In answer to a parliamentary question Mr Lilley said:
'In February, I launched the Change Programme to achieve a step change in the effectiveness of the department of social security and all its agencies. It will involve streamlining benefit processes, introducing new information technology and greater involvement of the private sector.
'I have today approved three initiatives involving greater collaboration with the private sector as the next stage of the department s drive to review and improve the delivery of social security.
'The second initiative will involve three private companies - or consortia - appointed following open competition to work in conjunction with the Benefits Agency in running benefit delivery in three of its 13 areas (Yorkshire, West Country and East London & Anglia Area Directorates) for 12 months.
'All three companies will assist the Benefits Agency with the development of new business processes and information technology. They will be invited during the twelve month period to submit proposals for any elements of the agency s business which could be run differently, including the possibility of further parts of the operation being run by the private sector.
'The third initiative is to launch the procurement process for an Information Systems/Information Technology strategy to enable greater sharing of data between benefit systems, working closely with the private sector to provide the most up to date technologies, expertise and funding.
'These initiatives are designed to improve the administration of the benefit system. They will not change any individual s benefit entitlement.'