Rachel Reeves will unveil spending cuts during the Spring Statement on Wednesday, and confirmed on Sunday she plans to cut the administrative running costs of the civil service by 15 per cent by the end of this parliament.
Civil service departments will first have to reduce administrative budgets by 10 per cent, which is expected to save £1.5bn a year by 2028-29.
Despite the cuts to the civil service, the Chancellor told The Sun on Sunday she will not raise taxes.
Fran Heathcote, general secretary of the Public and Commercial Services union, said the Government had chosen an “arbitrary figure for cuts plucked out of the air in order to make it sound like efficiency”.
She said: “After 15 years of underfunding, any cuts will have an impact on frontline services.
“You hear that every day from the public, that they wait too long on the phone when they try to make tax payments, jobseekers rushed through the system in just ten minutes because there aren’t enough staff to see them, victims of crime waiting until 2027 to have their cases heard in the courts as well as the backlog in the asylum system which results in additional hotel costs.”
The 6 cuts Reeves could make in Spring Statement
Foreign affairsAs an unprotected department, the Foreign Office could take a hit to its budget which could affect the number of staff at Britain’s embassies around the world.
EducationWhile some areas of education are set to see significant investment, others will continue to experience financial strain, according to analysis by the Institute for Fiscal Studies.
Welfare and benefitsUnder the Government’s plans to radically overhaul the system, a million people could have their benefits cut, with recipients of Personal Independence Payments (PIP) and Universal Credit (UC) set to be affected.
EnergyThere have been reports that the Government is considering cuts to GB Energy’s £8.3bn funding as part of its upcoming spending review, potentially reducing £3.3bn earmarked for local authority renewable projects.
TransportThe upcoming spending review could significantly impact transport funding, especially for local buses and major rail projects.
EnvironmentThe Government made the surprise move this month to announce it was pausing applications to the Sustainable Farming Incentive (SFI) — a funding scheme designed to reward farmers for adopting nature-friendly practices.
By Eleanor Langford
Heathcote added: “The impact of making cuts will not only disadvantage our members but the public we serve and the services they rely on.
“If the last government taught us anything it’s that you can’t cut your way to growth.”
Dave Penman, the general secretary of the FDA union, said the proposed cuts were equivalent to about 10 per cent of the entire salary budget for the Civil Service.
“The budgets being cut will, for many departments, involve the majority of their staff.
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“This plan will require ministers to be honest with the public and their civil servants about the impact this will have on public services.”
He said: “The Chancellor has talked about undertaking a zero based review of spending, this must include a realistic assessment of what the civil service doesn’t do in future as a result of these cuts.
“As a union Prospect will engage with ministers on civil service reform but this must involve detailed discussion on workforce plans across government, and a proper recognition of the unique specialist, digital, technical and scientific skills our members bring to government.”
The economy grew just 0.1 per cent in January, and the Office for Budget Responsibility is expected to cut its growth forecasts in half when it issues its report alongside the spring statement on Wednesday.
The Prime Minister’s announcement that defence spending will rise to 2.5 per cent of GDP in April 2027 has already meant cuts to the UK overseas aid budget, with more announcements expected to come.
Unpopular Reeves to face her hardest week in politics
Cuts to benefits worth £5bn were announced last week fuelled reports of Cabinet infighting and dire threats from Labour MPs aghast at the idea of slashing benefits for the poor and disabled.
But a poll this week found she is the least popular Cabinet minister among Labour members – Kendall was second – highlighting the way Reeves has become a lightning rod for internal dissent.
The Chancellor has ruled out raising taxes again, The i Paper understands – meaning the only way to cut borrowing will be to lay out cuts to public spending, likely to involve a reduction in the future path of spending growth available to Whitehall departments as a whole.
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