Milburn ordered to save Blair's 'blue sky' think tank

Alan Milburn has been asked to rescue the Prime Minister's personal think tank after concern that it is failing to deliver results.

The Strategy Unit is in crisis after failing to find a new director and severe cutbacks imposed by the Treasury, an Evening Standard investigation has revealed.

Mr Milburn has been told to restore the ?5million-a-year unit's reputation as the engine room for new policies. The role is being used to justify the minister's ?133,347 salary at taxpayers' expense for what will largely be a party political role in Cabinet.

In July director Geoff Mulgan joined the ranks of key advisers who have deserted No10 in recent months.

The unit, which at any time employs about 80 people, has had its work scaled back. Its budget is being cut this year by a quarter, to ?3.65 million.

The unit - responsible for "blue skies thinking" - was seen as an integral part of Mr Blair's system of government. More than 34 reports include studies on alcohol misuse, the state of sport and the Post Office network.

Critics say its influence has been on the wane for months.

"Usually their stuff is very thorough, well researched, really detailed and incredibly boring. But some of the recent reports have been slap-dash," said the head of one Westminster think tank. "There's a hell of a lot of reports that have gone nowhere."

It is alleged the unit has become a "holiday farm for academics and policy wonks". One former member described it as the "BBC 4 of Government". He added: "It's the place in Government where people can think."