Civil service to be ordered to cut more than £2bn from budget – as Reeves rules out tax rises in spring statement

The civil service is to be told to cut more than £2bn from its budget as part of the government’s spending review.

Chancellor Rachel Reeves is expected to unveil spending cuts during the spring statement next week – and has reportedly ruled out tax rises.

The FDA union has said the government needs to be honest about the move, first reported by The Telegraph, and the “impact it will have on public services”.

Civil service departments will first have to reduce administrative budgets by 10%, which is expected to save £1.5bn a year by 2028-29.

The following year, the reduction should be 15%, the Cabinet Office will say – a saving of £2.2bn a year.

Administrative budgets include human resources, policy advice and office management, rather than frontline services.

The chancellor has also said she won’t be putting up taxes on Wednesday, telling The Sun On Sunday: “This is not a budget. We’re not going to be doing tax raising.”

Ms Reeves added: “We did have to put up some taxes on businesses and the wealthiest in the country in the budget [in the autumn].

“We will not be doing that in the spring statement next week.”

The chancellor has repeatedly insisted she won’t drop her fiscal rules which preclude borrowing to fund day-to-day spending.

:: Rachel Reeves, Mel Stride and Daisy Cooper appear on Sunday Morning with Trevor Phillips from 8.30am

Civil service departments will receive instructions from the Chancellor of the Duchy of Lancaster Pat McFadden in the coming week, The Telegraph reported.

“To deliver our Plan for Change we will reshape the state so it is fit for the future. We cannot stick to business as usual,” a Cabinet Office source said.

“By cutting administrative costs we can target resources at frontline services – with more teachers in classrooms, extra hospital appointments and police back on the beat.”

The move comes after the government last week revealed welfare cuts it believes will save £5bn a year by the end of the decade.

👉 Click here to listen to Electoral Dysfunction on your podcast app 👈

FDA general secretary Dave Penman said the union welcomed a move away from “crude headcount targets” but that the distinction between the back office and frontline is “artificial”.

“Elected governments are free to decide the size of the civil service they want, but cuts of this scale and speed will inevitably have an impact on what the civil service will be able to deliver for ministers and the country…

“The budgets being cut will, for many departments, involve the majority of their staff and the £1.5bn savings mentioned equates to nearly 10% of the salary bill for the entire civil service.”

Ministers need to set out what areas of work they are prepared to stop as part of spending plans, he said.

“The idea that cuts of this scale can be delivered by cutting HR and comms teams is for the birds. This plan will require ministers to be honest with the public and their civil servants about the impact this will have on public services.”

Read more:
Analysis: UK growth forecast set for major downgrade
What could be announced in the spring statement?
The spring statement – what you need to know

Mike Clancy, general secretary of the Prospect union, warned that “a cheaper civil service is not the same as a better civil service”.

“Prospect has consistently warned government against adopting arbitrary targets for civil service headcount cuts which are more about saving money than about genuine civil service reform.

“The government say they will not fall into this trap again. But this will require a proper assessment of what the civil service will and won’t do in future.”