avatar UK SPACE AGENCY Services
  • Location: WILTSHIRE 
  • Founded:
  • Website:


  • Page 1

    DEPARTMENT FOR WORK AND PENSIONS ANNUAL REPORT & ACCOUNTS 2011-12 Department for Work and Pensions Annual Report & Accounts 2011-12 (For the year ended 31 March 2012) Published by TSO (The Stationery Office) and available from: Online www.tsoshop.co.uk Mail, Telephone, Fax & E-mail TSO PO Box 29, Norwich NR3 1GN Telephone orders/General enquiries: 0870 600 5522 Order through the Parliamentary Hotline Lo-Call: 0845 7 023474 Fax orders: 0870 600 5533 E-mail: customer.services@tso.co.uk Textphone: 0870 240 3701 The Parliamentary Bookshop 12 Bridge Street, Parliament Square London SW1A 2JX Telephone orders/General enquiries: 020 7219 3890 HC 53 £31.25 Fax orders: 020 7219 3866 Email: bookshop@parliament.uk Internet: www.bookshop.parliament.uk TSO@Blackwell and other accredited agents

  • Page 2

    Department for Work and Pensions Annual Report & Accounts 2011-12 (For the year ended 31 March 2012) Accounts presented to the House of Commons pursuant to section 6 (4) of the Government Resources and Accounts Act 2000 Annual Report presented to the House of Commons by Command of Her Majesty Annual Report and Accounts presented to the House of Lords by Command of Her Majesty Ordered by the House of Commons to be printed on 12 July 2012 HC 53 LONDON: The Stationery Office £31.25

  • Page 3

    This is part of a series of Annual Reports and Accounts which, along with the Main Estimates 2012-13 and the document Public Expenditure: Statistical Analyses 2012, present the Government’s outturn and planned expenditure for 2012-13. © Crown copyright 2012 You may re-use this information (excluding logos) free of charge in any format or medium, under the terms of the Open Government Licence. To view this licence, visit http://www.nationalarchives.gov.uk/doc/open-government-licence/ or e-mail: psi@nationalarchives.gsi.gov.uk. Where we have identified any third party copyright information you will need to obtain permission from the copyright holders concerned. Any enquiries regarding this publication should be directed to the Finance Director General’s Office: Telephone 0207 4495781. This publication is available for download at www.official-documents.gov.uk and from our website at http://www.dwp.gov.uk/ ISBN: 9780102978285 Printed in the UK by The Stationery Office Limited on behalf of the Controller of Her Majesty’s Stationery Office ID 2493024 07/12 21990 19585 Printed on paper containing 75% recycled fibre content minimum.

  • Page 4

    Department for Work and Pensions Annual Report and Accounts 2011-12 CONTENTS Page Annual Report and Accounts 2011-12............................................................................................................. 3 Foreword by the Secretary of State................................................................................................................. 3 The Department’s Ministers ............................................................................................................................. 4 The Department’s Executive Team.................................................................................................................. 5 Executive summary .......................................................................................................................................... 6 Introduction ....................................................................................................................................................... 9 Performance report......................................................................................................................................... 12 Transparency report ....................................................................................................................................... 21 Remuneration report....................................................................................................................................... 42 Financial Overview.......................................................................................................................................... 56 The Departmental Accounts 2011-12 ............................................................................................................ 65 Statement of Accounting Officer’s Responsibilities.................................................................................... 67 Governance Statement 2011-12 ..................................................................................................................... 69 Certificate of the Comptroller and Auditor General to the House of Commons........................................ 85 Report by the Comptroller and Auditor General .......................................................................................... 88 Financial Statements for the year ended 31 March 2012 ............................................................................. 97 Statement of Parliamentary Supply............................................................................................................... 97 Consolidated Statement of Comprehensive Net Expenditure..................................................................... 98 Consolidated Statement of Financial Position ............................................................................................. 99 Consolidated Statement of Cash Flows...................................................................................................... 100 Consolidated Statement of Changes in Taxpayers’ Equity ....................................................................... 101 Notes to the Departmental Accounts .......................................................................................................... 103 Financial Assistance Scheme Trust Statement.......................................................................................... 192 Annex 1: Expenditure Tables (core tables)................................................................................................. 210 Annex 2: Quarterly Data Summary impact indicators and other key data ............................................... 226 Annex 3: Non-Departmental Public Bodies and Public Corporations ...................................................... 233 1

  • Page 5

    Department for Work and Pensions Annual Report and Accounts 2011-12 Annex 4: Sustainable Development ............................................................................................................ 236 Contact details .............................................................................................................................................. 240 2

  • Page 6

    Department for Work and Pensions Annual Report and Accounts 2011-12 Annual Report and Accounts 2011-12 for the year ended 31 March 2012 Foreword by the Secretary of State This report shows the progress we are making in the Department for Work and Pensions, thanks to the efforts of everyone involved. Notwithstanding the difficult financial times facing us all, we at the Department have continued to work within budget constraints, determined to get the Department’s spending back under control. The last year has marked a number of milestones on the path to fundamentally reforming the welfare and pension systems. We have passed the Welfare Reform Act, which paves the way for the implementation of the Universal Credit and the Personal Independence Payment, as well as reforms to Housing Benefit. We have introduced the Work Programme and outlined plans to modernise Remploy, to ensure everyone can receive help and support to enter employment. We have published the Social Justice Strategy, which sets out our vision for ensuring that the most disadvantaged individuals and families can set a foot on the first rung of the social ladder. And we are pushing ahead with our automatic enrolment programme for private pensions, just one of the changes we are making in order to put the country’s retirement system on a stable footing for the future. These reforms are about transforming people’s lives – building a welfare and pension system that helps people move from dependence to independence, from unemployment into work, from addiction to recovery, and from the margins of society to a sustainable life beyond the state. At the same time, this year we have restructured the organisation, making it more efficient and streamlining its management. This has included integrating the Department’s frontline agencies. Now as one DWP, we are as committed as ever to providing vital services, day in and day out, to those who rely on our support. Whilst the next year will be challenging for all of us, as we look to ensure that our programme of reform remains on time and on budget, the work the Department is doing is vitally important and will have a positive impact on millions of people’s lives for years to come. I am grateful to the dedicated and hard-working staff in DWP and our partner organisations, who have helped to achieve so much this year – and who I know are committed to making our vision for the future a reality. Rt Hon Iain Duncan Smith 3

  • Page 7

    Department for Work and Pensions Annual Report and Accounts 2011-12 The Department’s Ministers The Right Honourable Iain Duncan Smith MP Secretary of State for Work and Pensions The Right Honourable Chris Grayling MP Minister of State for Employment Steve Webb MP Minister of State for Pensions Maria Miller MP Minister for Disabled People Lord Freud Minister for Welfare Reform 4

  • Page 8

    Department for Work and Pensions Annual Report and Accounts 2011-12 The Department’s Executive Team Robert Devereux Permanent Secretary Hunada Nouss Director General, Finance Terry Moran Director General, Chief Operating Officer Sue Owen Director General, Strategy Chris Last Director General, Human Resources and Head of Government HR Operations Gill Aitken Director General, Professional Services Joe Harley (until 31 March 2012) Director General, Corporate Information Technology and Chief Information Officer Richard Heaton (until 31 January 2012) Director General, Department for Work and Pensions Transformation 5

  • Page 9

    Department for Work and Pensions Annual Report and Accounts 2011-12 Executive summary The Department for Work and Pensions aims to help people lift themselves out of poverty and stay out of poverty, through work, saving and support. The Department works with other Government departments and the private and voluntary sectors to help achieve this. In 2011-12 the Department delivered and improved the services that touch millions of lives every day. It did this in a very demanding economic environment. It supported jobseekers and employers in a challenging labour market. It administered benefits and pensions effectively and efficiently, by paying customers their correct entitlement and implementing a joint strategy with HM Revenue and Customs to reduce the amounts lost to fraud and error. It worked towards addressing the issues raised by an ageing society and widespread under-saving for retirement. It also began to develop new strategies to enable disabled people to fulfil their potential and to support the most vulnerable people in society. In 2011-12 the Department:  helped around 3 million people into work;  advertised 3.7 million job vacancies for over 330,000 employers;  carried out over 20 million adviser interviews to help people prepare for work;  launched the Work Programme providing support for the long-term unemployed and sick and disabled people claiming Employment and Support Allowance;  developed the Youth Contract, to provide a range of additional help for unemployed young people, that was launched on 1 April 2012;  launched an advertising campaign aimed at alerting employers about automatic enrolment into pension schemes;  helped over 35,000 disabled people remain in work or get a job, enabling them to work on a more equal basis with their non-disabled colleagues;  processed 5 million benefit claims;  supported local authority delivery of Housing Benefit and Council Tax Benefit; and  paid over 20 million customers around £159 billion (including through local authorities and the Department’s other paying agents) in benefits and pensions, accurately and on time. The Department also worked in partnership with its arm’s length bodies to deliver value for money, for example:  with the Child Maintenance and Enforcement Commission to ensure more than 1 million children benefit from combined statutory and family-based arrangements; and  with the Health and Safety Executive to ensure more than 87 per cent of cases obtained for prosecution resulted in a successful conviction. Alongside delivering its day to day services, in 2011-12 the Department continued to face up to the overriding need to put the public finances on a sustainable footing. Between 2010 and 2014, the Department is required to deliver real-term savings of 26 per cent. The reduction in baseline 6

  • Page 10

    Department for Work and Pensions Annual Report and Accounts 2011-12 costs in 2011-12 equated to a decrease in spending of £666 million (almost 10 per cent). The Department lived within all Parliamentary and HM Treasury spending controls and delivered significant savings in 2011-12 through transformation of corporate functions and by improving productivity and driving down unit costs. Provisional figures indicate that the Department’s overall productivity increased by 12 per cent in 2011-12. Whereas overall workloads increased, particularly on labour market interventions and work capability assessments, the Department’s expenditure on delivering its day to day activities reduced. The 2011-12 productivity increase continues the Department’s strong track record on productivity, with year on year increases delivered through the two previous Spending Review periods. The Department’s productivity increased by 14 per cent across the 2004 Spending Review and 26 per cent across the 2007 Spending Review. The Office for National Statistics have confirmed the Department’s productivity is measured in line with standard convention and the National Audit Office describe it as ‘an accredited methodology’. At the same time, the Department led Government efforts to create a welfare system for the 21st century. In 2011-12 the Department began to prepare for the delivery of the Government’s once in a generation reforms. The Department’s four year Business Plan, published in May 2011 sets out the agreed plans up to 2015 for structural reform of the welfare state. The plan set out 57 actions to be completed in 2011-12 and 55 (96 per cent) of these were delivered in year. During 2011-12 the actions the Department took to transform the welfare system included publication of the Pensions Act in November 2011 and of the Welfare Reform Act in March 2012. The Pensions Act 2011, which received Royal Assent on 3 November 2011 made changes to the State Pension age equalisation timetable. This means that from April 2016 women's State Pension age will rise faster than originally planned, so that by November 2018 women’s State Pension age will be the same as men's (age 65), and between December 2018 and October 2020 the State Pension age for both men and women will increase from 65 to 66. The Pensions Act also introduces automatic enrolment into workplace pensions from October 2012. The Welfare Reform Act 2012 received Royal Assent on 8 March 2012. At the heart of the reforms is Universal Credit. This will:  make sure that work always pays by putting clear incentives in place to get people back into work and off benefits; and  put a simpler and more transparent welfare system in place that saves money in administration costs and cuts back on the opportunities for fraud and error. The Department has also started to plan the delivery of the next phase of reforms. The Social Justice strategy published by the Department in March 2012 introduces a new approach to tackling the root causes of poverty based on principles of prevention and early intervention; and of creating a ‘second chance society’. Rather than simply focusing on a person’s income level, it provides individuals and families facing multiple disadvantages with support and tools to turn their lives around. By focusing on social justice principles, the Department will seek to address the issues that heighten the risk of remaining in poverty: addiction, family breakdown, debt, educational failure and worklessness. In order that it can implement these key reforms and continue to deliver more and better for less, the Department began transforming in 2011-12. It went through its biggest reorganisation since 7

