By Paul Lewis
BBC Radio 4's Money Box
Mr Smith said he is "committed" to making a success of it
The minister cutting 11,000 jobs from the Department for Work and Pensions (DWP) has refused to give any guarantee the service will improve.
The details of the cuts were announced on 29 June and will involve the closure of 10 out of 29 new pension centres; and the moving of work from 550 benefit offices to just 100.
Speaking to the BBC Radio 4's Money Box programme, Secretary of State Andrew Smith said:
"Of course it is never easy carrying through this scale of transformation. It is a very big challenge but we are committed to making a success of this."
However, when asked directly if he could guarantee fewer mistakes and a faster service in the future he replied:
"I am very cautious about making guarantees. But we are absolutely committed to making a success of this and I am confident that we will."
But Alan Barton, a pensions policy officer at Citizens Advice, said this is the wrong move to make:
"We are very concerned that the quality of service provided to people who apply for benefits is not as good as it should be now.
"There are too many delays, too many wrong decisions, and we think government priority should be to provide a better standard and put right what is wrong at the moment rather than work to a target of reducing the number of staff they employ."
However, Mr Smith said the department was investing in more sophisticated computer systems and better premises, which would help the DWP become "a more client and customer-focussed organisation."
He insisted that now was the right time to close 10 of the 29 new pension centres which had been opened over the last two years to deal with the benefits paid to 10 million pensioners.
BBC Radio 4's Money Box
Money Box was broadcast on Saturday, 3 July, 2004 at 1204 BST.
And he continued: "We always knew that in getting pension credit underway and transferring existing recipients... onto the pension credit, and then getting the extra numbers on... over a short period of time, that there would be a bulge in our staff [which] would diminish over a period."
Although two million eligible pensioners are still not claiming pension credit Mr Smith said the government was on target to get the new benefit "to three million people by 2006... and we do believe it can be done with fewer staff."
He said this is partly because the DWP is "raising its game" with new computer systems and improved staff training.
He said it had learned a lot "from the failures" of previous government computer projects and was now concentrating on "smaller more incremental improvements that offer a much better way of meeting the challenges we face."
The 11,000 jobs that will go this year are part of the 30,000 DWP job cuts announced in March by Chancellor Gordon Brown in his Budget. The remaining 19,000 will go over the next four years.
BBC Radio 4's Money Box was broadcast on Saturday, 3 July, 2004, at 1204 BST.
The programme was repeated on Sunday, 4 July, 2004 at 2102 BST