Administrative budgets for the Department of Communities Local Government (DCLG) are to be cut by 33% over the four years to 2014-15. Sir Bob Kerslake, who will become permanent secretary at DCLG in November, told staff on Friday last week.
The current 6 director generals will become three and the existing 21 directors will be reduced to 15 under the changes.
The new top team was not named. Instead, a process will take place between now and Christmas to select the directors general and directors who will fill the most senior posts under his leadership.
The structure of DCLG will also be simplified. Two of the director general roles will cover the policy areas of localism (including local government, fire, communities and the big society) and neighbourhoods (including housing and planning). The third director general will lead finance and corporate services.
Kerslake, who is the outgoing chief executive of the Homes and Communities Agency, signalled today that he intends to complete the restructure of the department within two years.
He told staff that the scale of the reductions made some compulsory redundancies unavoidable.
However, he stressed that every effort would be made to minimise job losses on those terms, and that an initial voluntary redundancy scheme would shortly be offered to DCLG civil servants.
He said: "Our department's role is altering significantly under the government's localism agenda. We'll do more enabling and less intervening. We'll be a smaller department but stronger - and we will play a more strategic role, punching our weight in Whitehall.
"We're streamlining at every level, and it starts at the top.
"This is an opportunity to improve the way we work. It's my intention that we move at pace, making these changes in two years, to reduce the uncertainty for everyone."
Under the plans shared with DCLG staff, reductions will occur in sequence through the department, from the top down.
On Wednesday the Communities and Local Government Secretary, Eric Pickles MP, wrote to staff emphasising that change in the department would be managed in a fair and sensitive way, showing respect for the contribution civil servants had made.