  • Page 11

    Department for Work and Pensions Annual Report and Accounts 2011-12 social security and employment functions from the former Department of Social Security and Department for Education and Employment were brought together to form the Department for Work and Pensions in 2001. This made real progress towards creating a smaller, better focused Department. A new Departmental structure was implemented, led by a smaller Executive Team. The key changes are:  A single Chief Operating Officer is now responsible for leading all of the Department’s services to the public. This single role combined elements of the Jobcentre Plus and Pension, Disability and Carers Service Chief Executive roles when executive agency status of these organisations ended in October 2011. If Parliamentary approval is given to the Government’s plans to abolish the Child Maintenance and Enforcement Commission, child maintenance functions will move back into the Department from the end of July 2012.  A single Strategy Director General is now responsible for identifying where the Government’s welfare and pension reforms and social justice agenda should take the Department, looking beyond the individual reforms already underway. This single role combined the forward- looking elements of the three policy Directors General on the Executive Team at the start of the year. The expertise to manage day-to-day policy questions is provided by a dedicated Account Director for each Ministerial portfolio.  Directors General for Finance, Human Resources, Information Technology and Professional Services are the other members of the Executive Team supporting the Permanent Secretary. The Professional Services Director General now represents communications, legal and analytical functions.  A new single change portfolio is managed through one team supporting effective prioritisation of all reform, change and continuous improvement activity. Ending the executive agency status of Jobcentre Plus and Pension, Disability and Carers Service means there is now only one Board and one set of published accounts for the core Department. The Department also restructured and reduced the size of its corporate functions, to drive forward operational delivery and reform across the whole organisation. Substantial efficiencies have been delivered by reducing duplication, streamlining and putting in place a leaner operating model based on best practice. The Department has made the progress it needs to make to reduce the number of people working in the corporate functions so that it can meet its commitment to reduce corporate overheads by 40 per cent in real terms by March 2015 and to live within the budgets set by the Spending Review in 2010. In summary, in 2011-12 the Department simultaneously:  maintained an excellent service to the public;  delivered substantial efficiencies;  made progress towards achieving strategic priorities;  prepared to implement the planned once in a generation reforms;  started to plan the delivery of the next phase of reforms; and  delivered a major organisational transformation. In the year ahead the Department will continue to reduce costs while delivering and improving its services and implementing the Government’s ambitious programme of reform. The Department aims to continue to achieve more and better for less. 8

  • Page 12

    Department for Work and Pensions Annual Report and Accounts 2011-12 Introduction The Department for Work and Pensions is responsible for the development and delivery, whether directly or through others, of welfare and pension policy. It works in partnership with private, voluntary and community sectors to deliver services, and with employers and the Department for Business, Innovation and Skills to train and help people into work and support them to stay there. It is a key player in tackling both child poverty and, through its Social Justice strategy, the root causes of entrenched disadvantage to support the most vulnerable in society realise their true potential. Vision The Department aims to help people lift themselves out of poverty and stay out of poverty, through work, saving and support. The Department’s challenge is to provide vital services to millions of people, whether delivered by the Department itself or through others, while delivering the Government’s once in a generation reforms and rigorously controlling costs and providing value for money for the taxpayer. Strategic Priorities The Department continues to focus on the Government’s values of freedom, fairness and responsibility and aims to put welfare spending on a sustainable footing. The Department’s long term strategic priorities are to:  transform lives by embedding the principles of Social Justice;  encourage people to work and make work pay;  encourage disabled people and those with ill health to work and enable their independence;  provide a decent income for people of pension age and promote saving for retirement;  deliver value for money and reduce levels of fraud and error; and  enhance collaboration across the Department and build on values that put claimants, customers and frontline operations first. Structural Reform The Department has an ambitious agenda of reform designed to create a new, modern welfare system; to transform the opportunity for people without jobs to find work; to build a fairer and more sustainable pension system; and to ensure that the most vulnerable in society are protected. Structural reform plans are set out in detail in the Departmental Business Plan 2012 to 151. The Department is working to deliver the following six structural reform plan priorities over the course of the 2010 Spending Review period:  deliver welfare reform – to introduce the Universal Credit and other reforms to simplify the welfare system and to ensure that the system always incentivises work and that work always pays. The overall reform package will help to make the welfare system affordable in the longer term; 1 http://www.dwp.gov.uk/publications/corporate-publications/dwp-business-plan-2011-2015/ 9

  • Page 13

    Department for Work and Pensions Annual Report and Accounts 2011-12  get Britain working – to implement and manage the Work Programme, an integrated package of personalised support to get people into work – from jobseekers who have been out of work for some time, to those who may have been receiving incapacity benefits for many years;  help tackle the causes of poverty and improve social justice – to develop a welfare system that recognises work as the primary route out of poverty and reduces the number of children in workless households;  pensions reform – to provide decent State Pensions, encourage employers to provide high quality pensions and make automatic enrolment and higher pension saving a reality;  enable disabled people to fulfil their potential – to support more independent living for those who face the greatest barriers by ensuring effective strategic development of evidence based policies for disability benefits. Support disabled people to take up employment opportunities, by developing specialist disability employment programmes which provide employment support for disabled people facing the greatest barriers; and  improve our service to the public – to continue to deliver an excellent service to the public, improving its speed, ease and efficiency. Progress has been reported throughout the year in monthly Structural Reform reports, and in the Department’s Quarterly Data Summary1. Progress across the year as a whole is discussed in the performance report [page 12]. The updated Business Plan for 2012 to 2015 was published on 31 May 2012. Delivery Objectives The Department’s delivery plans are focused on the inputs, activities and outputs the Department needs to deliver to achieve longer-term strategic outcomes. The Department aligns how money is spent, what is done and what is produced to achieve each of its delivery objectives with its strategic priorities. In 2011-12 the Department delivered activities and outputs in the following areas:  Labour Market – the Department and its partners supported people back into work by delivering effective labour market services;  Benefit Administration / Services for working age and disabled people and for pensioners – the Department administered the benefit and pension systems accurately and in a timely way;  Social Justice / Services for children – the Department contributed to cross-Government efforts to reduce child poverty and break cycles of benefit dependency. It developed an approach for providing support to the most disadvantaged and helping them turn their lives around;  Delivery of Major Reform – the Department prepared to implement the Government’s once in a generation reforms of the welfare and pension system; and  Efficiency and Transformation – the Department began a programme of organisational transformation and delivered cost reductions whilst maintaining systems and controls. Plans for maintaining and improving day to day services, for implementing changes to the current welfare system and for delivering structural reform combine to achieve the strategic priorities. 1 http://www.dwp.gov.uk/about-dwp/what-we-do/transparency/ 10

  • Page 14

    Department for Work and Pensions Annual Report and Accounts 2011-12 Organisational Transformation In 2011-12 the Department undertook a major transformation exercise, successfully launching a single Departmental operational business, significantly reducing the size of its corporate functions and restructuring to drive operational delivery and reform across the whole organisation. A new corporate centre design was developed and a selection exercise moved people into the new structure. Between December 2010 and March 2012 the baseline funded corporate function headcount was reduced from 12,254 to 8,278 full time equivalents, a reduction of around 32 per cent. Some corporate centre staff were redeployed in front line delivery roles, enabling the Department to manage workload volumes that remained high in last year’s tough economic climate. The Department has plans in place to ensure it delivers within the budgets set by the 2010 Spending Review. The corporate centre now has fewer layers, enabling greater autonomy and responsibility for all staff. The corporate functions now act as one, championing effective and efficient financial, commercial, people and information technology management across the Department and supporting greater collaboration across team boundaries. This has created transparency, allowing the Department to better determine its priorities, to act faster on those priorities and more flexibly allocate its resources. To achieve its strategic priorities and meet the challenge of delivering more and better for less, the Department needs to harness the talents of its people to encourage them to work effectively as a team demonstrating the behaviours, values and competencies needed to deliver for customers, partners and staff and for Ministers and the taxpayer. 11

  • Page 15

    Department for Work and Pensions Annual Report and Accounts 2011-12 Performance report In 2011-12 the Department maintained an excellent track record of delivery of activities and services against a back drop of economic uncertainty, at the same time as delivering organisational change and preparing to implement ambitious reforms. The Department’s total resource spending increased in 2011-12 by £6.6 billion. Of this, Annually Managed Expenditure increased by £8 billion, while the cost of running the Department reduced by £1.4 billion. The increase in the Department’s Annually Managed Expenditure was driven by the economy, demographics and changes in policy. The cost of running the Department was reduced both by reducing costs and delivering efficiencies, and by moving to a payment by results approach for programmes to get long-term unemployed people back into work. The Department’s spending on investment increased as the Department prepared to deliver the Government’s welfare and pensions reforms. In 2011-12 the Department developed systems and processes required to implement Universal Credit and Personal Independence Payment from 2013. Delivering Reform The Government is committed to ending the culture of worklessness and dependency that has done so much harm to individuals, families and whole communities. This will be delivered through the radical reform of the welfare system that recognises that work is the best route out of poverty for the majority of citizens. Key milestones towards delivering reform in 2011-12 have included the passage of the Welfare Reform Act 2012 and the Pensions Act 2011. The Welfare Reform Act received Royal Assent on 8 March 2012. It legislates for the biggest change to the welfare system for over 60 years. The main elements of the Act are:  the introduction of Universal Credit, a single streamlined benefit which people who are out of work or on a low income can claim, designed to provide incentives for work and ensure work always pays;  a stronger approach to reducing fraud and error with tougher penalties for the most serious offences;  a new claimant commitment showing clearly what is expected of claimants while giving protection to those with the greatest needs;  the introduction of the Personal Independence Payment to enable a more accurate, more objective, more consistent and more transparent consideration of the needs of disabled people today;  creating a fairer approach to Housing Benefit to bring stability to the housing market and improve incentives to work;  driving out abuse of the Social Fund system by giving greater power to local authorities;  reforming Employment and Support Allowance to make the benefit fairer and to ensure that help goes to those with the greatest need; and  changes to support a new system of child maintenance which puts the interest of the child first. 12

  • Page 16

    Department for Work and Pensions Annual Report and Accounts 2011-12 In 2011-12 the Department made considerable progress towards delivering the Coalition Government’s once in a generation programme of welfare reform. 55 of the 57 actions to deliver Structural Reform that were expected to complete in 2011-12 were completed. The two outstanding actions, to publish a response to the Green Paper on Pensions Reform and to put benefit advice and make common enquiries available online will be delivered in 2012-13. A further 24 actions were originally planned for completion in subsequent years. In the Department’s refreshed Business Plan for 2012-15, new actions have been added and the Department now has 77 actions for completion by March 2015. Actions taken during 2011-12 to deliver welfare reform include:  continuing to progress a range of implementation activity for the introduction of Universal Credit from October 2013, including completing the transition and migration plans;  implementing a new Fraud and Error Strategy, jointly with HM Revenue and Customs and the Cabinet Office;  publishing an independent review Health at work – an independent review of sickness absence and how the sickness absence system in Great Britain can be changed to help more people stay in work and reduce costs;  developing an implementation plan to introduce a household ‘benefit cap’ of £26,000 from April 2013 so that no workless family can receive more in welfare than median after-tax earnings for working households;  managing the phased national migration of Incapacity Benefit recipients to Employment and Support Allowance; and  implementing the recommendations from the Harrington independent review of the Work Capability Assessment. Actions taken during 2011-12 to get Britain working include:  rolling out the integrated Work Programme, working with private and voluntary organisations and ensuring that there is no gap in provision;  ensuring delivery partners, for mentoring and for financial support, are in place to support rollout of the New Enterprise Allowance; and  launching the phased national rollout of self-employment support through the New Enterprise Allowance. Actions taken during 2011-12 to help tackle the causes of poverty and improve social justice include:  moving lone parents who are capable of work and whose youngest child is 7 or over onto Jobseeker’s Allowance, before extending the scheme to lone parents with children of school age;  considering the scope of existing plans for child maintenance and assessing future delivery options; and  publishing the Social Justice Strategy report: Social Justice: transforming lives in March 2012. Actions taken during 2011-12 to deliver Pensions reform include:  working with Age UK to establish a new alliance of organisations focused on social justice for older people, by supporting them in the development of a partnership proposition; 13

