The Secretary of State for Work and Pensions (Mr Iain Duncan Smith)
Following the spending review and development of this coalition Government’s programme for welfare reform, the Department for Work and Pensions has reviewed from first principles its organisational structure and governance to ensure it is best placed for the future.
Subject to the Welfare Reform Bill achieving Royal Assent, universal credit (UC) will, for example, require DWP to deal not only with those out of work—where the existing Jobcentre Plus network and brand is strong and effective—but also to deal with those in employment, which will account for approximately half of the UC caseload in steady state. Starting from 2013, this approach requires a different organisational structure.
Furthermore, a consistent message that work will always pay can also be reinforced by managing claims for disability living allowance (and, in due course, subject to safe passage of legislation, the personal independence payment) for people of working age alongside those for universal credit. This reform will also mean that support for housing costs are incorporated with pension credit, once universal credit is established and local authorities no longer administer housing benefit.
These structural reforms illustrate the extent to which traditional boundaries, within and beyond the DWP, will change. The breadth of the reforms also puts a premium on the flexibility which comes from removing some of those boundaries, as we build a welfare system fit for the future.
At the same time, the Department will deliver a 40% reduction in the cost of the corporate centre, including the centres of Jobcentre Plus and the pension, disability and carer’s service.
Reflecting all of this, the Department will:
bring all of its day-to-day operations under the leadership of a chief operating officer, within a smaller executive team led by the permanent secretary;
make more transparent, and manage as a single entity, the portfolio of reform to which the Government are committed;
and to facilitate this, remove the formal agency status of Jobcentre Plus and the pension, disability and carers service from Monday 3 October.
By creating a single integrated, senior management structure, the Department has been able to reduce the number of senior civil service roles by almost a third since May 2010.
With the departmental board, now chaired by the Secretary of State and with four non-executives all appointed since May 2011 the removal of formal agency status also enables the removal of separate management boards for each agency. The finances of each agency are already consolidated with the Department’s accounts, but the changes will also avoid two sets of subsidiary accounts, each separately prepared and audited.
I would like to put on record my appreciation for the ongoing efforts of DWP’s front line staff. They continue to deliver important services in local communities and will continue to do so with the introduction of universal credit under this new DWP organisational structure.
Current arrangements for parliamentary questions, correspondence and enquiries from Members will continue unaltered as we deepen our commitment to transparency and professional communications in DWP.
Taken together, this new structure will ensure DWP is well placed to deliver reform for a welfare system fit for the 21st century.