Consumer affairs minister Norman Lamb said that the charity would become the "publicly-funded voice of consumers", which will also be charged with representing consumer interests in sectors that are not separately regulated. Existing consumer interest body Consumer Focus will be disbanded.
A new National Trading Standards Board (NTSB) will take on responsibility for enforcement cases that that go beyond local authority boundaries, including internet scams. It will also be responsible for gathering intelligence on rogue traders operating at a national or regional level from local Trading Standards departments in England and Wales.
From April 2013, £10.5 million funding from the current OFT enforcement budget will be redirected to Trading Standards departments in Scotland, England and Wales to "build on local expertise" and strengthen existing mechanisms for cross-boundary working. The Convention of Scottish Local Authorities (COSLA) has set up a task group to look at how Scotland can best deliver changes similar to the new NTSB in the short and long-term, the Government said, which could include further devolution of consumer advocacy issues.
Northern Ireland has its own consumer protection mechanisms which will not be affected by the changes.
Lamb said that under the current system, it was not always clear which body consumers in need of advice and support should turn to first. He added that the new NTSB would allow "better coordination" between enforcers and consumer bodies.
"A new National Trading Standards Board is exactly what we need to combat priority areas such as loan sharks and internet scams," he said. "The Citizens Advice service will become the publicly-funded voice of consumers, championing their needs and empowering them to make the right choices for themselves. All of the reforms will ensure that we have the right system of help, advice and protection for consumers."
However consumer body Which? warned that increasing the existing bodies' remits would "pile more pressure" on already over-stretched local resources.
"Giving OFT responsibilities to local trading standards officers and the Citizens Advice is like asking GPs to carry out heart surgery," said the organisation's chief executive, Peter Vicary-Smith. "The Government seems intent on wasting millions of taxpayer pounds restructuring quangos and piling pressure on those who are already overstretched on the frontline."
The Government announced last month that it plans to merge the OFT's existing competition functions with those of the Competition Commission to create a single Competition and Markets Authority (CMA) with the power to "investigate practices across markets", including public interest issues that arise as a result of unfair practices. The CMA will retain the OFT's current market studies function, but will forward individual enforcement actions to the NTSB unless they relate to problems where consumer choice has been hindered.
A new consumer advice line set up by the Citizens Advice service began on 2 April, succeeding the Consumer Direct line previously run by Consumer Focus. Consumer Focus itself will be replaced by a technical Regulated Industries Unit, which will continue to represent consumer interests in the regulated energy and postal services sectors.
This unit, the NTSB, CMA and the Citizens Advice service will be able to share intelligence for the benefit of consumers, the Government said. The partnership will also report regularly to the Minister for Consumer Affairs on the work of the system as a whole.
Gillian Guy, chief executive of Citizens Advice, said that the charity already had a "strong history" of advising and championing consumers at both local and national levels.
"We're pleased that this decision will now allow us to do more to help consumers in this way," she said. "We will work closely with Consumer Focus and the Government to ensure a smooth transition for the benefit of consumers."