Chancellor Reeves Unveils Major 15% Cut to Civil Service Costs Amid Job Reductions

Chancellor Rachel Reeves has announced a plan to reduce government running costs by 15% by the end of the decade, focusing on administrative roles rather than front-line services. This initiative anticipates the loss of around 10,000 civil service jobs as the government embarks on a significant spending review. In a new directive, departments are instructed to achieve annual savings exceeding £2 billion by 2030.

Reeves, speaking on the BBC, emphasized that this cut is feasible due to advancements in technology and artificial intelligence. She highlighted that the Civil Service had expanded considerably during the COVID-19 pandemic and needs to be streamlined. By December 2024, nearly 548,000 individuals were reported employed within the Civil Service, covering diverse functions such as policy development and public services.

However, union leaders have voiced concerns about the impact of these cuts, asserting that the distinction between back-office and frontline services is misleading. Dave Penman from the FDA union warned that diminishing administrative functions could significantly affect public services, while Mike Clancy from the Prospect union stressed that civil servants are integral to delivering government objectives.

Reeves is also preparing for her Spring Statement, where further details on spending cuts are expected. The government aims to prioritize investments in essential sectors like the NHS. Despite acknowledging the need for savings due to disappointing economic growth and rising borrowing costs, Reeves pledged that public spending would see real-term increases each year, though she avoided confirming if specific departments like Justice or Home Office would be shielded from cuts.

Amidst criticism from the Labour left regarding austerity, Reeves defended the government’s plans by pointing towards substantial allocations for capital spending and the NHS. Meanwhile, Conservative shadow chancellor Mel Stride rebuked the government’s fiscal strategy, indicating that Labour’s management has left the economy in a precarious situation, attributing higher borrowing costs to market concerns.