ODPM faces the axe after next general election

The Office of the Deputy Prime Minister could be abolished or emasculated after the next general election – regardless of who wins it.

The Conservatives this week said they could save £2.3bn by slimming down the ODPM to become the Department of Local Government.

They would also scrap Prescott’s flagship Sustainable Communities Plan, which aims to build 200,000 homes in the South-east by 2016.

However, should Labour win a third term, it is understood that prime minister Tony Blair is considering scaling down the ODPM’s responsibilities, leaving it with little real power.

It is understood that Prescott would continue as deputy prime minister but would lose the regeneration and local government portfolios.

A Whitehall source said: “Prescott could end up chairing a cabinet committee in future but not have a specific ministerial brief. It could be a chance to break the ODPM.”

Observers are expecting a general election in May, although Tony Blair could delay having a poll until June next year.

Should the Conservatives win the election, it is understood they would bring in a plan based on a study of Whitehall expenditure by David James, the Tories’ efficiency expert.

Prescott could end up chairing a cabinet committee in future

Whitehall source

This focuses on traditionally Conservative principles of reducing the size of central government and increasing regional decision-making. James calculates that a total of £6.7bn of cuts could be made.

James says £255m could be saved by getting rid of the ODPM, the currently unelected regional assemblies and slimming down the roles of regional quangos such as the North West Development Agency.

The party calculates that more than £1bn could be freed up by shelving the communities plan. The emphasis would be on reversing the culture of Whitehall targets and government control.

A Conservative party spokesperson said the plans were intended to cut out waste at the heart of government, and to create a better relationship between housing provision and need.

He criticised Labour programmes such as the communities plan and the Neighbourhood Renewal initiative as relying on state intervention tactics to increase affordable housing. The Conservative favour joint-equity schemes as a way of helping people to get onto the property ladder.

The party also estimated it could make £700m from the sale of surplus public sector land.

• The Conservative party has called for the government to release details of the administration of Railtrack, under the Freedom of Information Act.