  • Page 17

    Department for Work and Pensions Annual Report and Accounts 2011-12  restoring the earnings link for the basic state pension with a ‘triple guarantee’ that pensions are raised by the highest of the growth in average earnings, price increases or 2.5 per cent; and  introducing legislation to phase out the Default Retirement Age for employers and individuals. Actions taken during 2011-12 to enable disabled people to fulfil their potential include:  continuing with ‘Right to Control’ Trailblazers, giving disabled people the right to more choice and control over how support and services are delivered to them;  working with the Department for Business, Innovation and Skills to extend flexible working opportunities and support into work for those who wish to seek paid employment;  supporting the Government Equalities Office to consult on proposals for providing extra support to disabled people who want to apply for local or national elected office; and  reform in support of the introduction of Personal Independence Payment, a new benefit to replace Disability Living Allowance and enable a more accurate, more objective, more consistent and more transparent consideration of individuals’ circumstances, from April 2013. Actions taken during 2011-12 to improve our service to the public include:  creating and launching a Bereavement Service to take information once only from next of kin in the case of over 600,000 deaths per year;  simplifying the process for the 330,000 Employment and Support Allowance and Income Support customers who are found to be well enough to work each year;  eradicating unnecessary health and safety bureaucracy, by producing clear guidance for small and medium-sized businesses engaged in lower-risk activities; and  consulting on proposals on the consolidation of health and safety legislation and on the operation of current regulations, including consultation on the Reporting of Injuries, Disease and Dangerous Occurrences Regulations. Further information about the Department’s six Structural Reform Plan priorities, including all the actions delivered during 2011-12, can be found by looking at ‘The Structural Reform Plan monthly progress reports’ on the Department’s website1. Delivering Change The Department also delivered across its change portfolio in 2011-12. It completed Spending Review 2007 projects and the early stages of major Spending Review 2010 reforms. It also prepared for implementation of key reforms from April 2013 and developed new, longer-term strategies to tackle the root causes of poverty and support people to turn their lives around. The Department improved the way it organises and manages its portfolio of change, and how it delivers change in 2011-12. Instead of having projects dispersed throughout the organisation, the management and delivery of all programmes and projects is now gathered together into a single portfolio, and change is managed end to end from inception to frontline. This provides assurance on portfolio deliverability and affordability; allows effective prioritisation; and enables management of the Department’s overall capacity to absorb change. In 2011-12 the Department continued to reassess and move claimants still receiving the older style incapacity benefits to Employment and Support Allowance or other benefits more 1 http://www.dwp.gov.uk/publications/corporate-publications/dwp-business-plan-2011-2015/ 14

  • Page 18

    Department for Work and Pensions Annual Report and Accounts 2011-12 appropriate to their circumstances. In 2011-12 around 130,000 re-assessments were carried out by healthcare professionals from Atos Healthcare using the Work Capability Assessment to help determine entitlement to financial support on the grounds of illness or incapacity. The Government is committed to independently reviewing the Work Capability Assessment for the first five years following its introduction in October 2008. The Harrington Review, published in November 2011, commented positively on the implementation of the 2010 review’s recommendations and made further recommendations to improve the fairness and effectiveness of the Work Capability Assessment. This includes better sharing of information between claimants, Atos Healthcare who carry out the assessments, the Department which makes the benefit decisions, and the Tribunals Service which administer appeals. The Department endorsed and will implement the recommendations in 2012-13 to ensure quality decisions are made and help is given to many more people with the potential to work to get back into the workplace. The Department also improved the tools that support the delivery of services. For example:  A new national reassessment information technology system was rolled out in April 2011 to support Work Capability Assessments. This single system is now used for all disabled people and people with health conditions. This means everyone is treated equally and fairly. Using a single system also cuts down on error and duplication of provision. It provides a seamless transfer between benefits and ensures no interruption in benefit payments.  A single Departmental payment system for benefits and pensions went live from April 2011. A phased rollout throughout the year linked this with the Department’s individual benefit information technology systems, and rollout to the few remaining systems will be completed early in 2012-13.  A Departmental Enquiry Service was delivered, providing an information technology tool for dealing with customer contacts across the Department. In trailblazer sites, the identity of customers contacting the Department by telephone can now be verified using this system. The Department plans to roll it out nationally in Autumn 2012.  The Department trialled telephony solutions with other Government Departments to contribute to the cross-Government efficiency and performance agenda. Seven benefit processing sites were converted to telephony sites in 2011-12. In 2012-13 the Department plans to increase the number of Pension Credit customers whose needs are met through a ‘One Touch’ telephony service.  The Department rolled out ‘Tell Us Once’ nationally, a service that works across central and local Government to allow people to inform Government and local authorities just once of a birth or death. 80 per cent of Local Authorities are now operating a Tell Us Once service for all births and bereavements, 145,000 people have been helped by the service. In 2012-13 the Department plans to work in partnership with its local and central Government partners and customers to develop Tell Us Once as the delivery partner of choice for first class, customer- oriented services providing significant benefits for citizens, taxpayers, partners and consumers.  The Department continued to introduce effective online services. From September 2012 a new, modern, online vacancy taking, filling and automated job matching service, ‘Transforming Labour Market Services’, will be available to all UK jobseekers and recruiters, twenty four hours a day, seven days a week, to browse one of the largest online jobsites in Europe. 15

  • Page 19

    Department for Work and Pensions Annual Report and Accounts 2011-12 Performance outcomes, impacts and efficiencies Moving people off benefits quickly and into work In 2011-12 the Department focused on supporting more people into work more quickly and on driving through a major cultural change to give frontline staff more freedom and flexibility to tailor delivery of services according to local labour market conditions. Numbers claiming Jobseeker’s Allowance have increased in recession and, based on past recessions, the Office for Budget Responsibility expect these numbers to continue to rise for some time after the recession has ended. In 2011-12 90,000 adviser interviews were delivered by the Department each day to help people prepare for work. Despite challenging Labour Market conditions, the rate at which people moved off Jobseeker’s Allowance and inactive benefits continued to reach expected levels. More than half of people claiming Jobseeker’s Allowance left benefit within three months, and almost three quarters within six months, in 2011-12. A survey of customers leaving benefit in February and March 2011 estimated that more than two thirds of those who left Jobseeker’s Allowance, and more than one third of those who left Employment and Support Allowance moved directly into employment. During 2011-12 the Department supported increased numbers of jobseekers, employing an additional 6,387 Jobcentre Plus staff on a fixed term appointment basis. From April 2011 Jobcentre Plus staff have been given greater freedom to support customers early in their benefit claim, in a way that addresses the needs of the individual and local labour market more effectively. By promoting high levels of employment and helping people who are out of work to move into work and stay there, the Department aims to control welfare spending and ensure the most vulnerable in society are protected. Moving long-term unemployed back into work The Work Programme, launched by the Department on 1 June 2011 provides personalised work- focused support for people who are long-term unemployed or who are at risk of becoming so. It is the most ambitious programme of back to work support this country has ever seen. It is built around the needs of individuals, providing the support they need when they need it, and is delivered by the best of the private, public and voluntary sector. With the introduction of the Work Programme, for the first time in 2011-12 the Department is paying its providers using the benefit savings that they help to generate, building value for money into this programme in a way that has not been possible in the past. Providers have been given the freedom to innovate and do what works, rather than follow a top-down Whitehall-knows-best approach. Claimants are referred to the Work Programme by Jobcentre Plus. The total number of referrals to the Work Programme from 1 June 2011 to the end of January 2012 was 565,000. Following the referral of a participant to a Work Programme provider, that provider is responsible for contacting the participant to discuss the programme and begin planning the steps needed to support them into sustained employment. Once this activity has taken place, the provider 16

  • Page 20

    Department for Work and Pensions Annual Report and Accounts 2011-12 registers an ‘attachment’ to the Work Programme. The total number of attachments to the Work Programme from 1 June 2011 to the end of January 2012 was 519,000. Job outcome and sustained employment statistics for the Work Programme will be released from Autumn 2012. By the end of 2012-13 it is expected the Work Programme will be supporting 1.4 million people. The Department will also continue to support lone parents by providing access to flexible working opportunities and signposting to affordable childcare and by boosting the confidence and skills of parents, in particular lone parents, after a period out of the labour market. Increasing the employment rate of lone parents is expected to help to reduce the number of children in workless families. Moving young people closer to work Youth unemployment has risen sharply in Great Britain over the past year, reaching its highest level since 1986. The new Youth Contract was launched successfully by the Department in April 2012 to provide a range of additional help for unemployed young people, aged 16 to 24. The Youth Contract aims:  to ensure that every young person who needs it is offered support to move them closer to, or into sustained work;  to give young people the skills to compete in a global economy; and  to encourage employers to offer opportunities to young unemployed people by offering Voluntary Work Experience placements, apprenticeships or real, long-term jobs. The Department is offering 160,000 wage incentives for employers who recruit an 18 to 24 year old from the Work Programme. A number of large employers have already signed up to this. The Department is also offering an extra 250,000 Voluntary Work Experience or sector-based work academy places, ensuring that there is an offer of a place for every 18 to 24 year old who wants one, before they enter the Work Programme. Extra adviser support is being provided through Jobcentre Plus for all 18 to 24 year olds including, in England, a referral to a careers interview delivered by the National Careers Service within the first three months. Moving disabled people closer to work The Department wants to ensure that all disabled people have the opportunities and support that they need to find work and progress through fulfilling careers. The Work Programme provides a personalised and flexible back-to-work support for unemployed people, including disabled people. For those disabled customers with more complex needs, Work Choice provides tailored support to help them find and remain in work and, where it may be appropriate, help them progress into unsupported employment. Access to Work provides additional support for individuals whose health or disability affects the way they perform their job. It provides both individuals and their employers with advice and support with extra costs which may arise because of their individual needs. This can include awareness training for colleagues, support workers and counselling. Between 1 April and 31 December 2011, 27,420 disabled people were supported by Access to Work. Residential Training provides vocational training to unemployed disabled adults whose needs cannot be met 17

