When the new secretary of state for work and pensions, Chloe Smith, took up her role last week, she will have faced an overflowing in tray.
The person in charge of the DWP is responsible for the biggest spending department in government, spending £217bn on pensions and benefits in the last financial year, as well as the nearly £10bn a year it costs to run the department.
She is responsible for a huge range of issues from employment and disability support to child maintenance and pensions.
DWP responsibilities
And with the public finances under immense pressure, first in response to the pandemic and now in response to the cost of living crisis, she will be under pressure from the Treasury to find savings in the benefits bill and in the costs of running her department.
The shadow of the Treasury is ever-present for ministers in the DWP – as the DWP is responsible for such a large part of government spending, it gets particular attention from the Treasury.
Smith has the advantage of having spent one year of her varied ministerial career in the Treasury so she will have some understanding of the Treasury view, but every cabinet minister struggles to do anything without the approval of the chancellor and his officials.
One thing I have observed with successive secretaries of state at DWP is that their attention ends up being increasingly focused on the ‘working age’ part of their department, with DWP pensions policy heavily devolved to the pensions minister.
Although the secretary of state is ultimately responsible for the whole department, there is a massive programme of welfare reform under way, involving millions of people being transferred across to universal credit, and those issues will form a large part of her focus.
In addition, if unemployment rises as expected, DWP will need to make sure that its JobCentres are well equipped to help people find their next job in the context of a severe economic slowdown.
Even within the pensions brief the department will not be short of things to do, though it is worth noting that key pensions policy issues such as the future of pension tax relief are not even within the remit of DWP, falling to Treasury to decide.
An early political call will be whether the triple lock on the state pension should be restored in the next round of upratings due in April 2023. Having broken the triple lock once, the government will be very reluctant to do so again.
But with inflation in the year to September likely to be in double digits, linking state pensions and benefits to inflation will cost far more than was originally planned when the department’s budget was set a year ago.
In reality this will be a call made at the top of government, with input from the DWP but with the final say ultimately resting with the prime minister and the chancellor.
