RACHEL Reeves will light a bonfire of civil service pen-pushers, with tens of thousands of jobs set to be axed.
At the Spring Statement today the Chancellor confirmed Whitehall running costs will be slashed by 15 per cent by the end of the decade.
The push to reduce the bloated state comes amid dire growth predictions for the economy from the Office for Budget Responsibility.
Ms Reeves announced that she’ll swing the axe at 10,000 back office and administrative roles across Quangos and government departments.
Among the jobs in the firing line are human resources, policy advice, communications and office management.
Around £2bn freed up from the bonfire will be reinvested into front line services such as policing.
This week the Chancellor warned that the civil service had “massively” increased during the pandemic and still hasn’t returned to its pre-Covid size.
She insisted that cuts were “more than possible” because swathes of jobs can be replaced by artificial intelligence.
A whopping 547,735 people were employed by the state as of December 2024.
A £3.25 billion Whitehall “transformation fund” will be used to pay off failing civil servants, Reeves has said.
According to Ms. Reeves, the initial funds from the program, which aims to support public services in adopting advanced technologies like artificial intelligence, will be used for voluntary exit programs to decrease the civil service’s workforce.
What is the Spring Statement?
By Ryan Sabey, Deputy Political Editor
Rachel Reeves will deliver the Spring Statement – nearly fifty years after the first such “mini-Budget” was delivered.
The statement, which over the years has been delivered in both autumn and Spring, was started in 1976 at the end of the year.
The law changed in 1975 to ensure there were two economic forecasts every year as opposition MPs and the public could keep track of government plans.
Rachel Reeves has emphasized that there will be just one significant financial event annually, with a Budget scheduled for the autumn, meaning there will be no tax increases or cuts this year.
Previously, Gordon Brown, who was in the Labour party before Ms. Reeves, presented the Budget in the autumn and would provide a Pre-Budget Report each autumn to offer an overview of the country’s financial situation.
Fast forward to 2010 and George Osborne, Chancellor until 2016, set up the Office for Budget Responsibility, to provide an independent forecast.
They were also there to dissect the state of the economy – producing five-year forecasts twice a year.
But the OBR weren’t asked for a forecast by short-lived Prime Minister Liz Truss in 2022 despite their mini-Budget containing an array of tax cuts causing a market meltdown.
While the bonfire of jobs will be welcomed by pro-growth politicians, trade unions have already expressed fury at the move.
Dave Penman, head of the FDA union, 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.”
Mike Clancy, head of the Prospect union, said: “Civil servants in all types of roles help the public and deliver the government’s missions.
“Cutting them will inevitably have an impact that will be noticed by the public.”
What does the Spring Statement mean for Rachel Reeves?
By Ryan Sabey, Deputy Political Editor
RACHEL Reeves is trying shift any blame away from herself and the Labour government as it grapples with the sluggish economy.
The Chancellor is telling MPs that the “world had changed” meaning she has to take drastic action when it comes to spending and welfare.
The trouble for Ms Reeves and Sir Keir Starmer is that they put growth as their “number one” mission and that, to put it mildly, is stalling.
The independent watchdog say growth forecasts has halved for this year and the financial headroom wiped out – hence the savings to be made elsewhere.
But for Ms Reeves all this puts her in a very tight spot insisting she will stick to her iron clad rules – with her looking to find up to £15 billion of savings.
The Tories and commentators are aiming their fire over how she hasn’t helped herself as growth has fallen.
They point out that she was the person who decided to go on a £40 billion tax raid at October’s Budget – with £25 billion of it falling on the shoulders of business.
The upcoming Donald Trump-led tariff war ledcould easily throw the government off course again unless a limited trade deal can be struck.
Rachel Reeves will be pushing every leaver possible to get that over the line before it kicks in next week to give her some breathing space.
But we could be back at square one come the autumn with the Budget to balance the books – with speculation there could be tax rises and Whitehall departments scratching around for more savings.