  • Page 21

    Department for Work and Pensions Annual Report and Accounts 2011-12 through any other Government-funded programmes and is delivered through nine Residential Training Colleges. In December 2010, the Government asked Liz Sayce, the Chief Executive of RADAR, the UK's largest disability campaigning organisation, to undertake an independent review of its specialist disability employment programmes. The findings of that review were published on 9 June 2011 in ‘Getting in, staying in, getting on’. In July 2011, the Government published its response to the review and announced a consultation on its recommendations. On 7 March 2012, the Government published ‘Disability Employment Support: Fulfilling Potential’, which sets out the strategy for specialist disability employment programmes, including an acceptance of all the Sayce recommendations for focusing Government support for employment services for disabled people on individuals and not institutions, and a commitment to work with disabled people on the further detail of this. Reducing fraud and error In February 2012, in a joint document produced with HM Revenue & Customs and Cabinet Office, the Department refreshed the Fraud and Error Strategy, originally launched in October 2010. The refresh reflects the wider changes in the Government's welfare agenda. The strategy sets out the Government’s plans for reducing fraud and error overpayments in the welfare system by one quarter (£1.4 billion) by March 2015. The plans focus on using improved intelligence and working in partnership across all sectors and Government bodies to prevent and detect fraud. This will enable checks to be carried out before payments are made to prevent losses from fraud and error. The Department will create an Integrated Risk and Intelligence Service (IRIS) for collecting and analysing claimant information and applying fraud and error prevention filters. IRIS will stop many incorrect payments and it will also support investigation and prosecution of fraud. The Department will also be working with Credit Reference Agencies to inform IRIS and to detect existing fraud and error in the current system. Over the Spending Review period, the Government will be spending up to £425 million on implementing its Fraud and Error strategy, and will work towards reducing overpayments as a result of fraud and error to no more than 1.7 per cent of benefit expenditure by March 2015. Cumulative savings of approximately £2.4 billion in Annually Managed Expenditure will be delivered over this period. The latest National Statistics (Preliminary 2011-12 Estimates) show that from total benefit expenditure of around £159 billion, £3.2 billion (2.0 per cent) was overpaid due to fraud and error, and an estimated £1.3 billion (0.8 per cent) was underpaid due to fraud and error. The Fraud and Error programme achieved estimated savings of more than £276 million in total in 2011-12, including over £200 million from a Spend to Save investment of under £40 million. Since April 2011 the Department has invested heavily in compliance activities. Dedicated centres have been set up to spot and tackle cases where it is believed that people have not reported a change in their circumstances. A return on investment was achieved of approximately £9 saved for every £1 spent through the Case Cleanse programme across the major benefits. Working in partnership with local authorities, in October 2011 the Department launched a new data system that provides up to date information on tax credits to Local Government helping to detect Housing Benefit overpayments. 18

  • Page 22

    Department for Work and Pensions Annual Report and Accounts 2011-12 During 2011-12 the Department undertook a number of joint criminal investigations with HM Revenue & Customs with a view to prosecuting claimants who have committed both tax credit and benefit fraud. By the end of March 2012, 52 convictions had been secured, resulting in the identification of over £1.1 million in recoverable overpayments. Actions to introduce a more robust regime of sanctions and penalties mentioned in last year’s Annual Report and Accounts, can start now that the Welfare Reform Act has gained Royal Assent. Tougher deterrents include administrative penalties and loss of benefit for attempted fraud; and extended loss of benefit in case of conviction for fraud – 13 weeks for a first offence, 26 weeks for a second offence and 3 years for a third offence. There is also an immediate 3 year loss of benefit for serious or organised benefit fraud or identity fraud. Where claimant error leads to an overpayment as a result of negligence or failure to declare relevant information or change of circumstance, the Department will be introducing a new £50 civil penalty. Effective customer service During 2011-12 the Department’s delivery operation has continued to administer benefits and pensions efficiently and effectively. For example, the Department:  on average, conducted 90,000 adviser interviews per day to help people prepare for work;  achieved a rate of 73 per cent of people leaving Jobseeker’s Allowance by 26 weeks;  processed over 2,700 applications for State Pension and over 1,100 claims to Pension Credit every working day;  processed 88 per cent of Jobseeker’s Allowance claims, and 84 per cent of Employment Support Allowance claims within 16 days;  answered 95 per cent of Pensions and Carer’s Allowance calls;  made £595 million Social Fund recoveries; and  recovered £364 million of debt. The Department paid 99 per cent of benefit and pension payments direct into an account, including the Post Office card account, in 2011-12. Being paid into an account is a safe, reliable, efficient and secure way of receiving payments which gives claimants more choice about where they collect their cash. For the small number of customers who are unable to make use of mainstream bank accounts or the Post Office card account, the Department will be piloting a new ‘Simple Payments’ service as an alternative to cheque payments. Providing better value for money The Department continues to increase its efficiency at the same time as improving its service to the public. In 2011-12 the Department reduced administrative spending and made progress towards putting welfare spending on a sustainable footing by:  reducing staffing levels in the Department and its arm’s length bodies by nearly 11,0001 full time equivalent members of staff, including by reducing corporate function headcount by 32 per cent. This will save the Department nearly £3252 million each year;  reducing the Department’s total Estate by approximately 61,000 square metres, saving the Department around £24 million each year; 1 Based on full time equivalent figures as at 31 March 2012 compared with 31 March 2011 2 Based on 31 March 2012 average salary costs 19

  • Page 23

    Department for Work and Pensions Annual Report and Accounts 2011-12  reducing the Department’s total procurement spend by around £900 million through prudent procurement practices;  reducing the Department’s spend on consultancy from £13.8 million in 2010-11 to £8.81 million, a reduction of 36 per cent; and  reducing the Department’s discretionary spend across all categories between 2010-11 and 2011-12, including on staff subsistence by 16 per cent and on conferences by 85 per cent. The drivers of savings in the Department’s operating costs include:  the Department’s operational productivity and unit cost benchmarks. These are used to help frontline staff understand how they contribute to providing value for money and how they can help improve it. Most of the 2011-12 benchmarks were achieved, and variation in office performance was reduced through the sharing of best practice;  introducing signposting leaflets to encourage claimants to find out more online, and restructuring the printed range to reduce costs. The first new leaflets cost, on average, 30 per cent less than the materials they replaced, with no loss of effectiveness;  progress on sustainability. The Department reduced its Greenhouse Gas Emissions by 16 per cent in 2011-12; and  continuing to make progress in modernising service delivery, towards making digital the default channel. It has increased the range of services, such as benefit advice, available online via DirectGov. Beyond 2011-12 The Department is confident in its ability to meet the many challenges it faces in delivering the Government’s radical welfare reform programme and in tackling poverty by working towards the principles of Social Justice in its policy development and delivery of services. The Department’s Delivery Plan2 for 2012-13 was published on 11 June 2012 and can be accessed via the Department’s website. In 2012-13 the Department will continue to focus on achieving its objectives to deliver and improve its labour market, benefit and pension administration and other services, deliver major reform and increase value for money for the taxpayer. By working in partnership across Government and with the private, voluntary and community sectors to deliver quality services that meet customers’ needs the Department plans to simultaneously:  maintain an excellent service to the public;  deliver efficiencies;  achieve its strategic priorities;  be ready to implement the planned once in a generation reforms next year;  start to plan the delivery of the next phase of reforms;  develop and engage its people; and  achieve more and better for less. 1 Figures based on provisional returns and may be subject to change 2 http://www.dwp.gov.uk/docs/dwp-delivery-plan-2012-2013.pdf 20

  • Page 24

    Department for Work and Pensions Annual Report and Accounts 2011-12 Transparency report The Government aims to be open and transparent about how public services are run and how much it costs to run them. It believes members of the public should be able to find out how Departments are organised and what they spend. Information for 2011-12 can be found on the Department’s website and on the data.gov.uk website. The data available includes the following information:  a monthly Structural Reform report which describes progress in delivering the actions set out in the Department’s Business Plan;  a Quarterly Data Summary which provides a quarterly snapshot on how the Department is spending its budget, the results it has achieved and how it is deploying its workforce;  Ministers’ meetings, hospitality, gifts and travel;  senior officials’ business expenses, hospitality and meetings with external organisations;  spend over £25,000;  exceptions to the cross-Government moratorium on spend;  awarded contracts; and  Senior Civil Service performance payment. Quarterly Data Summary (QDS) Tables An annual version of the QDS is being published below for the first time as part of the Department’s Annual Report and Accounts. For any interpretation or analysis of the information, users should pay careful attention to the Measurement Annex published on the Department’s Transparency website. This outlines the caveats and nuances surrounding the data. Spending The QDS spending table includes data on ‘common areas of spend’. Many of the measures are not yet directly comparable between Departments because they do not have common definitions, time periods, or data collection processes. 21

  • Page 25

    Department for Work and Pensions Annual Report and Accounts 2011-12 QDS Spending Table SPENDING Budget £million Common Areas of Spend 2011-12 2010-11 Total office estate 2011-12 2010-11 757,781 897,751 (m2) Total Departmental See Core Tables Total cost of office Estate 245 335 Expenditure Limit (DEL) (Annex 1)2 1 estate (£million) Costs of which Resource DEL Cost per FTE (£) 3,656 3,516 (excl. Depreciation) 2 Cost per m (£) 323 315 Total Procurement 3,407 4,308 Spend (£million) Price of standard box of A4 white copier Up to top 5 contributory Procurement 9.42 9.25 paper (£/2500 elements sheets) Average price of 0.073 0.058 energy (£/KWH) Total 3rd Party ICT 947 889 Cost (£million) Purchase of goods and IT Cost of desktop services within Resource 432.00 550.00 provision per FTE (£) DEL Payroll within Resource Human Resources 68.30 * DEL (£million) Grants within Resource * Finance (£million) 81.69 DEL Corporate Service Procurement * of which Capital DEL Cost3 25.16 (£million) Legal (£million) 32.92 * Communications * 22.33 (£million) Up to top 5 contributory Total Estimated elements 1,100 1,200 Fraud (£million) Total Estimated 2,100 2,100 Fraud, Error, Errors (£million) Debt Total Debt (£million) 3,545 3,374 Total Annually Managed Not Not Debtor Days Expenditure (AME) applicable applicable Direct Up to top 5 contributory Voluntary Procurement spend 378 622 elements and with SME (£million) Indirect community 267 sector Direct (VCS)/Small 121 and medium Procurement spend Indirect 346 enterprises with VCS (£million) Not (SME) available Grants to VCS 64.9 Not 1 The QDS estate information is based on the results of the cross government Annual Property Benchmarking exercise, which measures Departmental estate that is classed as office space (excluding building such as Jobcentres, medical centres and storage etc), and that is over 500m2. 2 The Core Tables can be found on page 210 of this report 3 Includes the main Department, Child Maintenance and Enforcement Commission and the Health and Safety Executive. 22

  • Page 26

    Department for Work and Pensions Annual Report and Accounts 2011-12 (£million) available Major Projects (Top 5) Cost Whole Life Costs Universal Credit (£ million) 13,845 Financial Indicators 2011-12 2010-11 Work Programme (£ million) 5,627 Accuracy of Cash 1.27 1.79 Personal Independence payment (£ million) 2,598 Forecasting (+/- %) Working Capital Forecast Not applicable. See Core Enabling Retirement Savings Programme (% variance of Actual v Table 3 for breakdown of 1,049 Working Capital (£ million) Forecast) Net Book Value (% variance of Actual v Not applicable Incapacity Benefit Reassessment (£ million) 892 Forecast) Whole life cost of ALL major projects(£million) 26,992 *The Cabinet Office definition of corporate service costs changed during 2011-12 and as a result 2010-11 and 2011-12 figures are not comparable. Investment in Major Projects The QDS spending table includes data on the Department’s ‘Top 5’ Projects. The Department invests in a number of major projects and programmes, which collectively help to deliver improved services and to reduce Departmental costs. The cost of the Department’s ‘top 5’ major projects were identified in the Department’s Business Plan 2011-15. The ’whole life cost’ of each project is included in the QDS template below. The estimated cost over the lifetime of each project, as forecast in March 2012 and reported in the Department’s Business Plan 2012-15, is shown. The Universal Credit and Personal Independence Payment programmes are introducing radically simpler systems of financial support for working age and disabled people. The objectives of these reforms were described in the earlier Performance Report. In 2011-12:  the design and contractual work for Universal Credit progressed well and in January 2012 the implementation strategy was agreed; and  the Personal Independence Payment project plan received HM Treasury approval in February 2012 to proceed with further work on the design and on invitations to tender for commercial contracts. The Work Programme was rolled out successfully and the majority of contracts with providers started as planned from June 2011. The Enabling Retirement Savings Programme will commence implementation of the Government’s workplace pension reforms from October 2012, mainly through two arm’s length bodies. The Pensions Regulator has responsibility for delivery of a compliance regime to support the introduction of an employer duty on all employers to automatically enrol their employees into a qualifying pension scheme; and the National Employment Savings Trust Corporation is responsible for setting up and running a new low cost pension scheme that any employer can use to meet this duty. The Incapacity Benefit Reassessment project formally closed in March 2012 following the successful implementation of the Information Technology and process changes required to support the work capability reassessment of claimants of old style incapacity benefits. All incapacity benefit claimants will be reassessed by April 2014. 23

