The CBI has added to the uncertainty over the Department of Trade and Industry by launching a review of its future and what business wants from government, The Times has learnt.

The biggest business organisation will set out its policy on the DTI in the next couple of weeks. Its move comes after the declaration by the EEF manufacturers’ organisation that the DTI could be replaced in a government restructuring without any harm to business.

Martin Broughton, the CBI president, has said already that scrapping the DTI would be acceptable to business if its responsibilities were given prominence elsewhere in the Cabinet. It is widely expected that the DTI will be scrapped or substantially scaled down under a departmental reorganisation under Gordon Brown.

The CBI’s review highlights business concerns about the effectiveness of the department. It says: “Many perceive it is not a heavyweight player at the Cabinet table; this inevitably impacts on the department’s ability to attract top-class talent.”

Although small and medium-sized enterprises and manufacturers in particular would not want to see the £2.8 billion programme spend (not all of which rests with the DTI) eroded, they have concerns over the accessibility of the money and question if it is spent wisely.

John Cridland, deputy director-general of the CBI, said: “Our formal policy position is still evolving. The exact structure of government is rightly a matter for prime ministers.”

However, it is clear that, whilst CBI members are not fussed about the name on the brass plaque, they do regard a strong and distinct Cabinet champion for business as non-negotiable. “Simply breaking the DTI up and scattering its fragments across Whitehall would not serve the long-term interests of the economy,” the CBI said. “Policy areas like energy and employment are so vital that their sponsor must be one that has competitiveness as its core focus.”

The CBI said that it had launched the review because it was “clear that the DTI’s future is up for debate within some circles of government and opposition”.

The department has long been the focus of scrutiny because it is seen as being in the shadow of the Treasury and because its brief is so wide-ranging. Nicholas Ridley famously asked what the DTI was for when he became Trade and Industry Secretary in 1989. Alistair Darling, the present Trade and Industry Secretary, has failed to give a ringing endorsement to the department, saying that a name on a brass plate did not matter so long as the functions of the department were carried out.

The DTI, formerly the Board of Trade, began life looking after Britain’s colonies. In the Second World War it co-ordinated clothes rationing. Now it looks after industry, energy, consumer protection and is responsible for the seasonal time changes.

Times Recommends

• C&G axed - 1,660 jobs to be lost
• UK house prices rise 1.1% as buyers return
• Mixed reaction to US banks repaying bailouts