Reducing costs in the Department for Work and Pensions
The Stationery Office, Jun 23, 2011 - Business & Economics - 33 pages
The NAO reports that the Department for Work and Pensions will have to make rapid progress in reorganising the way it operates if it is to meet its target of achieving sustainable running cost reductions of £2.7 billion while implementing substantial welfare reforms and a £17 billion reduction in benefits and pensions by 2014-15. Since 2007, the Department has reported reductions of £2 billion in its running costs, and initial out-turn data show that it met its target from the June 2010 Budget to reduce running costs by £535 million in 2010-11. However, the NAO has concluded that the Department must make progress quickly in order to be able to demonstrate that it can secure sustained cost reductions in a structured and strategic way. The report recognises that the DWP is only at the start of its new cost reduction challenge. However, without basing its running cost reduction plans more on robust information on the profile of its business costs and how that relates to the value of the services delivered, the Department is not in the position to make rational choices about what it should stop doing, what it should change and what it should continue. Recent cost reductions have been based largely on budget restrictions rather than on fundamental reform of working practices. Three months into the Spending Review and the Department does not yet have a detailed model of how it wants to run in the future.
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2010 Spending Review achieved activity-based costing model administrative benefits and pensions business area business plans business unit Cabinet Office Carers Service cent Change Programme class travel Comprehensive Spending Review Comptroller and Auditor contact centres contingencies corporate centre cost and value cost of benefits cost reduction plans cost reduction programmes cost reductions required delivered Delivery Plan Department confirmed Department has recognised Department’s corporate functions Department’s executive team Department’s plans Department’s settlement developed Disability and Carers example Figure financial management forecast inflation full-time equivalent Future Jobs Fund Group Finance Directorate HM Treasury identify impact improve Jobcentre June 2010 Budget monitor progress National Audit Office October Ofﬁce overleaf Performance Agreements Permanent Secretary processes reduce costs reductions in running reported reductions response Revenue and Customs review outlined securing cost reductions service delivery specified Spending Review period Target Operating Model Transformation Programme Board uncertainties understanding Universal Credit value for money welfare reforms