The creation of a Department for Education and Employment gives Gillian Shephard greater Cabinet influence and spending power, but the upgrading is also likely to mean a host of new problems. Not all aspects of the employment portfolio that have been transferred fit easily into education, and the turf wars mentioned by Mrs Shephard may not be eliminated by forcing them together.

For the moment, Eric Forth, minister of state, has taken over most of the traditional tasks of Employment in dealing with benefits and strategies to get the unemployed back to work. Before the Cabinet reshuffle he had hopes of being shifted, but he has achieved the change without moving out of Sanctuary Buildings, the headquarters of the DFEE. Mr Forth also gets higher education, presumably because the Government wants an able presentation of what could be the difficult issues of student funding as a result of the higher education review.

The appointment of joint permanent secretaries - Michael Bishard has moved across from employment to join Tim Lankester - is curious as both are to be jointly responsible for education and training. The arrangement could also indicate that while a merger of at least the training aspects of employment with education has been on the cards for more than a decade, the decision appears to have been taken hastily and without consulting the departments.

Senior officials in the two departments are only now drafting a timetable for integrating the work. David Forrester, head of the FE branch at the former DFE, told the Education Select Committee that there is to be a period of consultation.

Appearing this week before the final meeting of the Select Committee on Employment, Mr Bishard appeared confident that he had a job for the foreseeable future.

As the first permanent secretary to have been appointed following public advertisement, it may not be long before he sees another advertisement to head the new department. The Department for Trade and Industry will have a vacancy for a permanent secretary next year and there is speculation in thecorridors of Whitehall that Sir Tim might move.

Other faces from Employment include the new junior minister, James Paice, who will share the problems of sorting out the academic and vocational courses available post-16 with Lord Henley.

The complexities of designing a raft of qualifications that provide parity of esteem between academic and vocational courses have been spelled out to ministers this week by Sir Ron Dearing.

In theory, the merger should work to the advantage of the development of a coherent framework covering schools and colleges, but in practice, it may be that much more has to be done on the design of vocational courses. Without sounding defeatist, Mr Bishard told MPs that there remain problems about the rigour and content of national vocational qualifications.

The logic of the new department points to the merger of the School Assessment Authority and the National Council for Vocational Qualifications, but the groundwork has yet to be done.

The new department also takes over the quest for a form of post-16 voucher.

So far, there does not appear to be a strategy for integrating what could become a sprawling empire. From running a department of 2,500 civil servants - with much of the difficult work of running schools carried out by local authorities - Mrs Shephard nominally has charge of a workforce that includes 40,000 in the JobCentres.

However, it may be that Mrs Shephard, as a former Employment Secretary, has long harboured a grand design for drawing together the two services. In political terms, it does no harm to do away with a department that focused attention on the unemployment figures. It is a reward, without taking her away from education.