Work and pensions secretary Peter Hain has been accused of offering a "glib" response to a scathing parliamentary report on the doomed Child Support Agency (CSA) and its IT systems.

The report from the powerful Commons public accounts committee revealed that the CSA's IT system still had 500 defects three years after it was built – and an improvement plan would cost up to £320 million. Reforms to the child support system have already cost more than £539 million since 2000.

The CSA was scrapped a year ago, speeded on its way by a damning National Audit Office report into the £456 million CS2 case management system, provided by EDS under a 10-year private finance initiative contract.

The government plans to set up a new Child Maintenance and Enforcement Commission (CMEC), although work and pensions minister James Plaskitt has admitted that it would inherit the CSA's crisis-ridden IT systems and contracts.

The public accounts committee warned that, having outsourced most of its IT capability to EDS, the Department of Work and Pensions "did not maintain the capability to be an intelligent customer."

It added: "A number of poor operational decisions went unchecked or unchallenged, not least going live with an IT system that had 14 critical defects."

In response to the MPs' report, Hain said: "We know that previous reforms have not worked. That is why we are replacing the CSA with a radically different child maintenance system. We have learned lessons from the past.

"The new system will lift children out of poverty, give power and choice to parents, enforce responsibilities, and deliver value for taxpayers."

But Liberal Democrat work and pensions spokesperson Danny Alexander hit back.

"What he's saying frankly isn't true – what they're proposing isn't a radically different system. What they are in fact doing is taking the old CSA system and the new CSA system – which are both failing – into the new CMEC system."

Alexander added: "His statements are frankly glib, given that ex-prime minister Tony Blair admitted nine years ago that the CSA had lost public confidence."

In March the Commons work and pensions committee warned there was "no evidence" that CMEC and its IT system would avoid a repeat of the CSA fiasco.