Staff at the Child Support Agency are using pocket calculators to work out what people owe, thanks to the comprehensive failure of its IT system from EDS.
Less than half the 320,000 applications received since March 2003, when the system was launched, has been processed.
The Work and Pensions sub-committee took evidence last week from Andrew Smith, work and pensions secretary. He admitted that the cost of processing applications was 20 per cent higher using the new IT system and told MPs the original contract could have been better drafted. Smith also said the department was looking to reduce its reliance on one provider - EDS provides 85 per cent of the Department of Work and Pensions' systems.
In a written answer, he said: "Technical issues continue to preclude reliable figures on compliance and throughput for the latest quarter. The Department continues to retain around 15–20 per cent of each monthly payment due to EDS, the service provider, due to the continuing problems with the computer and telephony systems. A special exercise is being undertaken to test accuracy to the year-end."
Liberal Democrats say the failure means 95,000 single parents are missing out on payments totalling £45m a year.
Professor Steve Webb, LibDem shadow work and pensions spokesman, said: "It is scandalous that the Government continues to fritter away huge sums of money trying to put the CSA's house in order. Under Labour the CSA has gone from bad to worse. We now have two different systems that don't work properly and thousands of lone parents missing out. Lone parents have been let down and left out of pocket.
"It's high time the CSA was scrapped and the Inland Revenue was allowed to do the sums and make sure people pay up on time."
The £400m computer system was supposed to go live in October 2001 but was finally switched on in March 2003. ®