Usually the best way to work on this is from the 'inside out' so the friends idea of adding an oil is a reasonable one. You can consider trying Derm Caps or Linatone for example.
With him having weight issues you might want to have him checked for a low thyroid level as that can lead to weight gain and to skin issues. You can read about thyroid issues here
http://www.marvistavet.com/html/body_hypothyroidism.html
and its pretty common in this breed too.
In case the skin issue goes along with a yeast or bacterial infection you could try a Malaseb or Chlorhexiderm shampoo. Both can clear up skin infections. Follow directions on the bottles for how to use them.
If you are sure its not infection you might try an oatmeal shampoo and adding a conditioner to the rinse process. www.petedge.com is one site that carries all kinds of dog shampoos and conditioners. I'd stay away from tea tree oil and other things that might irritate rather than moisturize.
Hope this helps you!
Dog Expert:Rescue, Train,Breed,Care
30+ yrs dog home vet care & nursing, rescue, behavior&training, responsible show breeding, genetics