21 September 2006 | Rebecca Ellinor

The Office of Government Commerce (OGC) may be scaled down following indications that its funding will be cut. Responding to an SM enquiry about a possible restructure, an OGC spokesman confirmed its future set-up was under review.

"There are no decisions yet on the future of the OGC... but like other parts of the HM Treasury group, it is likely to be smaller as a result of the review.

"The OGC is taking stock of the implications of the early settlement for the HM Treasury group that the Chancellor announced in the last Budget," he said.

"This implies a 5 per cent cut in the resource allocation across the entire HM Treasury group."

"As such," he added, "the OGC has been conducting one of the 'zero-based reviews' that many departments are now taking as part of the Comprehensive Spending Review 2007 process."

Zero-based reviews ask of organisations "do we need it?" and if so, "how can it be improved?"

As part of the government's efficiency programme, departments are looking to make savings, but not all have been subject to a zero-based review which examines whether their existence is even necessary.

The OGC review was conducted between January and June. Treasury ministers are looking at the recommendations and are expected to make a decision on the future of the OGC by early October.

The ministers' decision could mean the OGC loses some of its current responsibilities and/or gains new ones.

Financial aspects of the decision will take effect from April 2007 but any proposed reduction in staff is expected to take place before next spring.

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