  • Page 27

    Department for Work and Pensions Annual Report and Accounts 2011-12 Results The set of input, impact and ‘other key data’ indicators published in the Department’s Business Plan are used to report ‘results’ in the QDS. This information is designed to provide transparency about the Department’s delivery effectiveness and to allow the public to make an assessment about the Department's value for money. QDS Results Table RESULTS Provisional Final Input Indicators figures for 2011-12 figures for 2010-11 Unit cost of Jobcentre Plus labour market support per 23 31 customer, (£) Processing cost per new claim for Jobseeker’s 72 91 Allowance, (£) Cost of maintaining each existing claim for 326 304 Jobseeker’s Allowance, (£) Cost of processing each new claim for Employment 229 232 and Support Allowance, (£) Cost of processing each new claim for Income 166 179 Support, (£) Cost of maintaining each existing claim for Income 115 116 Support, (£) Cost of maintaining each existing claim for Basic 13 13 State Pension, (£) Cost of maintaining each existing claim for Pension 48 52 Credit, (£) Cost of processing each new claim for Disability 171 246 Living Allowance, (£) Overall Department for Work and Pensions productivity measure, (% increased compared with 12 10 previous year) Impact Indicators1 Data published in 2011-12 Data published in 2010-11 JSA 87.2 (Jan-Mar 11) Rate of people moving from key out of work benefits2 88.6 (Oct-Dec 10) not available 89.8 (Jul-Sept 10) 90.5 (Apr-Jun 10) 4.8 (Nov 11) 4.8 (Nov 10) Number of people on key out of work benefits, 4.9 (Aug 11) 4.9 (Aug 10) (million) 4.8 (May 11) 4.9 (May 10) 4.9 (Feb 11) 5.1 (Feb 10) Proportion of children living in workless households, 15.9 (Oct-Dec 11) 16.0 (Oct-Dec 10) (%) 15.8 (Apr-Jun 11) 16.1 (Apr-Jun 10) 31.8 (Jan-Mar 12) 30.3 (Jan-Mar 11) Proportion of young people not in full time education 32.0 (Oct-Dec 11) 32.0 (Oct-Dec 10) who are not in employment, (%) 32.0 (Jul-Sept 11) 30.3 (Jul-Sept 10) 30.5 (Apr-Jun 11) 29.8 (Apr-Jun 10-) 1 Technical notes for Impact Indicators are provided at Annex 2 2 The title and scope of this indicator has been amended from the ‘rate of people moving from key out of work benefits into employment’ in the 2011-12 Business Plan. The data are the percentage moving from Jobseeker’s Allowance by 52 weeks. The percentage of people moving from Employment and Support Allowance by 65 weeks are also published. Further detail can be found at Annex 2 [page 226]. 24

  • Page 28

    Department for Work and Pensions Annual Report and Accounts 2011-12 Proportion of the lowest earners that experience 11.7 (2002-11) 12.5 (2001-2010) wage progression, (%) Rate of disability poverty1 (%) 20 (2010-11) 20 (2009-10) 24.0 (Jan-Mar 12) 23.3 (Jan-Mar 11) Gap between the employment rates for disabled 24.4 (Oct-Dec 11) 23.9 (Oct-Dec 10) people and the overall population, (%) 24.4 (Jul-Sept 11) 25.0 (Jul-Sept 10) 24.4 (Apr-Jun 11) 24.7 (Apr-Jun 10) Fraud and Error in the benefit system, as a 1) 2.0% 1) 2.1% percentage of expenditure (%) 2) 0.8% 2) 0.8% 1) Overpayments and 2) Underpayments) (11-12 preliminary) (10-11 preliminary) 2 Rate of pensioner poverty (%) 14 (2010-11) 15 (2009-10) Number of employees in a pension scheme 11.0 (2011) 11.3 (2010) sponsored by their employer, (million) 64.6/62.4 64.5/62.8 (Jan-Mar 12) (Jan-Mar 11) 64.6/62.4 64.5/62.7 Average age people stop working, (years) (Oct-Dec 11) (Oct-Dec 10) (Men/Women) 64.4/62.5 64.6/62.7 (Jul-Sept 11) (Jul-Sept 10) 64.5/62.7 64.7/62.5 (Apr-Jun 11) (Apr-Jun 10) Public opinion of Department for Work and Pensions 89% (2011) not available service levels, (%) 3 Other Key Data Data published in 2011-12 Data published in 2010-11 Proportion of customers for whom providers have achieved a Job Outcome payment at 12 months on not available not available the programme Number of Incapacity Benefit recipients reassessed 133,500/81,800 and those moving from Incapacity Benefit to not available (to end Jul 11) Employment and Support Allowance nationally Number of disabled people taking up Right to 27,000 (to end Mar 12) Control, by location (People notified of the Right to 20,300 (to end Sept 11) not available Control) 11,800 (to end June 11) 19.6 (Mar 12) 10.4/(Mar 11) Proportion of new Jobseeker’s Allowance 14.6 (Dec 11) not available applications submitted online4 (%) (JSA) 15.1 (Aug 11) not available 18.9 (Oct-Dec 11) 18.8 (Oct-Dec 10) The proportion of households that are workless (%) 18.8 (Apr-Jun 11) 19.2 (Apr-Jun 10) Structural Reform Plan Actions 2011-12 Total number of actions completed during the year 55 Total number of actions overdue at the end of the year 2 Number of overdue actions that are attributable to external factors 2 Total number of actions ongoing 245 1 Data are for a financial year and published around a year after the financial year end ends. Note the 2009/10 dataset has been revised, more information can be found at: http://research.dwp.gov.uk/asd/hbai/hbai_revision_due_to_ni_tax_changes.pdf 2 Data are for a financial year and published around a year after the financial year-end ends. Note the 2009-10 dataset has been revised, more information can be found at: http://research.dwp.gov.uk/asd/hbai/hbai_revision_due_to_ni_tax_changes.pdf 3 Technical notes for the Other Key Data indicators are provided at Annex 2 4 The proportion of State Pension applications completed on line is no longer a Business Plan indicator. The Department is however, still continuing to report data. Further details can be found at http://www.dwp.gov.uk/docs/state-pension-claims- online.pdf 5 The Business Plan is refreshed annually. There are 77 actions in the 2012-15 Business Plan. 25

  • Page 29

    Department for Work and Pensions Annual Report and Accounts 2011-12 The impact indicators in the QDS results table above help the Department demonstrate the effectiveness of its policies and reforms in achieving positive social outcomes. The table compares the most recently published data for these indicators but the Government, the public and the Department’s other stakeholders will only be able to more fully assess whether intended policy outcomes have been achieved over a long time period and in context of the broader economic and social environment. The data published in 2010-11 and/or 2011-12 were statistically significant for three impact and other key data indicators:  The proportion of Jobseeker’s Allowance applications submitted online increased from 10.4 per cent in March 2011 to 19.6 per cent in March 2012. As well as improving the online service itself, making internet access available for claimants in the majority of Jobcentres, and using contact with claimants to promote online claims, the Department is running tests in particular areas to learn whether offering more support and making the online service more attractive than telephony will drive significant increases in take-up.  The rate of (relative) pensioner poverty improved between 2009-10 and 2010-11 with a one percentage point change from 15 per cent to 14 per cent. This has largely been due to a decline in median income in real terms (and thus the poverty threshold). The Government has restored the earnings link for the basic State Pension and given a ‘triple guarantee’ that the basic State Pension will increase by the highest of the growth in average earnings, price increases or 2.5 per cent. Further, it was announced in the Budget 2012 that the Government will reform the State Pensions system to introduce a single tier pension for future pensioners.  The number of employees in a pension scheme sponsored by their employer decreased from 11.3 million to 11.0 million between 2010 and 2011, continuing the recent downward trend. The introduction of Automatic Enrolment, which begins with the largest employers in October 2012, is expected to have a significant positive effect on this indicator. The effect of recent policies will be better seen in the long-term trends of the remaining indicators. Technical notes for Impact and other key data indicators are provided at Annex 2 [page 226]. 26

  • Page 30

    Department for Work and Pensions Annual Report and Accounts 2011-12 People The QDS people table reports key information on the Department’s workforce size and shape, on turnover, diversity and attendance, and on employee engagement. Whole Department Family - Workforce Size PEOPLE 31 Mar 2012 31 Mar 2011 Department and Agencies See Core Table 5 Payroll Staff Non-Departmental Public Bodies (Annex 1)1 Department Group Average Staff Costs £29,530 £28,365 Department and Agencies See Core Table 5 Contingent Labour Non-Departmental Public Bodies (Annex 1)¹ Department Group Year ended 31 Year ended 31 Department and Agencies Only March 12 March 11 Administrative Assistants and Administrative 47.4 48.8 Officers Executive Officers 39.5 38.2 Workforce Shape Higher and Senior Executive Officers 10.6 10.5 Full Time Equivalent (%)2 Grade 7/6 2.1 2.3 Senior Civil Servants 0.2 0.3 Part Time 38.7 35.8 Recruitment Exceptions (FTE) 4,855 449 Workforce Dynamics Annual Turnover Rate (%) 5.22 5.93 Black and Minority Ethnic 11.4 11.3 Workforce Diversity Women 68.3 67.2 (%) Disabled 6.5 6.5 Black and Minority Ethnic 3.7 4.7 Workforce Diversity (Senior Women 40.2 38.9 Civil Servants only) (%) Women (Top Management Posts) 33.3 30.6 Disabled 3.6 4.5 Attendance Actual (Main Department only) 7.3 8.1 Average Working Days Lost (AWDL) Standardised 6.9 3 7.8 Department only; People Survey Metrics 2011 survey 2010 survey Employee Engagement Index (%) 44 46 Leadership and Managing Change 22 24 My Work 57 59 Theme scores (%) My Line Manager 60 63 Organisational Objectives & Purpose 72 74 Although not part of the QDS, the information on consultancy and temporary staff spend is published here to provide a more complete picture of the Department’s workforce. Further 1 The Core Tables can be fund in Annex 1 (page 210) 2 Percentages may not sum due to rounding 3 The December 2011 figure has been provided as the updated figure for the end of March 2012 position was not available in time for publication. 27

  • Page 31

    Department for Work and Pensions Annual Report and Accounts 2011-12 information on the Department’s diversity and equality, and employee engagement strategies is also provided below Monitoring spending on consultancy and temporary staff The Department’s management consultancy and interim personnel spend has continued to reduce significantly between 2010-11 and 2011-12 due to robust demand management measures and supported by Cabinet Office spending controls. Consultancy (£millions) 2011-12 2010-11 Reduction Main Department 6.5 10.5 38% Arm’s length bodies 2.3 3.3 30% Total 8.8 13.8 36% Temporary Staff (£millions) 2011-12 2010-11 Reduction Main Department 13.2 34.7 62% Arm’s length bodies 7.2 13.5 47% Total 20.4 48.2 58% Monitoring Senior Civil Service Pay The table below shows the numbers of Senior Civil Servants by pay band. Details of pay and reward for the Department’s Ministers and Executive Team are provided in the Remuneration report, which can be found on page 42 of this report. Senior Civil Service staff by pay band Full-time equivalents 31 March 2011 31 March 2012 Permanent Secretary* £141,800 - £277,300 2* 1 SCS 3 £101,500 - £208,1001 8 6 SCS 2 £82,900 - £162,500 54 47 SCS 1 £58,200 - £117, 800 190 162 Total 254 216 *Darra Singh, then Chief Executive of Jobcentre Plus, had Permanent Secretary status as at 31 March 2011. Darra Singh left the Department on 30 September 2011. Diversity and Equality As an employer, the Department is committed to equality, to valuing diversity within its workforce and to ensuring that these commitments are embedded in the day to day working practices with customers, claimants, partners and other stakeholders. Between March 2011 and March 2012, the Department: 1 Joe Harley’s remuneration falls outside of the standard SCS pay-band. Details can be found in the Remuneration Report. 28

