Pressure grows on EDS over U.K. government IT system

The government may scrap the EDS welfare-case-management system

After continuous computer failures forced the top civil servant of the U.K.'s Department for Work and Pensions' Child Support Agency (CSA) to step down from his job this week, the government is considering scrapping a welfare-case-management and telephony system developed in large part by Electronic Data Systems Corp.

The computer system, launched on March 3, 2003, by the Plano, Texas-based company, has made payments to only one in eight single parents, department Secretary Alan Johnson told a House of Commons Parliamentary Select Committee Wednesday. The committee is the legislative body charged with oversight of the government department.

Johnson, who took his current job only eight weeks ago, said he is considering the "nuclear option" of pulling the plug on the system altogether and promised he would make a "quick decision" on the matter. "It's right up the top of the agenda," he said.

During the committee meeting, Johnson read from what he said was an internal EDS memo describing the computer system as "badly designed, badly delivered, badly tested and badly implemented." A representative from EDS declined to comment or to confirm the legitimacy of the internal memo.

The system, which Johnson described as "problematic and unstable," involves a Java-based application developed by EDS and is expected to cost the government $844 million over 10 years. It was launched two years behind schedule and $475 million over budget and was blamed last year for delaying payments to tens of thousands of single parents.

Doug Smith, chief executive of the CSA, told the committee that he was "seriously disappointed" that just 61,000 out of 478,000 single parents received payments from the system and that a total of $1.33 billion of support payments remain uncollected. An additional $1.85 billion is being written off as "uncollectible."

Smith also said he was resigning from the job.

Johnson told the committee that despite the extreme computer problems, which had staff "breaking down in tears of frustration," the CSA lacks contingency plans for dealing with the IT crisis and it could not even begin to overhaul the system until the second quarter of 2005 at the earliest.

The committee reported that of the 742,400 cases still operating under the "old" system, or before the implementation of the EDS computer system, only 75% of those eligible receive maintenance payments. Under the new system, only 50% of the 238,122 cases are receiving maintenance payments.

In July, the Select Committee issued a scathing report that characterized the EDS system as an "appalling waste of public money," and called for the entire system to be dumped if it is not fully operational by Dec. 1. The Labour government, headed by Prime Minister Tony Blair, has resisted that deadline.

Speaking on the floor of the House of Commons on Wednesday, Blair again backed away from making any sweeping changes. While conceding that the problems at the CSA are "unacceptable," he rejected calls from opposition Members of Parliament to shut down the entire agency and transfer the responsibilities to the Inland Revenue.

"We will have to sort out the computer problem that has been the cause of the project's problems," Blair said. "It is highly unlikely that transferring [the CSA] to the Inland Revenue will cause anything other than consternation to recipients and the Inland Revenue alike."

Copyright © 2004 IDG Communications, Inc.

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