Rachel Reeves is preparing to cut 10,000 civil service jobs as part of a sweeping £2bn Whitehall savings drive, ahead of a spring statement she has warned will involve “hard” choices.
The Labour chancellor has ordered mandarins to slash 15 per cent from departmental administrative budgets by 2029–30 – saving an estimated £2.2bn a year – and pledged the money will be redirected to “frontline” services.
But the plans triggered an immediate backlash from unions, who said public services would suffer after years of underfunding.
“People want to know we’re getting value for money,” Ms Reeves said.
Unions warned of “chaos”, with the general secretary of the Public and Commercial Services Union, Fran Heathcote, accusing ministers of setting “an arbitrary figure for cuts plucked out of the air”. She predicted a backlash from the public “who will be affected by cuts in the services they receive”.
She added: “After 15 years of underfunding, any cuts will have an impact on frontline services. We’ve heard this before under Gordon Brown when cuts were made to backroom staff – and the consequence of that was chaos.”
Mike Clancy, general secretary of the Prospect union, warned ministers against “an arbitrary civil service headcount reduction” and said there must be “a realistic assessment of what the civil service doesn’t do in future as a result of these cuts”.
A Liberal Democrat spokesperson said: “Of course we want to see a more efficient civil service … but saying it won’t make it happen. We now need to see concrete proposals on how they will achieve this. This also isn’t going to help the government grow the economy – we need a proper plan for growth including scrapping the jobs tax and fixing our trading relationship with the EU.”
The job cuts come amid signs Ms Reeves will need billions more in savings to meet her own fiscal rules, as sluggish economic growth and higher-than-expected borrowing limit her options.
She has ruled out tax rises this week, meaning spending cuts are the only route to balance the books.
In an interview with the BBC, Ms Reeves rejected suggestions that Labour would “tax and spend our way to higher living standards and better public services”. She said: “That’s not available in the world we live in today.”
She also hinted Labour could scrap the £1bn-a-year digital services tax – which targets large US tech firms – in a bid to head off the threat of punitive trade tariffs from Donald Trump.
But she was forced to deny Labour’s policies were to blame for the UK’s stagnating growth, and insisted that upcoming tax rises on employers, introduced last year, were necessary.
She said: “Imagine if I’d have swept the problems under the carpet (last year) and said everything was fine, then today, when we face the aggression from Russia, we wouldn’t have the additional money to spend on defence. We would be in a situation where NHS waiting lists would continue.”
Pressed on warnings from the Joseph Rowntree Foundation that living standards will fall before the next election, she rejected the idea the average family would be £1,400 worse off by 2030.
Ms Reeves insisted her cuts would not amount to austerity and defended her decision to take £5bn from welfare payments, despite criticism from within Labour, saying the bill was going “through the roof”. She added: “I do not believe that one in eight young people are incapable of working.”
She told Sky News she was dissatisfied with the economic outlook: “We do need to do more. Growth is the number one mission of this government. We’re turning things around, but it takes hard work and there are no shortcuts to get there.”
Britain’s first female chancellor has insisted the current path is the only responsible one – but faced accusations from her opponents of lacking ambition.
Former Tory cabinet minister Sir Robert Buckland accused Ms Reeves of an “absence of a plan” and called for “bold action”.
