The Child Maintenance and Enforcement Commission's plan to cut operating costs by introducing a new billing system is at high risk of failure due to growing IT costs, according to the National Audit Office.
The plan is to replace the current system from October 2012. However, the NAO said that the CMEC's plans were 'optimistic' and that the "Commission lacked sufficient internal resources to understand fully how the IT system would be developed".
"Faced with a challenging but achievable target for reducing its spending, the Child Maintenance and Enforcement Commission is relying heavily on the introduction of fees to parents, underpinned by a new IT system. This is a high risk approach with no contingencies if it goes awry," said Amyas Morse, head of the NAO.
The NAO noted that, without the projected income from fees, which will be heavily reliant on the delivery of a new IT system, CMEC's new scheme will actually cost more over the next ten years than the old one – £4.8 billion compared to £4.6 billion. CMEC projects raising £71 million in fee income from parents every year.
The NAO also found that the projected cost of the new CMEC system was growing rapidly, nearly doubling between January and October 2011 from £149 million to £275 million.
It noted that Australian equivalent of the CMEC spends 35p for every pound it collects to deliver its services, while the CMEC itself spends 55p.
CMEC replaced the Child Support Agency in July 2008. In its report, the NAO said that the CSA had major operational difficulties since it's inception in 1993, including underestimation of the difficulties in tracing non-resident parents, calculating amounts due and securing money owed. The CSA introduced a simplified scheme supported by a new IT system in 2003 to address these issues, to remedy the issue, but the NAO audit of those changes found they had cost £539 million and failed to deliver improvements.