3.11 The Department has made strategic decisions about reducing its activities in the Strategic Defence and Security Review. It has also recognised the need to transform the way it works following the Levene Review and has begun to implement these changes. Despite good progress in developing a new operating model, the impact of such a significant reduction in personnel on delivery of the Department's strategic objectives is not yet certain. Success will depend on the Department's ability to deliver its programme of structural and behavioural change.
3.12 While some duplicated administrative functions may be removed, and other bureaucratic processes streamlined, reductions on this scale are likely to require profound changes to ways of working, whole-scale outsourcing or privatisation, or stopping some activities. We spoke to key personnel involved in implementing previous headcount reduction initiatives, such as PACE and Streamlining. They told us that while these initiatives successfully reduced headcount, the associated changes in working methods that were sought from these initiatives did not materialise.
3.13 Two of the notable tier one programmes relating to defence estates and corporate services represent progress towards different ways of working. The Defence Infrastructure Transformation Programme and the Defence Corporate Services Transformation Programme are designed to centralise and rationalise estate management and corporate services respectively. These programmes are expected to reduce 2,000 posts each. The Defence Equipment and Support organisation is also progressing its plans through the development of its 'Materiel Strategy'. However, so far, we have seen little evidence of the detail that will be needed to support initiatives that will substantially change the way the Department works.
3.14 Recent NAO reports have focused on how other departments plan to reduce costs, for example, the Department for Work and Pensions plans to reduce costs and headcount. At the time of our report, the Department for Work and Pensions did not have a clearly defned target operating model and was undertaking reviews to help develop one. Jobcentre Plus had developed its model to a greater extent than other parts of the Department
for Work and Pensions. This model considered how it would change the way it worked and included reducing the number of contact centres, benefit delivery centres and Jobcentres, and relying more on online services.13
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13 Comptroller and Auditor General, Reducing costs in the Department for Work and Pensions, Session 2010-12, HC 1089, National Audit Office, June 2011.