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

Government considers scrapping case management and telephony systems developed by EDS

LONDON -- After continuous computer failures forced the top civil servant of the U.K.'s Department of 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 (EDS).

The computer system, launched on March 3 last year by the Plano, Texas, 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 only took his current job 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," Johnson 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 U.K. declined to comment or to confirm the legitimacy of the EDS 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 £456 million ($844 million) over 10 years. It was launched two years behind schedule, £256 million over budget and was blamed last year for delaying payments to tens of thousands of single parents.

Doug Smith, the Child Support Agency's chief executive, 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 £720 million of support payments remained uncollected. An additional £1 billion is being written off as "uncollectible."

Smith said that he was resigning from his 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 percent of those eligible receive maintenance payments. Under the new system, results sag, with only 50 percent of the 238,122 cases 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 Minster 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 backed away from 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.