A team of high-profile advisers from the private sector includes Clare Spottiswoode, the former gas industry watchdog, Andrew Foster, controller of the Audit Commission, and Dame Sheila Masters of KPMG, as well as Lords Simon and Sainsbury.
The new Public Services Productivity Panel met the Prime Minister yesterday to kick off its discussions on how to ensure that the Government could deliver the modernisation of public services.
It will monitor progress in achieving 500 departmental efficiency targets such as reductions in class sizes and hospital waiting lists.
The Treasury has pledged that every pound saved can be reinvested in public services rather than being clawed back into the Government's coffers.
Many departments are expected to make productivity improvements of 2 to 3 per cent a year, adding up to pounds 8bn by 2001/02. That compares to planned departmental spending of just over pounds 200bn in that year.
Last summer's Comprehensive Spending Review signalled the Government's determination to improve public sector efficiency. It emphasised that services would be provided by the private sector where that was more efficient.
In a separate move, the Treasury is likely to publish recommendations for the partial privatisation of statistics-gathering today.
Patricia Hewitt, Economic Secretary, will allow a few days for responses to a report from KPMG, the management consultancy, which urges the use of private companies for the collection of data on the economy.
The Treasury is also expected to make an announcement on the outcome of consultations on last year's statistics White Paper before long. It set out four options for meeting the Government's manifesto pledge to create an independent statistical agency.