced—and I think Joan
mentioned we had the inquiry, pre-leg scrutiny, I think it was
in 1998—that this system was going to operate quickly and
effectively. The timetable was long before the last election for
translating even the old cases on to the new system, and it has
woefully and manifestly failed. You have seen the evidence to
this inquiry, and some of it relates to the IT system but a lot
of it relates to other failures. I think, so far as I can see,
the CSA has failed as an organisation. It has failed its clients,
many of whom are greatly disadvantaged and amongst the poorest
in our society. It has damaged those involved, particularly children,
at a time when they may be suffering from the trauma of family
breakdown. What would you say in response to the allegation, or
would you agree that the CSA is a failing organisation, an organisation
that has failed members of the public and the Government, failed
the staff and, more importantly, failed your clients?
Mr Smith: The answer to that is
for tens of thousands of clients it is not seen as a failing organisation.
It is an organisation that provides a regular flow of maintenance
to them, which is hugely important to the financial circumstances
in which they find themselves. Are the number of people who are
receiving a satisfactory level of service from the Child Support
Agency is the level high enough? The answer is almost certainly
not. We need to do more, and I have always accepted that we need
to do more, but I do not think that should detract from the fact
that for a large number of clients, including people who are making
new applications currently, the level of service is a good level
of service and reflects the dedication and commitment of a large
number of people within my organisation, who are striving hard
on a day-to-day basis to ensure that the quality of service that
is provided is the best that is possible, given the support that
they currently have.
Q284 Mr Dismore: I certainly would not
want to detract from the work the staff do in the very trying
circumstances which they describe. You would probably have been
better issuing them with quill pens and parchment than the computer
system they are trying to work with. My concern is this: that
effectively, working through the CSA, it has become a voluntary
activity whether you pay up or do not pay up. The efforts in terms
of enforcement and compliance, as we have heard from previous
questioning is woeful. My question is do you think you have the
right management structure in place, and that you have sufficient
calibre of senior management staff to rescue the agency from the
pit that it has fallen into?
Mr Smith: I think the senior management
in the agency, as I indicated earlier, have done a remarkable
job over the last 18 months in keeping the agency stable and providing
a level of service to those customers that we have provided a
good quality of service to, despite the issues and concerns they
have faced over recent years.
Q285 Mr Dismore: You have already indicated
through the Secretary of State that you are moving on, but that
the reason for moving on is not the failings of the CSA. I have
to put it to you: do you think there is anything that you personally
should have done or could have done to prevent the current disastrous
state that the CSA finds itself in?
Mr Smith: In retrospect, we should
have looked more carefully at the information we had been provided
with around the turn of 2002-03 about the state of readiness of
the IT system.
Q286 Mr Dismore: Do you feel any personal
responsibility for the state it is in?
Mr Smith: I am responsible for
all Child Support Agency activities and have been since I have
been Chief Executive, so inevitably the results over the last
18 months are my responsibility.
Q287 Mr Dismore: What are the three things
that you would say to your successor, whoever it may be, who inherits
this poisoned chalice that he or she should do?
Mr Smith: Number one, to continue
to support our staff, who are doing a brilliant job in, as you
say, in very trying circumstances. Two, to continue to work closely
with EDS to ensure the delivery of the computer system on which
everybody is supporting. Three, stay, as I do, very close to the
views and comments of your clients.
Q288 Mr Dismore: I will pick you up on
the second one that you put forward. Do you think that there is
a case at some stage for saying enough is enough with EDS, and
we should junk the system, as the Australians did, when they found
that their computer contractor simply could not deliver? They
junked the system and brought the design of their system, which
is working wonderfully well, in house?
Mr Smith: I think there is sufficient
evidence before us to support the view that EDS will recover the
existing system and provide a level of computer service into the
future which will support the Agency's activities.
Q289 Mr Dismore: Perhaps I could move
on to Alan with some concluding questions. You have sat and listened
to a lot of the rather castigating questioning that has gone on
today. You have heard a lot about Australia as well. I do not
know if you have the intention of going there, but certainly we
were very impressed, not just by the operation of the scheme but
by the philosophy behind it. I was very encouraged by what you
said at the beginning, that the CSA should not just be a debt
collecting agency, but should follow the philosophy behind the
Australian system, which is one of the reasons that it has been
successful. It is not without its problems; we know that, but
it has worked effectively. It has enthusiastic management, and
it has well trained staff with the equipment they need to do the
job. The phone systems work effectively, and people pay, and if
they do not pay voluntarily, they make them pay; they chase them
round the world to make them pay, and they are very effective
in doing so. I suppose the real question for you, Minister, is
have you reached any conclusions about any radical action which
may be necessary to sort the problems out?
