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Quiet man imposes "high risk" JCP shake-up

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While all eyes have been focused on Andrew Lansley’s troubled health reform, Iain Duncan Smith has been putting in place a massive shake-up of the UK’s welfare system. And as LGC reveals today, this has not been confined to the new single Work Programme.

Indeed, Mr Duncan Smith has embarked on a top-down reorganisation all of his own, quietly putting in place a whole new structure for Jobcentre Plus, which his own officials have described as “high-risk” and union leaders claim is the thin end of a wedge aimed at privatising the agency.

JCP shake-up

As LGC reveals today, the Department or Work & Pensions (DWP) has confirmed it has implemented a major reorganisation of Jobcentre Plus (JCP), reducing the number of JCP districts across the UK from 48 to 37 - with considerably larger district areas put in place - and reducing its regional structure in England from nine areas to just five.

At the same time the department has confirmed that JCP will no longer exist as an independent agency and will be brought “in house”, along with the Pension, Disability & Caters Service (PDCS), thereby combining operational responsibility for all pensions, benefits and JCP’s employment services into a single job role.

The Department for Work & Pensions says the move is a necessary precursor to the introduction of the universal credit and is part of the department’s drive to reduce its “corporate functions” by 40%.

A DWP spokeswoman said “none of the changes affects the frontline services delivered by JCP”.

“They are about how the rest of the department supports the frontline and how the department can best deliver the government’s major welfare reforms,”she said.

Mandarins warn of risks

But by DWP’s own admission the reorganisation was implemented with “no specific consultation with local authorities and stakeholders” and was pushed through despite serious concerns from DWP’s own officials.

An internal DWP report on the JCP reorganisation, obtained by LGC through a Freedom of Information request, reveals concerns about pushing ahead with plans to rationalise the regional structure and concluded that such changes ahead of March 2011 would “present high risk to the organisation”.

It recommended that changes to the regional structure should be delayed to allow “more detailed assessment” to be carried out, as the demise of other regional entities, such as the regional development agencies, meant JCP had “effectively become the only regional strategic employment partner”.

However, a DWP spokeswoman said despite the reports recommendation, the changes had been implemented, as of 1 April, with the current structure of nine English regions plus Scotland and Wales, reduced to five English regions - the north west, the north east, southern England, central England, London and the Home Counties - and the two Celtic nations.

The DWP report revealed that this option, one of four mooted, would be adopted on “the basis that we are not clear about JCP’s future role”, prompting fears that DWP’s move to implement this option means further significant changes to JCP are on the horizon.

Thin end of the wedge?

PCS union general secretary Mark Serwotka said ministers were disinvesting from JCP and were reducing headcount at a time when unemployment was still rising.

According to PCS, the move to bring both JCP and the PDCS in-house, will see 40% of jobs cut from DWP’s corporate offices in Sheffield, Leeds and London, with more than 5,000 of the current 13,000 posts facing the axe before the end of this year.

Mr Serwotka said it was “dangerous and counterproductive to scale back the very department that helps people back into work and supports those who need our help”.

“The government should be investing in these areas to create employment opportunities and ensure proper support is available for people who are out of work,” he said.

He suggested the government was setting JCP up to fail in the face of lobbying from large welfare-to-work firms.

Last week the Association of Learning Providers (ALP), which represents the majority of providers awarded contracts in Work Programme, said the “next logical step” in the government’s welfare reform was to “privatise Jobcentre Plus and to allow it to compete with other providers in assisting people who have been out of work for a short or longer period.”

“We know the Work Programme contractors want to take over from JCP, but we think they’ve not yet convinced ministers,” a PCS spokesman said.

Dave Simmonds, Centre for Social & Economic Inclusion chief executive, said the privatisation of JCP employment services may come in the future, but for now the government still needs JCP - not least because it can not afford to extend the Work Programme to the newly unemployed.

He said that with young unemployed people transferring to the Work Programme after nine months and adults after 12 months, the JCP restructure was part of wider moves that would transform the agency. “We will see JCP focused less and less on employment services and more on benefit policing,” he said.

Jobs go but frontline ‘protected’

A DWP spokeswoman said the reorganisation of JCP would provide “significant challenges and opportunities” for JCP, but would not affect the number of Job Centres, Benefit Delivery Centres and Contact Centres and would “not affect the people working everyday with the public”.

“We will become a leaner, more flexible and productive organisation that delivers more of its services over the telephone and internet,” she said.

But she would not confirm the number job losses as a result of bringing JCP and the PDCS in-house. “We’ve only made decisions about the very top team at this stage,” a she said.

However, the spokeswoman did confirm that as part of the shake-up JCP chief executive Darra Singh would step down and would be replaced by a “single person on the executive team who is responsible for all delivery”.

Mr Singh’s office said he would leave the agency in September.

The DWP report said the “primary driver” of the reorganisation of the districts and regions was “efficiency and cost” and the geography of the new districts would be determined on the basis of reducing JCP “headcount”.