  • Page 32

    Department for Work and Pensions Annual Report and Accounts 2011-12  increased the proportion of its workforce who are from ethnic minority backgrounds;  increased the proportion of its workforce that are women, and maintained the proportion of top management posts filled by women; and  maintained the proportion of its workforce that are disabled at 6.5 per cent. Disabled people, as defined in the Disability Discrimination Act 1995 (and as amended by the Disability Discrimination Act 2005), are employed across all grades within the Department. The Department aims to improve the level of knowledge and understanding of disability throughout its business in order to improve services for disabled staff and customers. The abilities of disabled people are recognised and valued throughout the Department by focusing on what people can do rather than what they cannot and by making reasonable adjustments to the workplace to allow people with disabilities to achieve their full potential. As a public service provider, the Department is committed to providing services which embrace diversity and which promote equality of opportunity. The Department has standards and guidance in place to make it clear that its aim is to provide an excellent service to the public. These standards and practices will remain and the Department will continue to:  treat members of the public fairly and with respect;  put in place reasonable adjustments for people with disabilities; and  provide an accessible service for people who want to use its services. The Department has Civil Service responsibility for the cross-Government Disability and Equality strategy. In 2011-12 this involved refreshing the Civil Service Diversity Strategy, implementing the recommendations of the Civil Service Disability Task Group and delivering two Whitehall Internship programmes. These consisted of a two week college level scheme for students from under-represented socio-economic backgrounds, and a one day school leaver scheme aimed at broadening horizons and tackling the poverty of aspiration that holds back many from under- represented backgrounds. Attendance The Department has continued to build on the progress of recent years, reducing staff sickness absence to the lowest level ever, recording an average of 7.3 days per staff year in 2011-12, compared to 8.1 days per staff year in 2010-11. The figure for the main Department only is recorded in the QDS template. The Department will continue to seek to improve its performance through an ongoing programme of activity, including helping its employees maintain good health, improving the capability of managers to manage health-related problems and taking appropriate action including, where necessary, retirement or dismissal when employees cannot maintain good attendance records. Employee Engagement In the context of welfare reform and organisational transformation, leadership and management of change continues to be the key challenge for the Department, as well as across Government. Data from the 2011 people survey shows that the Department lost ground in all the key drivers of engagement as the Department, and the corporate functions in particular, implemented its major reorganisation. As a result, over the next year the Executive Team is committed to developing and engaging staff and investing in staff satisfaction. The Department is: 29

  • Page 33

    Department for Work and Pensions Annual Report and Accounts 2011-12  helping leaders and managers develop the skills and behaviours needed to support and deliver organisational change and to motivate, engage and coach their teams;  implementing new performance management arrangements that recognise and reward achievement and help tackle poor performance effectively; and  developing the capabilities and skills required to achieve the Department’s strategic priorities and meet the future needs of the organisation. The Permanent Secretary and Executive Team play a key role in communicating changes and listening to concerns from staff within the Department. From July 2011 all staff have been given the opportunity to ask questions and convey their views directly to the Permanent Secretary and the Chief Operating Officer in hour long ‘Question Time’ sessions across the Department. Welfare services support staff and managers and promote well-being in the workplace. The Department’s ‘live well, work well’ programme enables managers and staff to focus on the drivers of good health and employee engagement for maximum effect and sustained improvement. Staff also have access to Trade Union membership. The Department recognises three Trade Unions which it negotiates with, consults and informs at national level. Regular and comprehensive dialogue takes place with the Trade Unions. Communications Publicity and advertising The Department’s external communications in 2011-12 focused on ensuring that the public, stakeholders and the media understood changes to its services and policies, and on encouraging desired behavioural changes. Activities included:  building understanding of Universal Credit amongst stakeholders and partners;  encouraging young people to be successful in the labour market, demonstrating the benefits of being self-employed, promoting understanding of Jobseeker’s Allowance and demonstrating the benefits for business of a diverse workforce;  working with Other Government Departments on social justice initiatives such as publication of the Gangs and Youth Violence report with the Home Office;  paving the way for automatic enrolment into a workplace pension from October 2012 and communicating to the public the removal of the Default Retirement Age and benefits of working longer;  encouraging poorer pensioners to claim their entitlements;  communicating the migration from Incapacity Benefit (IB) to Employment and Support Allowance (ESA); and  improving digital information available online and encouraging people to access it on Directgov, Businesslink.gov.uk and Departmental websites. The Department focused on low-cost and no-cost communications activity, making maximum use of its own channels. Paid-for communications were used only when absolutely necessary, for example, when communicating about forthcoming changes to workplace pensions. All activity 30

  • Page 34

    Department for Work and Pensions Annual Report and Accounts 2011-12 was evaluated and research used to target the right audience with the right message at the right time. Correspondence Between January and December 2011, the Department's Ministers received just over 43,000 letters. Of those, almost 25,000 were from MPs or Peers, and Ministers replied to 94 per cent of them within the Cabinet Office target of 20 working days. The other 18,000 letters were direct from members of the public, and replies were sent by officials on behalf of Ministers. Almost 95 per cent were sent within the target of 20 working days. Complaints The Department has well-developed processes for dealing with complaints, but continues to work towards improving awareness and accessibility. Details of how to complain and arrangements for redress are included on Directgov, the Department’s website and in leaflets which are available from the Department and local Citizens Advice Bureaux. The Department’s website explains how customer feedback is being used to improve service delivery. The Department encourages staff to record as much information as possible about customer dissatisfaction with the service they have received to help identify areas where improvements can be made. In 2011-12, the Department recorded 82,437 complaints. Most complaints were quickly resolved at a local level. A customer who remains dissatisfied after receiving a final response to their complaint can ask the Independent Case Examiner to investigate. In 2011-12 the Independent Case Examiner dealt with 522 complaints about the Department for Work and Pensions, and 851 about Child Maintenance and Enforcement Commission. The Independent Case Examiner upheld, fully or partially, 758 complaints (55.2 per cent). Since April 2011, the Department has taken a new approach to complaints about providers, including the Work Programme. Providers are required to work directly with individuals to resolve complaints about their service. This ensures issues can be resolved at the first point of contact, rather than having to go through other layers of bureaucracy. Equally, it means providers are responsible for resolving and learning from complaints about their service. If the individual is not happy with the final response from the provider, they can then take their complaint directly to the Independent Case Examiner. In 2011–12 the Independent Case Examiner took on 18 complaints about Work Programme providers. He will provide feedback to the Department in his 2011-12 Annual Report. The Department provides financial redress in the form of special payments to customers (or their representatives) who have incurred additional costs, losses or other effects of maladministration. In 2011-12 12,527 ex gratia compensation awards totalling £3.1 million1 were authorised under these arrangements. 1 The figure excludes financial redress paid in respect of loss of statutory entitlement (LOSE). The total cost of LOSE paid in 2011-12 was £1.3 million. This amount is excluded as it is not an additional cost arising from maladministration – it is money that would have been paid anyway if no maladministration had occurred. It also excludes special exercises which may be necessary to address the fact that current legislation does not provide for payments as intended by Ministers/Parliament. 31

  • Page 35

    Department for Work and Pensions Annual Report and Accounts 2011-12 If a member of the public is not happy with how the Department responds to their complaint, they can ask a Member of Parliament to raise the issue with the Parliamentary and Health Service Ombudsman. In 2010-11, the Ombudsman investigated and reported on 36 complaints about the Department. 72 per cent of these were fully or partly upheld. Complaints partly upheld Complaints accepted by Complaints fully upheld Complaints reported on Complaints not upheld recommendations not by the Ombudsman recommendations the Ombudsman complied with2 complied with Number of Number of 2010-11 Ombudsman Report1 Child Maintenance and Enforcement Commission3 8 14 71% 21% 7% 38 0 Independent Case 8 14 43% 0% 57% 5 0 Examiner Jobcentre Plus 2 5 60% 40% 0% 15 0 The Pension, Disability 0 2 50% 0% 50% 1 0 and Carers Service Department for Work and 0 1 100% 0% 0% N/A N/A Pensions-other TOTAL 18 36 58% 14% 28% 59 0 Personal Data Incidents Departments are required to disclose information concerning certain personal data related incidents. The tables below cover the whole Department including its arm’s length bodies. 1 The Ombudsman’s full report can be found at www.ombudsman.org.uk/about-us/publications/annual-reports 2 Some complaints result in more than one recommendation 3 Percentages do not add to 100 due to rounding. 32

  • Page 36

    Department for Work and Pensions Annual Report and Accounts 2011-12 Summary of protected personal data related incidents formally reported to the information commissioner’s office in 2011-12 Date of incident Nature of incident Nature of data Number of Notification (month) involved people steps potentially affected Sept 2011 Loss of paper documents from outside Name, 150 Individuals secured Government premises. address, notified by post. National Insurance numbers, bank account details. The Department will continue to monitor and assess its information risks, in the light of the events noted above, in order to identify and address any weaknesses and ensure continuous improvement of its systems. Summary of other protected personal data related incidents in 2011-12 Incidents deemed by the Data Controller not to fall within the criteria for report to the Information Commissioner’s Office but recorded centrally within the Department are set out in the table below. Small, localised incidents are not recorded centrally and are not cited in these figures. Category Nature of incident Total Loss of inadequately protected electronic equipment, devices or paper I 1 documents from secured Government premises Loss of inadequately protected electronic equipment, devices or paper II 1 documents from outside secured Government premises Insecure disposal of inadequately protected electronic equipment, III 0 devices or paper documents IV Unauthorised disclosure 2 V Other 0 Sustainable Development This section provides a brief overview of the Department’s progress against the Government’s two sustainable development priorities:  delivering Greening Government Commitments to reduce greenhouse gas emissions, waste, paper use and water consumption; and  mainstreaming sustainable development by making it central to the way the Department makes policy, runs its estate and purchases goods and services. 33

  • Page 37

    Department for Work and Pensions Annual Report and Accounts 2011-12 The following table compares 2011-12 performance with the Government’s Greening Government Commitments made against 2009-10 baselines. Positive progress has been made this year, but the Department needs to maintain and build on this performance through to 2015. The target to cut paper use by 10 per cent in 2011-12 was exceeded and water consumption was reduced by 12 per cent against a 2009-10 baseline. Summary of performance against Greening Government Commitments 2009-10 2011-12 % 2011-12 2015 Target baseline reduction performance against baseline Reduce greenhouse gas emissions by 25% from a 2009-10 baseline from the whole estate and business-related transport Estates emissions 180,716 142,040 21% 135,537 Travel and related 24,415 14,756 40% 18,311 emissions Total greenhouse gas 205,131 156,796 24% 153,848 emissions Reduce the amount of waste we generate by 25% from a 2009-10 baseline Total volume of waste 16,626 13,844 17% 12,470 generated (tonnes) Volume of waste 10,522 8,413 20% N/A recycled (tonnes) Cut paper use by 10% in 2011-12 from a 2009-10 baseline A4 (Reams) 2,017,470 1,318,755 35% N/A A3 (Reams) 7,340 3,900 47% N/A Reduce water consumption from a 2009-10 baseline Total water consumption 810,701 714,440 12% N/A (m3) Report on Water Use Performance against best practice benchmarks (usage per FTE) Buildings 2009-10 2011-12 baseline performance Best Practice 107 53 N/A N/A (<4m3/FTE) Good Practice (4- 500 493 N/A N/A 6m3/FTE) Poor Practice 155 212 N/A N/A (>6M3/FTE) Further detail, including costs, Greenhouse Gas Emissions, Waste and Use of Finite Resources is included at Annex 4. Supplementary information is available in the Sustainability & Climate Change section of the Department’s website1. 1 http://www.dwp.gov.uk/about-dwp/sustainable-development/ 34

