The £950-a-day pay which the Government’s new value for money tsar will receive is fair, a minister has said.

David Goldstone will be paid the equivalent of just under £50,000 a year when he takes up the position of chairman of the new Office for Value for Money, working an average of one day a month in the role.

The appointment, announced in the Budget, is aimed at scrutinising Government spending and minimising waste.

Ministers, however, have faced questions about whether the role itself represents value for money.

If he worked full time, Mr Goldstone’s pay would be worth nearly £250,000 – significantly more than the Prime Minister is paid.

Treasury minister Darren Jones suggested the “rate of return for the improvements” which the new Office for Value for Money will make “will be far, far greater” than Mr Goldstone’s pay.

Mr Jones, who is Rachel Reeves’ deputy, added: “It is right that we pay people for their time. We can’t expect people to work for free. That is an important way in which we do things in this country.

“Actually, the day rate for David is, on a benchmark basis, competitive.”

Mr Goldstone will be in post for a year and is responsible for providing advice to the Chancellor and Chief Secretary to the Treasury to save money by reforming systems and improving policy outcomes.

It is an independent role and he is not an employee of the Treasury.

Mr Goldstone is also a non-executive director of the Submarine Delivery Agency and HS2 Ltd.

He was previously chief executive of Parliament’s Restoration and Renewal Delivery Authority and chief operating officer at the Ministry of Defence.

Mr Goldstone also oversaw the Government’s £9.3 billion investment for the 2012 Olympics, including the Olympic Park venues and infrastructure.