It added there was a risk that due to the reorganisation of districts and regions over larger geographic areas, the redeployment of staff “may not be possible and exits may become necessary”.

But DWP would not say how many jobs would be lost as part of the restructure of the regions and districts. A spokeswoman said staff numbers would be reduced through natural turnover and the end of a significant number of fixed term contracts for staff appointed to boost numbers during the recession.

“But we will need some limited voluntary exits. We will do everything possible to avoid compulsory redundancies,” she said.

‘Distraction & upheaval’

The DWP report also revealed that officials had a number of other “issues” with proposed rationalisation of JCP districts from 48 to 37, including:

  • concerns that the “distraction and upheaval” would impact on performance within JCP at a time of rising unemployment;
  • concerns that Trade Union relations “may become severely tested”;
  • worries that “local authority partners may not favour the approach” and that the new JCP district areas would “not fit with new local enterprise partnerships”;
  • concerns that the new districts may be “too big to manage in terms of geography” and “may require more resource than we are planning to put in”
  • concerns that the “heavy dependence on public sector” in some areas would pose a risk if unemployment rises
  • -and worries that there may be “increased estate costs at the outset as sites are mothballed” and that overall “costs may escalate”.

DWP said it had addressed these issues as it implemented the reforms. But a spokeswoman admitted that there had been “no specific consultation with local authorities and stakeholders regarding the restructuring”.

Anger in Manchester

As revealed by LGC in February, the move to merge the Cheshire & Warrington JCP district with Greater Manchester as part of the restructure has already raised anger, with key figures in Greater Manchester saying the decision was made purely on cost terms, took no account of the city region’s strategic economic geography, and was undertaken without consultation.

Mike Emmerich, chief executive of Greater Manchester’s Commission for the New Economy, said DWP had “acted unilaterally” in changing the boundaries. “It’s a sad indictment of the way central government works,” he said.

The DWP report revealed officials also had concerns, noting that the plan would create “stark mix of urban and rural, [with] inner city Manchester and ‘leafy’ Cheshire” and that “local authority partners may not favour this approach”.

The report said the department understood the importance of “geography and strategic links” when determining the district areas, “particularly the need to avoid cutting across local authority boundaries”. However, it said efficiency and reducing head counts trumped these concerns

Town halls shut out

Stephen Houghton, Barnsley MBC leader (Lab), who chairs the National Worklessness Forum, confirmed the review of district boundaries had been conducted without consultation.

He said Jobcentre Plus was the key local partner for councils in tackling worklessness but now DWP had “washed their hands” of local authorities. “All they say now is ‘go talk to your Work Programme contractor,” he said.

He said the lack of fit between JCP districts and local authority areas and new local enterprise partnerships would cause problems for developing strategic approaches to tackling unmeployment. “We’ve had this problem in the past and were getting it resolved but now we’re back to square one,” he said.

Meanwhile, Mr Simmonds said the move to larger JCP districts worked against the government’s professed localism agenda, with JCP becoming “more remote from local partners rather than less”.

Famously the quiet the man, Iain Duncan Smith’s top down reorganisation been implemented largely under the radar. Less loved than the NHS, changes to JCP are likely to cause less fuss than those proposed by the health secretary. But they may be no less profound .

The Jobcentre Plus restructure

Districts - 48 reduced to 37

  • Yorkshire & Humber - 3 districts

- remain the same

  • South East -4 districts

- remain the same

  • East of England - 4 districts to 3

- Cambridge & Suffolk merged with Norfolk

  • East Midlands - 4 districts to 3

- Lincolnshire & Rutland merged with Nottinghamshire

  • London - 6 districts to 4

- Currently three inner & three outer London districts - replace this “doughnut” structure with four districts that feed into centre of city to better reflect travel to work patterns

  • North East - 3 districts to 2

- Scrap South Tyne & Wear district by merging part with Northumbria and part with Tees Valley to form two new districts: Northumberland, Tyne & Wear and Durham Tees Valley.

  • North West - 5 districts to 4

- Merge Cheshire, Halton & Warrington into two districts - Halton & Merseyside (to be called Merseyside) and Cheshire & Warrington with Greater Manchester Central (to be called Greater Manchester South, Cheshire & Warrington)

  • South West - 4 districts to 3

- Split Gloucestershire, Wiltshire & Swindon and merge Gloucestershire with the West of England and Wiltshire & Swindon with Dorset & Somerset

  • West Midlands- 5 districts to 4

- Merge the Marches District into two new districts: Warwickshire, Hereford & Worcestershire and Staffordshire & Shropshire.

  • Scotland - 6 districts to 4

- Four new districts: West, East, Central and North.

  • Wales - 4 districts to 3

-Create three districts out of four

Regions and Countries - 11 reduced to 7

  • North West - unchanged
  • North East - unchanged
  • East Midlands, West Midlands and Yorkshire & Humber merged into new “Central England” region
  • East of England, South East, South West merged into new “Southern England” and “Home Counties” regions
  • London - unchanged
  • Scotland & Wales - unchanged


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