Sajid Javid is considering plans to cut 4,000 jobs in his own department and its agencies, according to leaked documents.
The Business Secretary, who is currently tasked with saving 15,000 jobs in the steel industry, could have the core staff at his department reduced by 40 per cent, in cuts more severe than even Chancellor George Osborne requires.
Mr Javid ordered a review of staff levels at the Department of Business, Innovation and Skills (BIS) by management consultancy firm McKinsey soon after he began the job after the election.
The department has repeatedly refused requests to disclose McKinsey’s findings but a leaked strategy paper seen by the Guardian shows BIS is planning to cull at least 1,526 jobs by 2020.
Up to 4,103 could go if the department decides to implement the cuts at the top end of the scale recommended by McKinsey - 40 per cent of the department’s current core workforce.
It is part of a plan to save £350m - which is £100m more than the £250m required by the Treasury to stay within their spending controls.
The plans could also see major cuts for the agencies that promote apprenticeship, with the Commission for Employment and Skills shut down entirely and the Skills Funding Agency’s staff reduced by 40 per cent.
A departmental spokesman told the newspaper: "To be clear, there have been no changes to the plans already announced and discussed extensively with Parliament.
"We have a responsibility to the taxpayer to ensure as much of the department’s funding as possible is focused on front line services.
"We have deliberately set ourselves challenging savings targets consistent with the spending review and we will continue to explore options in detail before making decisions."
Unnamed Whitehall sources say any future decision on restructuring will be made by the permanent secretary - who is a non-political civil servant - and the board of BIS, not Mr Javid.
