Announcing the recommendations of an independent efficiency review, Patricia Hewitt, Economic Secretary to the Treasury, said there was scope for annual cost savings of up to pounds 20m at the ONS.
Ms Hewitt said she wouldconsult with trade unions before implementing the recommendations of the review, which included involving private sector firms in data collection and rationalising support services. An independent steering group, chaired by the Lloyds TSB chief executive Peter Ellwood, recommended that the ONS's 3100-strong workforce be reduced by one-third.
If the recommendations are implemented, 680 ONS jobs would transfer into the private sector, while another 350 would be eliminated altogether.
No redundancies should be necessary, according to the steering group, with natural wastage accounting for most of the reduction in head count. The departments most affected are likely to include personnel, finance, marketing and IT.
The steering group also recommended a shake-up in senior management at the agency, arguing that a strengthened management team and a new management structure would be needed to carry its proposals forward.
The ONS, which came under fire for its handling of controversial revisions to key earnings figures in the autumn, is also the subject of a series of separate reviews.