  • Page 38

    Department for Work and Pensions Annual Report and Accounts 2011-12 The Department has focused its sustainable development activities in 2011-12 on mainstreaming sustainability building it into the way the Department makes policy and throughout its project management functions, where it had already featured within formal project reviews. The overall sustainability of several projects has been rated against a number of economic, social and environmental criteria; and the expected direct and indirect greenhouse gas impacts are calculated and expressed in cash equivalents to weigh up against the economic and social costs and benefits. This evaluation is revisited through the lifespan of the project whenever there are significant changes in scope. Possible mitigations of any negative impacts are identified at each stage, and acted on wherever appropriate. Several projects, including Universal Credit, Simple Money Transmission Services, the Department’s Transformation programme, Tell Us Once and E-signing have, as a result, registered projected greenhouse gas emission savings in their business cases and/or benefit realisation plans. Towards the end of the financial year, an additional sustainability check has been added. In recognition of the fact that projects often commence with pre-approved aims, the Department now also assesses policies for sustainability at the pre-feasibility stage, before they are launched as projects or programmes. Rural Proofing To support rural areas and ensure the Department’s policies are sufficiently flexible to deliver quality services that meet everyday needs of local people who live in those areas, the Department is moving from a one size fits all approach towards a flexible model for delivering labour market services. This will ensure that the needs and interests of rural people, communities and their businesses are properly considered in the development and implementation of local employment policies and programmes. Work Programme providers are also free to design support based on individual and local need, which will be especially beneficial for the rural unemployed. For older people, the Department is delivering pensions, benefits and associated advice through its visiting Service. The Department is making extensive use of partnership arrangements, including those specific to rural communities, to support a wide range of innovative, local initiatives, such as working with older volunteer intermediaries, to identify need and promote the use of services. The Department underwrites the concessionary transport scheme that benefits all pensioners and older people are also assisted by Winter Fuel Payments and Cold Weather Payments. The Department is working in partnership with the Age Action Alliance and the UK Advisory Forum on Ageing to tackle issues that older people face. Better Regulation The Department is committed to the Government’s strategy to reduce regulatory burdens on business and civil society:  removing or simplifying existing regulation that unnecessarily impede growth;  reducing the overall volume of new regulation by introducing regulation only as a last resort;  improving the quality of any remaining new regulation; and 35

  • Page 39

    Department for Work and Pensions Annual Report and Accounts 2011-12  moving to less onerous and less bureaucratic enforcement regimes where inspections are targeted and risk-based. Statement of New Regulation, One In, One Out The Government aims to quickly deliver credible and meaningful reductions in the overall regulatory burdens on business and civil society organisations. One-in, One-out is a rule whereby any new direct regulatory cost to business and civil society organisations is at least matched by cuts to the cost of existing regulations. The Government’s third Statement of New Regulation (SNR) records the One-in, One-out (OIOO) balance of new costs (INs) and savings (OUTs) to business as a result of introducing new regulatory measures or taking deregulatory action. The cumulative OIOO position for the regulation implemented by the Department during the period 1 January 2011 to 30 June 2012 is an estimated net reduction in burdens on business of about £3,375 million per year. Red Tape Challenge The Red Tape Challenge is about harnessing the experience and ideas of those who deal with regulation day-in, day-out to help to reduce and reform the Government’s stock of statutory instruments and regulations. The Department has overall responsibility for the Pensions, Sickness Absence and Health and Safety themes of the Red Tape Challenge. The Department also contributes to the Employment-Related Law theme led by the Department for Business Innovation and Skills. Comments received through the Red Tape Challenge website were considered through the Löfstedt review of health and safety regulation. The Government accepted the review's recommendations. As a result, the Department is taking forward plans to revoke or consolidate around 50 per cent of regulations as part of wider plans to revoke or improve around 84 per cent of health and safety regulation. Impact Assessment An impact assessment is a reporting tool which policy teams use to work out the impact on business, civil society and others of introducing a new policy or policy change. The Regulatory Policy Committee (RPC) 4th report issued opinions on twelve of the Department’s impact assessments in 2011 finding five fit for purpose on first reference. The report concludes that the number of impact assessments considered is too small to draw any conclusions, but that the complexity of some of the Department’s proposals mean the assessments could usefully include more detailed policy explanation. Small business moratorium, Sunsetting Regulations ‘Sunsetting’ regulations apply to measures that will expire or cease to have effect on a certain date in the future. Once the sunsetting expiry date has been reached, decisions to continue or amend a measure or to allow it to expire must be based on a OIOO assessment. The Department is complying with the Government’s policy to apply sunsetting regulations where there is a net cost (burden) to business. For example, this type of provision has been made in The Occupational and Personal Pension Schemes Regulations 2012 and The Automatic Enrolment Order 2012. EU Regulations The Department is working with the Better Regulation Executive to engage with the European Commission to minimise EU regulatory burdens, in particular where they may affect small 36

  • Page 40

    Department for Work and Pensions Annual Report and Accounts 2011-12 businesses. As part of the Red Tape Challenge for private pensions, the Department is reviewing whether there is any gold-plating of EU regulations to ensure that the terms of European Directives are met but do not extend beyond what is intended when turning them into UK law. Health and safety The Department continues to develop proportionate and sensible health and safety policies and procedures, to support business delivery and reflect internal transformation. To help further manage the risk of verbal and physical abuse against its employees, in 2011-12 the Department introduced a new integrated on-line database and staff protection list allowing real time reporting of incidents and more targeted application of control measures. The Department won the Gold Award for Occupational Health and Safety at the Royal Society for the Prevention of Accidents (RoSPA) Awards for the third year in a row in 2012. This award is presented to employers who show a commitment to protecting the health and wellbeing of their employees, customers and visitors. The Department was also awarded the Astor Trophy, presented to the organisation demonstrating the best management of occupational health, including wellness at work, attendance management and rehabilitation. Sponsorship Government Departments are required to publish details in their annual reports of any sponsorship received which exceeds £5,000. During 2011-12 the Department did not receive any sponsorship. 37

  • Page 41

    Department for Work and Pensions Annual Report and Accounts 2011-12 Governance This chapter describes how the Department has been governed, structured and managed over 2011-12 and also includes the Lead Non-Executive report. Departmental Governance structure The Department’s high level governance arrangements are described below and the effectiveness of these arrangements is evaluated in the Governance Statement on page 69. The Department’s decision-making arrangements comply with HM Treasury’s Code of Good Practice for Corporate Governance in Central Government Departments, except for the Remuneration and Governance Committee, which has been established but has yet to meet. Departmental Board In April 2011 the Department established its enhanced Departmental Board. The Departmental Board operates in accordance with the Cabinet Office Board Protocol. The Board provides collective strategic and operational leadership of the Department. The Board is chaired by the Secretary of State and its membership now comprises four ministers, five non-executive members and three executive members. The Board includes a Lead Non-Executive who supports the Secretary of State in his role of Chair of the Board and liaises with the Government-wide Lead Non-Executive Board Member. The Lead Non-Executive also chairs the Department’s Nominations and Governance Committee. Departmental Audit Committee The Departmental Audit Committee (DAC) is a permanent sub-committee of the Departmental Board and is chaired by a Non-Executive Departmental Board member. The membership of the Departmental Audit Committee is entirely Non-Executives in line with Treasury guidance in the Audit Committee Handbook. Non-Executive Directors The Secretary of State appoints Non–Executive Members to the Departmental Board and to the Departmental Audit Committee. Their role is primarily to:  provide an independent advisory, support and constructive challenge role to the Permanent Secretary and Executive Team;  support and monitor the performance and progress of management in delivering plans and achieving objectives and in the overall management of strategic risks;  seek assurance and evidence that financial information is available and reliable, and that financial controls are robust; and  seek assurance and evidence that there are sound and robust governance and risk management arrangements in place. 38

  • Page 42

    Department for Work and Pensions Annual Report and Accounts 2011-12 Executive Team The Permanent Secretary and the Department’s Directors General make up the Executive Team which supports the Permanent Secretary in leading the Department and implements policies that are set by Ministers and strategies set by the Departmental Board. Executive Team meetings are sequenced both to cover routine business and to focus on specific issues needed to achieve the Department’s strategic priorities. The Executive Team meets as the Portfolio Board to agree investment on new projects and review the portfolio of change within the Department. Directors General are accountable for the direction, leadership and management of their part of the business and for providing assurance and escalating risks or issues to the Executive Team where needed. The Executive Team is responsible for:  considering the strategic implications of major policy developments;  agreeing major corporate policies;  robustly challenging and taking corporate planning and investment decisions;  prioritising, approving and overseeing the Department’s Change Portfolio, supporting Senior Responsible Owners for change programmes and projects to deliver their objectives and projected benefits;  managing corporate performance and strategic risks; and  supporting the success of the Department as a whole, working together as one team. Arm’s Length Bodies The Department sponsors (through sponsor teams) a wide range of arm’s length bodies to help it achieve its objectives. A list of these bodies can be found in Annex 3 of this report. The majority of appointments come within the remit of the Commissioner for Public Appointments. These appointments are made in line with the Commissioner’s Code of Practice. Where legislation provides, the Secretary of State appoints the chair, members, commissioners or trustees to the Board of these bodies, as appropriate. For each of the arm’s length bodies the Secretary of State designates a lead official within the Department who has responsibility for the stewardship of that body. This involves an annual review of the overall strategies, priorities, performance targets and budgets of the arm’s length bodies on the basis of their Business and Corporate Plans. Each Executive arm’s length body has a framework document or management statement and financial memorandum drafted by the sponsor team in close consultation with the arm’s length body. These documents set out the framework within which the arm’s length body operates, including aims, objectives and targets; the respective roles and responsibilities of the Department and the arm’s length body; the planning, budgeting and control arrangements; and how the arm’s length body will be accountable for its performance. From Autumn 2012, a comprehensive annual Public Bodies directory will be provided by the Cabinet Office. This will be published online. 39

  • Page 43

    Department for Work and Pensions Annual Report and Accounts 2011-12 Lead Non-Executive’s Report The Department for Work and Pensions established its enhanced Departmental Board in April 2011. Chaired by the Secretary of State, it operates in accordance with the Cabinet Office Board Protocol, and its function is to provide advice, challenge and support to the Department. The Departmental Board comprises a good balance of Ministers, senior civil servants, and non- executives from outside Government. In April 2011, the Department’s incumbent Board non- executives, Adrian Fawcett and Helen Stevenson, were joined by three newly appointed Non- Executives. These were John Clare, Willy Roe1 and me. John and Willy had been the Chairs of the Boards of the Department’s two Executive Agencies: Jobcentre Plus and the Pension, Disability and Carers Service. They were invited to join the main Board to provide invaluable knowledge and continuity through a significant period of transformation for the Department, during which the Agencies would cease to have Executive Agency status. Adrian Fawcett and Helen Stevenson’s contracts expired on 30 June 2011, at which point Dame Clara Furse (former CEO of the London Stock Exchange) and David Lister (Group CIO, National Grid) were appointed to the Board on 1 July 2011. The Board has two sub-Committees: the Departmental Audit Committee and the Nominations and Governance Committee. These sub-Committees have non-executive Chairs (Dame Clara Furse and me respectively). The Board met formally on four occasions during the 2011-12 accounting year, and also had an off-site strategy discussion. Its focus has been predominantly on the Department’s structural change; its delivery plans (including risks and governance); and performance management (including financial management). The Board has also had a role in overseeing the Department’s Capability Review and signing off its action plan. Outside of the Board’s formal meetings, the individual non-executives have led work in partnership with Ministerial and Executive colleagues on the following issues:  strengthening the Department’s talent management and staff engagement arrangements (Ian Cheshire);  scrutinising and providing assurance of the Department’s IT systems, with particular reference to the delivery of the welfare reform programme (David Lister);  examining Departmental finances in terms of how well the Department understands and manages its financial position (Clara Furse);  reviewing the relationship between the Department and its arm’s length bodies (Willy Roe);  engaging with the Government’s reducing regulation agenda (John Clare). It is my view that the non-executives have, and continue to, add value in these areas. In the coming year, the non-executives will additionally look closely at the Department’s performance reporting and how we might usefully support the Secretary of State on the social justice agenda. The non-executives will also continue to build their knowledge of the organisation; develop a clearer view of challenges and sensitivities around execution; and build a higher performing Board from the solid foundation that has been created. 1 John Clare and Willy Roe joined the Department Board informally in April 2011, and formally from November 2011 40

