Last minute reprieve for DTI

THE Department of Trade and Industry will be granted a last minute reprieve tomorrow in Gordon Brown's three-year spending review.

But the price of survival will eventually mean the loss of its historic law enforcement functions, such as company inspections and running the nation's Official Receivers, Financial Mail on Sunday understands.

A wide-ranging Whitehall efficiency drive is expected to claim the DTI as its highest-profile victim.

But the department is understood to be confident that Trade Secretary Patricia Hewitt's staunch defence of its role in promoting business has convinced the Chancellor that it should have a future.

While its 10,520 workforce is expected to be cut back as part of Brown's efficiency drive, some operations will receive extra funding.

These include the so-called enterprise capital funds, which seek to invest in companies unable to raise money, either because they are in deprived areas, or trying to develop new products - or both.

There will also be extra funding for the department's manufacturing advisory service, which sends teams of experienced business people to provide consultancy to smaller companies. This is the latest version of the 'enterprise initiative'.

The biggest boost, however, will be for the DTI's 'technology strategy' which seeks to turn bright ideas in universities into commercial propositions.

But while the DTI persuaded Brown that its business support activities generate more money than they cost, that role is thought to be incompatible with policing companies hit by fraud or insolvency.

Ultimately, this is likely to transfer to another ministry, possibly the Department for Constitutional Affairs. This would leave the DTI looking more like the US Commerce Department.