CSA: Hutton Counting Off The Days

Work and Pensions Secretary John Hutton will today announce yet another review of the disastrous Child Support Agency. Evidently the current "root and branch" review under new CSA head Stephen Geraghty- in post only since last year- has come up with the wrong answer: to wit, still more government funding is needed. An ambitious minister like Hutton will need no reminding that the public coffers have been scraped clean after eight years of Labour, so the best thing for him is to kick the CSA back into the stinging nettles.

Although he's only been Secretary of State for 3 months, he'll be well aware that the average tenure in the hellhole that is DWP is only 17 months (indeed, his immediate predecessors only did 8 and 6 months respectively). And he can hardly be criticised for adding just one more review to the flood of reviews, enquiries, White Papers, Green Papers, Old Rules, New Rules, etc etc. we've already had since 1997. If he can just keep the balls in the air for another year or so, it will be Peter Hain's turn. As David Laws says, "it's almost beyond parody".

The facts are that the CSA employs about 10,000, and costs us some £0.3bn pa. And ever since its inception in 1993 it has been a case-study in public sector inefficiency: from its fearsomely complex rules, to its lack of proper implementation and follow-through (currently a case backlog of 330,000 and £3.3 billion arrears), to its failed mega IT development (£0.45bn and still not working properly), to its rock-bottom staff morale and rocketing staff turn-over (over 20% pa). It costs us 54 pence for every £1 it collects.

Many, including the government, want to believe it's a managerial problem. And indeed, it does seem to have been an organisational mistake to make the CSA responsible for doing everything itself. Thus the ippr argues we should copy the Australian system where "the CSA operates more like a hub, working with other agencies so that each plays to its strengths. For example, the taxation office collects payments."

Nice idea, but as we've blogged before, HM Customs and Revenue are already wrestling with quite enough "challenges" of their own.

Anyway, the real problem is actually much more fundamental: what the CSA shambles clearly demonstrates is the real world limit on government capacity to solve everyone's problems.

When the CSA was established, although it was spun as a weapon against child poverty, it was actually always intended to reduce public expenditure by making "errant" fathers pay for their "abandoned" children, rather than leaving it to the state. That's a problem as old as welfare, as described in James Bartholomew's excellent book. But what it meant here was that the CSA was always trying to combine its child welfare objectives with the need to claw back state support: hence the thicket of rules to ensure that for every pound paid by the father, the state would pay less.

Now, as taxpayers we applaud the general principle. However, in the real world, if a father- "errant" or otherwise- knows that most of his payment will go to the state rather than getting through to his children, he has little natural incentive to pay at all. And faced with a hugely complicated system operated by an agency in permanent crisis, many have chosen not to.

The government reckons it can sort the problem by means of all those gimmicks like electronic tagging and direct access to credit cards. But what it hasn't recognised is that its own drive to "eradicate" child poverty is actually making the CSA problem worse.

You don't need to go all the way with Melanie, but we must all face up to the uncomfortable truth behind the CSA crisis: as the state provides more, individuals provide less for themselves. And no amount of tinkering with complex claw-back scales and means testing will sort that.