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The minister in charge of the Child Support Agency(CSA) has said its redesign will not involve ending the IT contract with EDS.

CSA is likely to remain in its contract with EDS but can expect to have the existing £456m IT systems replaced, work and pensions secretary John Hutton said this week.

Hutton has commissioned Sir David Henshaw, former leader of Liverpool City Council, to completely redesign the agency by July - but Henshaw is unlikely to recommend getting rid of the IT supplier.

"I don't expect by the (parliamentary) recess that he'll have redesigned the IT systems," Hutton told MPs on the Work and Pensions Committee (DWP). "David Henshaw is not looking at operational issues today. He is not going to recommend that we break away from the contract with our suppliers."

Henshaw is, however, expected to produce a more "cost effective system" and will look in detail at the IT.

"Is it his remit to have a functioning IT system? Yes," Hutton said. "What will that new IT system be? I don't know. Sir David Henshaw is looking at designing a new IT system."

Conservative MP Justine Greening pressed Hutton and the CSA chief executive Stephen Geraghty on the contract with EDS. She claimed the supplier had the government "by the short and curlies" and said that CSA policy had been "set in IT concrete".

Geraghty revealed that the DWP is withholding £17m to EDS, which does not get paid until the supplier "remediates" the faults with the IT.

"Where we are with EDS is that we have an agreed series of software releases, getting us to the position that by 2007 we will get the IT systems to where they were originally specified," said Geraghty.

The next major software release is to take place on March 27, he said.

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