Alan Johnson: No, but I think
your last question to Doug should be a question for me. Would
you pull the plug? That is the radical action, and is probably
the contingency plan as well. My view is that we are in this position
where the system is improving to the degree—and I have just
mentioned some of the aspects of it—that makes it very difficult
to decide that you would go through the real nuclear option, bearing
in mind that pulling the plug means the end of CS2 and the hopes
and ambitions we had for an easier system. It is not an easy option,
but there again, the system is not working well enough yet to
frankly discount that. So I have not come to a conclusion yet,
but as long as the system is improving, the answer to the question
"Would you pull the plug?" would be "no."
Is the system improving? Some of the stuff that I have seen in
my eight weeks suggests that it is, and it is a very important
one about how this computer system is operating. Let us not forget
what EDS's own, independent, analysis said about this computer
system. They said it was badly designed, badly developed, badly
tested and badly implemented. It has been a horrendous problem.
Now we have the situation that, whereas this time last year less
than half of cases were capable of being progressed without major
computer incident, so less than half the CSA cases put into the
system could get through the system without getting stuck or some
other major problem, now we are close to 90% going through without
hitting problems. We have got an improvement, and I take the points
you made about cash compliance and case compliance. Cash compliance,
which is the amount of money we are getting compared to what we
should be getting, is up by 21% since this time last year. Case
compliance is up by 14%. The percentages of cases cleared are
up by 1%, and whilst Vera was absolutely right in that first payments
made, it is 61,000, but we are now doing in a month what we were
doing in a quarter a year ago. So I have to look at whether remediation
is possible. That is all the information that my predecessor got,
which is why he said many of the things he did at previous Select
Committee hearings. What that suggests to me is remediation is
possible, and pressing that button that says scrap the whole system
becomes less and less attractive if we can see the end of this
and the system running properly. But, as I say, I have not reached
a decision yet.
Q290 Mr Dismore: Nobody would pretend
it is an easy decision to junk half a billion pounds' worth of
computer equipment and programming and all the time that has gone
on so far, but sooner or later a firm decision is going to have
to be taken whether this is what we are going to try and make
work or whether it is in the end never going to work effectively.
When do you think you might make that decision?
Alan Johnson: I think the amount
of pressure at DWP questions, this Select Committee, all of that
suggests to me it is not going to be a leisurely decision to be
taken in a couple of years' time, after pondering on it for months
and years. It will have to be a pretty quick decision. Definition
of "quick"? I am not going to give a target for my decision
on this. It is right up the top of the agenda. It is my responsibility.
I have to take responsibility. I can sit here pretty quietly today
and Doug has to take a lot of the flak on this, but next time
I am in front of you, whenever it is, in three or four months'
time, I do appreciate how important this is, because I have had
the constituency cases myself, and it is important to those individuals
out there. So it will be a decision I will be taking in the near
future.
Mr Dismore: We certainly set out a timescale
in our report on the IT system. That is a timescale we felt very
strongly about, and certainly I would hope by the beginning of
next year decisions will be taken. We can always subcontract to
the Australians. They seem to know what they are doing. Putting
that flippant remark aside, it is important that an early decision
is taken because there is no point, if you are in a hole, in keeping
on digging.
Q291 Chairman: Doug, can I ask you finally,
have you made your own decision about what your next career move
will be and when that will be? Is that something that will naturally
take months or longer?
Mr Smith: It will naturally take
a little bit of time to sort that out, yes.
Q292 Chairman: I said this earlier, and
I repeat it, we wish you well as you move on, but that could be
an opportunity too. It could also be another negative factor if
staff see the big cheese actually leaving the ship. They could
draw conclusions from that which could be entirely negative. There
must be, working with Ministers, an opportunity there to say this
could be used as a fresh start. I hope that will be considered
carefully, subject to your own personal needs and requirements,
and we understand that.
Mr Smith: The staff have been
aware for some weeks of my intention to move on. It is not a surprise
to them.
Q293 Chairman: But you will understand
from the evidence that a continuation of this indefinitely, going
on as it is at the moment, is not an option. It just is not an
option. You can look at whatever scale of radicalism that you
use to define how you approach the problem, but something really
needs to happen. The Committee is committed to getting a constructive
outcome. I repeat, we are not interested in scapegoats. We are
interested in public service, and from what we have heard today,
I am still not clear in my mind that there is an end game to this
where I can go back to my constituents and say, "Well, it
will be sorted in X months." That is a worry for us. It is
a worry for everybody. We all need to work hard and we will be
trying to help you with some, I hope, constructive suggestions
about what we might do. It is not easy but we will do the best
we can, and if you give us an undertaking to look carefully, because
I know you look carefully at all our reports, but this one for
us is special. It needs urgent attention. If you are prepared
to give it that degree of attention, I think we would appreciate
that greatly. I think Parliament would. If we do anything less,
I think we will not be doing our job as a Committee properly.
Mr Smith: I will certainly give
it serious attention.
Chairman: Thank you for your attendance.
|
