Stephen Byers, the Trade and Industry Secretary, has agreed that the DTI, one of the largest Whitehall departments, should be a test case to find what lessons the Government can learn from industry.
He has already met Byron Grote, executive vice-president of BP Amoco who lived through the company's savage cuts 10 years ago, to discuss reforms of the department. Mr Grote will examine the hierarchical civil service grading system and suggest ways to cut bureaucracy.
The investigation will worry civil service unions who fear job losses at the DTI, which employs more than 6,000 people.
Treasury sources say ministers want the recommendations to "mirror" reforms introduced at BP. The shake-up, conducted in 1990, created a flatter management structure and eliminated layers of bureaucracy. But more than 1,000 people, mainly middle managers, were sacked, and 90 per cent of the corporate centre committees dismissed. In 1990, BP had 120,000 staff worldwide but when it merged with Amoco in January this year the payroll was just 56,400.
Ministers believe there could be more general lessons for Whitehall. "We want to see whether the business model has lessons for the internal workings of a government department," said one senior Treasury insider. "The DTI ... could become the model for other departments."
The investigation is part of a wide-ranging inquiry into the effectiveness of the public sector by the Treasury's productivity panel. Mr Grote is one of seven members, all managers from the private sector invited to propose improvements in state-funded services.
The Treasury also plans an army of "mystery shoppers" to pretend to be ordinary people who, for example, sit driving tests or go to hospital, to identify problems with the services.
Alan Milburn, Chief Secretary to the Treasury, said: "Through the productivity panel, top-notch business talent will make sure the billions in additional resources we have provided really do feed through into better services on the ground."Reuse content