Annual report also promises revised priorities and an evaluation of the body's effectiveness

The Office of Fair Trading (OFT) will increase the transparency of its work and create new principles for prioritising work, according to its annual report. It also plans to conduct a wide-ranging programme to measure its impact on markets.

The OFT is investigating illegal activities in the UK construction industry and is likely later this year to issue a statement of objections detailing where it thinks firms have broken the law.

It also has an ongoing inquiry into housebuilders, examining local competition between firms, their attitude to risk and constraints on expanding business.

Philip Collins, chairman of the OFT, said: “Last year the OFT made a commitment to deliver high-impact outcomes that would provide real and significant benefits to consumers.

“In the coming year we will continue to build on this commitment, working closely with our partners and stakeholders, focusing our resources on effective project delivery and carrying out evaluation of our work with the aim of delivering benefits for consumers in the most effective and efficient way whilst avoiding unnecessary burdens on business.”

HM Treasury plans to reduce the body's funding over the next three years. It will receive £65.7m in 2008/09, £64.1m in 2009/10 and £62.6m in 2010/11.

The OFT has also published a simplification plan, which fits with the wider government strategy of reducing administrative burdens on businesses, stakeholders and the public sector.