DEPARTMENT FOR SOCIAL DEVELOPMENT
MANAGEMENT BOARD MEETING
Thursday 18th June 2015
Board Members
Present:
Andrew Hamilton (Temporary Permanent Secretary)
Tommy O’Reilly (Chief Executive, Social Security Agency)
Tracy Meharg (Deputy Secretary Urban Regeneration and Community
Development Group)
Ian Snowden (Deputy Secretary Resources and Social Policy Group)
Deborah Brown (Director of Financial Management)
Roy Keenan (Independent Board Member)
Attendees
Dave Wall (Director of Communications, Policy and Strategic Support)
Maeve Walls (Director of Human Resources)
Mick Shine (Secretariat)
Apologies
Deep Sagar (Independent Board Member)
1
INTRODUCTION
Andrew Hamilton welcomed everyone to the meeting and outlined the necessity of
the Board to have a meeting to discuss and address the challenges facing the
Department over the next nine months.
Andrew outlined the areas that the Board would focus on at the meeting:
The Department’s Finance position and the key risks;
Welfare reform and the key risks; and
The Department for Communities and the key risks.
He further added that there is a lot of uncertainty around a number of issues at the
moment at that this invariably will have a knock on affect on the risks facing the
Department and the business areas. He stated that as a Board we needed to be
sure that we have identified all the major risks, identified any ‘knock on’ effects and
that the Department has in place plans to address the challenges that lay ahead.
FINANCE AND THE KEY `RISKS
This presentation was delivered by Ian Snowden and Deborah Brown
The 2015/16 budget is £63.3m (9.7%) less than last year and the budget also
assumes full implementation of the Stormont House Agreement.
The breakdown of the budget is:
Resource Budget ------------------------------£590M
Non-discretionary (HB and Social Fund)--£140M
Staff Costs---------------------------------------£175M
General Admin----------------------------------£30M
Grant in aid to NDPBs-------------------------£66.4M
Programmes-------------------------------------£147M
2
This funding is dependent upon the Voluntary Exit Scheme (VES) proceeding as
planned. The timings for the planned exit are important as savings are determined by
how many avail of the scheme and during which tranche of the scheme.
A number of uncertainties were highlighted in relation to the Department’s finances,
these included, the agreement of the Budget Bill, the potential risk for further in-year
cuts by Westminster, the future direction of Welfare Reform and the progress and
direction of other major reform programmes.
At this moment the Department’s savings delivery is on target.
The Board then discussed the financial risks that the Department was facing and
what steps the Department could take to alleviate the impact of these cuts. A budget
statement is expected on 8 July by the Chancellor and the Government is committed
to reducing public expenditure, its aim is to eventually ‘balance the nation’s books’.
The Department has taken steps to ensure it operates within budget. The Permanent
Secretary has also written to Deputy Secretaries and requested no new discretionary
spend and an examination of existing commitments and budgets to ascertain any
potential easements.
Proposals for reducing expenditure commitments in year had been prepared for
Ministerial decision. The outcome however was dependent on an assessment of the
likely level of reduction to be imposed in the Executive/Dept of Finance.
WELFARE REFORM AND THE KEY RISKS
Tommy O’Reilly gave an overview of the work and risks facing Welfare Reform. The
current budget of £4.5 billion is expected to rise to about £6.5 billion by 2018 and
individual payments will rise from 25 million to 30 million by 2018. The current
600,000 customers are expected to rise to 900,000 by 2018.
This increase in budget expenditure and customer base is expected to affect SSA
business processes and activity. The Agency currently deals with 7 million phone
calls, this is expected to rise to 10 million by 2018, other correspondence is expected
to remain static or reduce from the current level of 4 million and face to face
interventions of 1 million per year may increase slightly.
The Agency has identified the Welfare Reform risks and drafted measures to deal
with these risks, however these are based upon the following assumptions:



DSD/SSA remains responsible for delivery of welfare reform
The legislative process is completed before the end of the mandate
Future Ministerial commitment to implement reforms.
3
If there are changes to any of these factors, then a further risk analysis will be
required.
The SSA is facing a number of risks associated with Welfare Reform and these can
be broken down into financial risks, operational risks and staffing risks.
The financial risks include the following:




Securing funding for service delivery during the period of dual running of
benefit systems;
Being able to deliver cash releasing targets during the next SR period;
Increasing costs of the DWP IT systems;
Achieving the benefits from investment in implementing welfare reform.
Operational Risks include:




Development and implementation of the Stormont Castle agreement;
The ability of the SSA to handle the scale of the implementation challenges;
The transformational change in structure and staffing;
The transformational change for customer and service delivery.
The SSA is also facing a number of staffing risks which include the following:





Being able to manage the numbers of staff required for implementation;
The skill sets required for implementation and delivery;
Different management structures;
Service delivery challenges;
Performance management challenges.
The Board discussed these risks and challenges. The Board acknowledged the work
that had been undertaken to address the risks to date, but noted that a number were
out of the control of the Department.
THE DEPARTMENT FOR COMMUNITIES AND THE KEY RISKS
Tracy Meharg explained the key challenges and risks for the Department for
Communities as well as proposals to deal with each of these risks. These risks and
the proposals to deal with them are:


The inability of the new department to preserve business continuity and
deliver its key targets. To counter this risk, a log of key tasks and posts which
are critical to business continuity has been developed;
The failure of participating departments to agree functions and responsibilities
resulting in project failure and considerable political and reputational damage.
The counter measure for this risk is the agreement of the programme Senior
4



Responsible Owner (SRO) with HOCS and participating Permanent
Secretaries for the handling of contentious issues and an agreed resolution;
The failure to adequately identify and transfer IT systems and fundamental
information resulting in a reduced capacity for business delivery. To neutralise
this risk, the Programme IT work stream is working closely with all concerned
and is identifying special needs as well as seeking advice on project
workstream best practice approach;
Insufficient time and resources within project workstreams resulting in
inefficient structures and operating systems for the new department. The
Project Board has ensured that the design workstream is adequately financed
and that the Finance workstream has sight of all budget transfers and is thus
able to identify savings or opportunities for future savings;
A failure to communicate effectively with staff, thereby increasing the potential
for low staff morale, drop in productivity and increased staff sickness absence
after May 2016. The Communications Workstream is employing early and
regular engagement with staff.
The Board then discussed these risks and the proposed counter-measures. Tracy
explained that the Programme Boards will not end in May 2016 and that unknown
risks from incoming departments will have to be addressed.
In May 2016 the Programme Board will be at phase 2 of the project and this will
entail “bedding in” teething problems. Tracy explained that as the clock ticks down to
May 2016, specific plans for a smooth integration will be developed.
Tracy explained the value of the workstreams and the importance of those in charge
of these workstreams, she explained that members of the Programme Board still had
to return to their own individual departments and continue working on their own
departmental work and that staff involved were very busy.
The Board recommended that Tracy should consider whether additional support
should be sought, perhaps through the employment of consultants to ensure delivery
of the project on time.
Action Point 1: Tracy to explore avenues for utilising professionals and
consultants.
CONCLUSION
The Board agreed with Andrew when he said that he found the discussions
informative and helpful. The Board agreed that although they were aware of the
challenges and risks that faced the Department over the next 10 months, it was
5
confident that the Department was taking measures to address these to the extent
that they were amenable to intervention and controllable by the Department.
Andrew recapped the risks and measures that had been discussed and added that
tough negotiations lay ahead regarding functions and funding for the new
Departmental arrangements for May 2016. Andrew added that in view of discussions
at this meeting, there may be a need to amend the Corporate Risk Register to reflect
these changes.
6