RACHEL Reeves is set to announce £1.5 billion in cuts to the civil service budget this week in a bid to meet her own self-imposed borrowing rules, it has been reported.
The chancellor is reportedly expected to use her spring statement on Wednesday to reveal her plans for a 10% reduction in the “administration budgets” for civil service departments.
According to The Times the roles which face spending slashing include those in human resources, communications and policy, but not those in frontline services such as prisons.
Reaves reportedly aims to save £1.5 billion by 2028-29, which will equate to almost 10% of the civil service’s entire £16.6 billion annual salary bill.
The chancellor has been widely criticised for her proposal to cut spending, which includes around £5bn in cuts to welfare, to meet the borrowing rules she set herself at her first budget in October amid disappointing growth figures.
It has been reported that the Office for Budget Responsibility (OBR) will announce in its verdict on the government’s balance sheet in the coming days, it will halve its growth predictions from 2% to 1%.
It will also reportedly show that the UK Government will be £4.5bn in the red and that the £9.9bn of “headroom” Reeves built into her plans has evaporated.
Reeves is expected to use her speech to argue that the £5bn of welfare cuts outlined last week, which opposition parties have said is a return to austerity under the Labour government, will cover the shortfall.
However, the plans have been heavily criticised with ex-Labour leader Jeremy Corbyn saying the cuts represent an “act of cruelty” by the UK Government, accusing the party of going beyond austerity previously imposed by the Tories.
Meanwhile, the SNP have accused Labour of breaking an election promise by imposing the welfare cuts after pledging not to return to austerity.
A Treasury source told The Times: “She’s taken the choice to restore headroom. It’s a message to the market that we are in control of the public finances.”
A former Downing Street aide who advises business leaders also told The Times: “She’s told people in the Treasury that she needs the same headroom as before, which is £10 billion.”
Earlier this month, Pat McFadden, Keir Starmer’s Cabinet Office supremo, announced plans to make it easier to sack failing civil servants.
He signalled that the current workforce of around 500,000 full-time employees will be reduced with reports previously suggesting that about 10,000 civil service jobs could be axed.
It has been reported that the savings in civil service wage bills would be directed towards frontline services, including teachers, policing and social care services.
