The government’s lead non-executive director has quit with more than a year of his term to run, paving the way for a prominent businessman to inherit one of the most powerful roles in Whitehall.

Sky News has learnt that Lord Nash, who was appointed by the prime minister in July 2020, has stepped down from the post after weeks of speculation among government sources.

Insiders said on Wednesday evening that Michael Jary, the lead non-executive director at the Department for Levelling Up, Housing and Communities, would replace Lord Nash as the lead director for the whole of government.

An announcement about the changes is expected to be made on Thursday.

The role is an influential one, convening board members from every major Whitehall department to help strengthen governance and bring a more commercial perspective to the running of government.

It has existed for more than a decade, initially being held by Lord Browne, the former BP chief executive, who helped create the system of non-executives which has seen an influx of businesspeople onto departmental boards.

The move has had mixed results, with some of those who have participated saying it has helped ministers conduct their roles more efficiently, while others have suggested it has created scope for conflicts of interest and had little impact on the bureaucracy which plagues the civil service.

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Lord Nash, a former schools minister who set up a private equity firm called Sovereign Capital during a 30-year career in finance, was appointed to serve a three-year term as the lead independent director.

The exact reasons for his decision to stand down early were unclear, although one civil servant pointed to his close relationship with Lord Agnew, the former Treasury minister who resigned at the despatch box in January in protest at the mishandling of COVID loan fraud.

His successor, Mr Jary, is a former partner at the consulting firm OC&C Strategy Consultants.

He now chairs Duchy Originals, the organic food brand set up by the Prince of Wales in 1990, and sits on the board of Barclays Bank UK.

The Cabinet Office declined to comment.

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