Chancellor Rachel Reeves Confirms 15% Cut in Civil Service Running Costs
Government to Save £2.2 Billion Annually by 2029-30
Chancellor Rachel Reeves has announced plans to cut Civil Service running costs by 15% in a bid to streamline government operations and reallocate resources to frontline services. Speaking on BBC’s Sunday with Laura Kuenssberg, Reeves emphasized that these reductions are both necessary and achievable due to technological advancements and artificial intelligence.
Government Efficiency Drive
“By the end of this Parliament, we are making a commitment to cut the costs of running government by 15%,” Reeves stated. She highlighted that businesses routinely improve efficiency through technology and that the government must follow suit.
“We’re going to cut the back-office functions, the administrative and bureaucracy functions,” she added, noting that the Civil Service expanded significantly during the COVID-19 pandemic and has not returned to pre-pandemic levels.
The proposed cuts are expected to generate annual savings of £2.2 billion by 2029-30. Departments will receive detailed instructions from Chancellor of the Duchy of Lancaster Pat McFadden in the coming week, according to The Telegraph.
Redirecting Resources to Public Services
A Cabinet Office source affirmed the government’s commitment to prioritizing frontline services, stating: “To deliver our Plan for Change, we will reshape the state so it is fit for the future. 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.”
Union Concerns Over Service Delivery
FDA general secretary Dave Penman acknowledged the shift away from crude headcount reductions but warned that back-office and frontline distinctions are not always clear-cut.
“Elected governments are free to decide the size of the Civil Service, but cuts of this scale and speed will inevitably impact what the Civil Service can deliver for ministers and the country,” Penman cautioned.
He called for transparency, urging ministers to clarify which services will be affected: “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 on public services.”
Context and Economic Implications
The announcement aligns with Prime Minister Sir Keir Starmer’s pledge to reshape the “flabby” state and reduce bureaucratic costs. The plan comes ahead of the Chancellor’s spring statement, where Reeves is expected to outline further spending cuts to balance the books following slower-than-anticipated economic growth and higher-than-expected borrowing.
As the government pushes forward with these efficiency savings, the debate continues over the real impact on public services and whether cost reductions can be achieved without affecting essential operations.