The “fresh start” organisation being set up to replace the failed Child Support Agency (CSA) will inherit its crisis-hit IT systems, work and pensions minister James Plaskitt has admitted.

The axing of the CSA was confirmed in July last year, when ministers acknowledged the organisation had “failed” and was not fit for purpose. The CSA’s demise was hastened by a damning National Audit Office (NAO) report on the £456 million CS2 case management system, provided by outsourcer, EDS under a 10-year private finance initiative contract signed in 2000.

The NAO blasted both the technology – which was given the go-ahead despite more than 50 critical defects – and the way the new system was introduced. The public spending watchdog said work undertaken to resolve the problems with CS2 since it went live in 2003 had “improved the system to some extent” but 600 manual workarounds were still in use.

Department of Work and Pensions (DWP) figures show that at the end of December last year, just 42% of the CSA’s 1.4 million cases had been transferred to CS2, with 58% still held on predecessor systems.

Ministers pledged that the new Child Maintenance and Enforcement Commission (C-MEC), to be established from scratch as a non-departmental public body, would offer a “fresh start”.

But in response to a parliamentary question, Plaskitt confirmed: “The existing IT and contracts will be used by C-MEC once it takes on existing CSA operations.”

A DWP spokesperson confirmed changes to the EDS system would be needed when it is transferred to C-MEC. “There will have to be changes to the current programs because the way (C-MEC) will operate and what they will be asked to do will be different.”

It was not yet possible to say whether this would affect the value of the contract with EDS, she said. “We’re probably still at too early a stage to get into much detail on that.”

The spokesperson added: “EDS continues to work with the department to improve CS2.” She added that the CSA contract with EDS had been renegotiated in 2005, as part of a consolidation of several EDS deals with the DWP, and this had resolved a dispute between the two parties over performance issues and payments.

In his parliamentary reply, Plaskitt said C-MEC would consider “future requirements” for IT services to support the planned new child maintenance system. “It will be responsible for putting in place the necessary arrangements and contracts for IT,” he said.