  • Page 44

    Department for Work and Pensions Annual Report and Accounts 2011-12 Performance Evaluation The effectiveness review of the Board, which was completed in March 2012, concluded that - while the Board was still developing and evolving – it was performing well and moving very much in the right direction. It highlighted a few minor areas requiring further development, for example succession planning, and I will keep these under review over the coming year. Board attendance has been very good throughout the year, as evidenced in the Governance Statement later in this Report. During 2012-13 the Board will continue to engage with the challenges of delivering the Department’s ambitious agenda of reform and evaluate the impact of its transformation programme. The Board will continue to meet regularly (a minimum of four times a year) and to engage outside of its formal meetings to make progress. Ian Cheshire Lead non-executive 41

  • Page 45

    Department for Work and Pensions Annual Report and Accounts 2011-12 Remuneration report Remuneration policy The remuneration of senior civil servants is set by the Prime Minister following independent advice from the Review Body on Senior Salaries. The Review Body also advises the Prime Minister from time to time on the pay and pensions of Members of Parliament and their allowances, on Peers’ allowances, and on the pay, pensions and allowances of Ministers and others whose pay is determined by the Ministerial and Other Salaries Act 1975. In reaching its recommendations, the Review Body is to have regard to the following considerations:  the need to recruit, retain and motivate suitably able and qualified people to exercise their different responsibilities;  regional/local variations in labour markets and their effects on the recruitment and retention of staff;  Government policies for improving public services including the requirement on Departments to meet commitments set out in their Business Plans;  the funds available to Departments as set out in the Government’s Departmental Expenditure Limits; and  the Government’s inflation target. The Review Body1 takes account of the evidence it receives about wider economic considerations and the affordability of its recommendations. Service contracts Civil service appointments are made in accordance with the Civil Service Commissioners’2 Recruitment Principles. The Principles require appointment to be on merit on the basis of fair and open competition, but also include the circumstances when appointments may be made otherwise. Unless otherwise stated below, the officials covered by this report hold appointments which are open-ended. Early termination, other than for misconduct, would result in the individual receiving compensation as set out in the Civil Service Compensation Scheme. Details of the service contract for each member of the Department’s Executive Team are shown on page 46. 1 Further information about the review body can be found at www.ome.uk.com. 2 Further information about the work of the Civil Service Commissioners can be found at http://civilservicecommission.independent.gov.uk/ 42

  • Page 46

    Department for Work and Pensions Annual Report and Accounts 2011-12 Performance Assessment There are four stages involved in the assessment of performance: 1. Self assessment Senior Civil Service (SCS) members reflect on and collect a reasonable amount of examples or evidence helpful in assessing their contribution in relation to the measures and required outcomes they signed up to. 2. Performance Review Discussion with Line Manager The performance review discussion is an opportunity for the SCS member and their line manager to address performance. This discussion, once documented, is reviewed by a countersigning officer and returned to the SCS member before referral to a relative assessment peer group. To maximise consistency in standards, business heads or senior directors may confer with other similar businesses to provide a wider benchmark for staff. 3. Relative Assessment Peer Group In 2011-12 the performance of individual SCS staff was relatively assessed against peers within the same pay band to achieve the following performance profile: Performance Group Percentage of Staff Award Group 1 25 receive awards Group 2 40 do not receive an award Group 3 25-30 do not receive an award Group 4 5-10 do not receive an award 4. Pay Committees Senior pay committees provide input to the Departmental moderation process. The Pay Committees are comprised of: Pay Strategy Committee: Robert Devereux (Chair), Chris Last (HRDG), Ian Cheshire (non-Executive Director), Adrian Fawcett (non-Executive Director) (to 30 June 2011), Helen Stevenson (non-Executive Director) (to 30 June 2011) and Willy Roe (non-Executive Director) (from 1 June 2011). Pay Band 1 and Pay Band 2 Pay Committees: Robert Devereux (Chair) Darra Singh (to 30 September 2011), Adam Sharples (to 2 October 2011), Richard Heaton (to 31 January 2012), Joe Harley, Chris Last, Gill Aitken, Terry Moran, Hunada Nouss, Sue Owen, Vivien Hopkins (to 30 September 2011), Ian Cheshire (non- Executive Director), Adrian Fawcett (non-Executive Director) (to 30 June 2011), Helen Stevenson (non-Executive Director) (to 30 June 2011) and Willy Roe (non-Executive Director) (from 1 June 2011). 43

  • Page 47

    Department for Work and Pensions Annual Report and Accounts 2011-12 Pay Band 3 Pay Committee: Robert Devereux (Chair), Ian Cheshire (non-Executive Director), Adrian Fawcett (non-Executive Director) (to 30 June 2011), Helen Stevenson (non-Executive Director) (to 30 June 2011) and Willy Roe (non-Executive Director) (from 1 June 2011). After the end of year performance review, the Pay Committees will consider line managers’ pay recommendations, assess the relative contribution of those in the pay band and make final base pay and non-consolidated performance pay award decisions. There are two financial elements to the remuneration paid to SCS members: i) Base Pay; and ii) Non-consolidated performance pay award (including a corporate leadership element). Both elements are linked to performance but are considered and awarded separately. The following criteria must be used in the round to recommend individual performance groups and non-consolidated performance pay awards:  whether objectives in the corporate, business and capacity parts of the common framework have been met or not, and to what degree;  judgements about how the objectives were achieved and in particular whether the leadership behaviours and professional skills part of the common framework have been demonstrated or not, and to what degree; and  the degree of difficulty or ease of meeting the objectives in the light of actual events. There was no increase in SCS base pay in 2011-12 and therefore base pay criteria were not required to be considered. All awards must fall within the range determined by the Government based on the recommendations made by the Senior Salaries Review Body (SSRB) and within an overall cost envelope. Non-consolidated performance pay awards are intended to reward and provide incentives for in- year delivery of key results. The size of the available pot is set by the Government, based on the recommendations made by the SSRB, as a percentage of the Department’s SCS pay bill. Non- consolidated performance pay awards were awarded to 25 per cent of SCS staff. Policy on notice periods and termination payments Standard SCS notice period a. Because of the power of the Crown to dismiss at will, an SCS member is not entitled to a period of notice terminating their employment. However, unless employment is terminated by agreement, in practice they will normally be given the following periods of notice in writing terminating employment: 44

  • Page 48

    Department for Work and Pensions Annual Report and Accounts 2011-12 (i) if dismissed on grounds of inefficiency, or if dismissal is the result of disciplinary proceedings in circumstances where summary dismissal is not justified: - Continuous service up to 4 years, a notice period of 5 weeks; - Continuous service of 4 years and over, a notice period of 1 week plus 1 week for every year of continuous service, up to a maximum of 13 weeks. (ii) if retired on medical grounds, a period of notice as above or, if longer, 9 weeks, unless a shorter period is agreed. (iii) if employment is terminated compulsorily on any other grounds, unless such grounds justify summary dismissal at common law or summary dismissal is the result of disciplinary proceedings, a notice period of 6 months applies. On the expiration of such notice, employment will terminate. There will be no notice if an individual agrees to voluntary exit or voluntary redundancy. b. If employment is terminated without the notice which it is stated in (a) would normally be given, having regard to the reason for such termination, compensation will be paid in accordance with the relevant provisions of the Civil Service Compensation Scheme. c. Unless otherwise agreed, an individual is required to give 3 months written notice to the Group HR Director if they wish to terminate their employment. Compensation for early termination is based upon the standard SCS terms and conditions as set out in the SCS Contracts. 45

  • Page 49

    Department for Work and Pensions Annual Report and Accounts 2011-12 Details of the service contract for each Executive Team member who has served during the year  The main details of service contracts are included in the table shown below. Officials Date of appointment End date of term Robert Devereux Permanent Secretary 01/01/2011 N/A Richard Heaton 02/01/2007 31/01/2012 Gill Aitken 01/03/2010 N/A Darra Singh 30/11/2009 30/09/2011 Terry Moran 14/06/2004 N/A Adam Sharples 06/09/2004 02/10/2011 Sue Owen 30/03/2009 N/A Hunada Nouss 08/03/2010 N/A Chris Last 02/01/2008 N/A Joe Harley 28/07/2004 31/03/2012 Vivien Hopkins 01/12/2010 30/09/2011 Notes: Where the end date of term is shown as N/A, this denotes that their appointment is on a permanent basis. All of the above service contracts are on a permanent basis and therefore there are no unexpired terms applicable. Details of any element of the remuneration package which is not cash Elements of the remuneration package which are not cash are classified as benefits-in-kind. Ministers and Executive Team  Rt Hon Iain Duncan Smith MP Secretary of State for Work and Pensions Steve Webb MP Minister of State for Pensions Rt Hon Chris Grayling MP Minister of State for Employment Lord Freud Parliamentary Under-Secretary (Lords) and Minister for Welfare Reform Maria Miller MP Parliamentary Under-Secretary and Minister for Disabled People  This information is audited by the Comptroller and Auditor General 46

  • Page 50

    Department for Work and Pensions Annual Report and Accounts 2011-12 The composition of the Executive Team during the year was as follows: Robert Devereux1 Permanent Secretary and Head of Department Richard Heaton Director General, Strategy, Information and Pensions to 02 October 2011 Director General, DWP Transformation until 31 January 2012 Gill Aitken Director General, Legal Group to 02 October 2011 Director General, Professional Services from 03 October 2011 Darra Singh Chief Executive, Jobcentre Plus to 30 September 2011 Terry Moran1 Director General, Universal Credit to 02 October 2011 Director General, Chief Operating Officer from 03 October 2011 Adam Sharples Director General, Employment Group to 02 October 2011 Sue Owen Director General, Welfare and Wellbeing Group to 02 October 2011 Director General, Strategy from 03 October 2011 Hunada Nouss1 Director General, Finance to 02 October 2011 Director General, Finance and Chief Financial Officer from 03 October 2011 Chris Last Director General, Human Resources Joe Harley1 Director General, Corporate Information Technology and Chief Information Officer Vivien Hopkins Acting Chief Executive, The Pension Disability and Carers Service to 30 September 2011 1 The above members of the Executive Team are or were also members of the Departmental Board. Departmental Board The Departmental Board is chaired by the Secretary of State. In addition to the Executive Team members, the Non-Executive Directors of the Departmental Board were as follows: Ian Cheshire Lead Non-Executive Director from 1 February 2011 Adrian Fawcett Non-Executive Director to 30 June 2011 Helen Stevenson Non-Executive Director to 30 June 2011 John Clare Non-Executive Board Member from 01 November 2011 David Lister Non-Executive Board Member from 01 July 2011 Willy Roe Non-Executive Board Member from 01 November 2011 Dame Clara Furse Non-Executive Board Member from 01 July 2011 Directorships None of the Directors held directorships which may conflict with their management responsibilities. 47

  • View More

Get the full picture and Receive alerts on lawsuits, news articles, publications and more!