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— 10 October 2007 —

The Department for Work and Pensions has affirmed its commitment to the modernisation of the welfare system. As announced at Budget 2006, over the Comprehensive Spending Review period, the Department for Work and Pensions (DWP) is set to be given access to a £550m Modernisation Fund to support an ambitious value for money and service transformation programme.

The programme is expected to generate annual net cash-releasing savings of £1,225m by 2010-11. This will allow the DWP to continue to deliver its priorities within a budget that falls by over 5 per cent per year on average over the CSR07 period, including:

• introduction of the Employment and Support Allowance to replace incapacity benefits for new claimants and national rollout of the Pathways to Work programme to help people with a health condition or disability to get into work;
• a proposed new Child Maintenance and Enforcement Commission to improve financial support for children with non-resident parents;
• and a reformation of state pensions from 2010, with steps to reform private pensions.

We will be taking forward a radical programme that will fundamentally change the lives of British citizens for the better: thousands of people given the chance to work and develop a career, creating a new Child Maintenance and Enforcement Commission to ensure that children get the money they need and the setting up of the Personal Accounts Delivery Authority so that workers across the country have the chance to save for their retirement.Peter Hain, Secretary of State for Work and Pensions

Hain said the settlement would enable the government to start delivering full employment within a generation, and build a welfare state that is flexible enough to meet the needs of all the people across all ages and generations.

The Department for Work and Pensions' ambitious value for money reform programme will generate annual net cash releasing savings of £1,225 million by 2010-11 including £455 million through its change programme and £500 million on procurement of goods and services.

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