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The Department for Innovation, Universities and Skills (DIUS) has been scrapped, making it the latest victim of the government's political turmoil.
Friday's cabinet reshuffle saw the DIUS merge with the Department for Business, Enterprise and Regulatory Reform (BERR) to form a new Department for Business, Innovation and Skills headed by Lord Mandelson.
Other of its responsibilities have been moved to the Department for Children, Schools and Families (DCSF).
A government statement said that the move would create a "single department committed to building Britain's future economic strengths". It will also bring policies for further and higher education closer to government business and commerce planning.
The DIUS cost £7m to set up just two years ago when it was created from a combination of the universities and skills functions of the former Department for Education and Skills and science and innovation functions of the former Department of Trade and Industry.
The Chartered Institute of Personnel and Development (CIPD) welcomed the closer alignment of skills and business agendas but questioned the timing of a departmental restructure.
John Philpott, CIPD public policy director said: "We welcome the opportunity to work with Lord Mandelson and his team on the crucial skills challenges that will shape the UK’s ability to thrive well beyond this current downturn. However, although there are definite merits in aligning the skills agenda even more closely with the business agenda, we despair at yet another change in the Government’s departmental structures for skills. Now is surely not the time to be embarking on yet another reorganisation of the civil service teams responsible for supporting businesses and individuals in boosting skills."
Philpott added: "The biggest challenge in raising skills and boosting UK productivity is ensuring leadership and management skills are up to scratch. The constant reorganisation of ministers, departments and agencies responsible for delivering the skills agenda itself is not setting a great example in this regard."
Further and higher education representatives have been scathing of the move. Sally Hunt, general secretary of the University and College Union, said: "UCU is very concerned that this merger seems to signal that further and higher education are no longer considered important enough to have a department of their own. The fact they have been lumped in with business appears to be a clear signal of how the government views colleges and universities and their main roles in this country.
"Education has the power to change people's lives, and if we are serious about the important role it can play in helping us out of recession, then we need experts in education at the helm, not business interests. We will be seeking an urgent meeting with, and assurances from, the minister that both further and higher education have clear and defined roles in the new department."
Pat McFadden, a minister from BERR, and the current science minister, Lord Drayson, will be secretaries of state in the new department.
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