Becky Morton
Political journalist
Jacqueline Howard
BBC News
Watch: Rachel Reeves confirms that the Public Service Operating costs plan
The government’s operating costs will be reduced by 15% by the end of the decade, has promised the chancellor.
Rachel Reeves said that BBC savings would be made from back office and administrative roles rather than front -line services.
But the unions have warned that the impact of the cuts would still be felt by the public, while 10,000 jobs should go.
On Wednesday, this is the Chancellor’s spring declaration, when it should announce discounts for certain government services.
This decision is part of an examination of current expenses in all areas of government activity.
During the coming week, Whitehall’s departments will receive a letter from the Minister of the Cabinet Pat McFadden with instructions to save more than 2 billion pounds sterling per year by the end of the decade.
Sectors such as human resources, political advice, communications and offices should be in the shooting line.
Reeves said on the BBC Sunday program with the Laura Kuensberg program that the government wanted to use savings to invest in its priorities, such as the NHS.
She said that the size of the public service had increased “massively” during the covid and had not returned to pre-countryic levels.
“We are, at the end of this Parliament, making a commitment that we will reduce the government’s management costs by 15%,” she said.
Reeves said that the reduction in operating costs by this amount was “more than possible” given technological progress and artificial intelligence.
Pressed on the number of public service jobs, the Chancellor said that the number of Sky News staff could be reduced by around 10,000.
In December 2024, around 547,735 people were employed by the public service according to the National Statistics Office. This includes temporary and occasional employees.
Officials are politically impartial civil servants employed by the government, covering areas, including policies and services such as social benefits and prisons.
Dave Penman, head of the Union of the FDA, who represents senior officials, said that the distinction between the back office and the front line was “artificial”.
“The idea that the cuts of this scale can be delivered by cutting the HR and Comms teams is for birds,” he said.
“This plan will require the ministers to be honest with the public and their civil servants on the impact that this will have on public services.”
Meanwhile, Mike Clancy, head of the perspective union, said: “Officials of all types of roles help the public and deliver government missions.
“Cutting them will inevitably have an impact that will be noticed by the public.”
Earlier this month, the Minister of the Office McFadden promised a “radical” reform of the public service, with a salary linked to performance for senior officials and those who do not meet expectations encouraged to leave their jobs.
And last week, Prime Minister Sir Keir Starmer promised to reshape the “flask” state and “non -shackle” officials of “bureaucracy”.
A disappointing economic growth, higher borrowing costs and lower than expected tax revenue increased pressure on the government to find savings.
Earlier this week, the government has unveiled changes in sweeping in the benefits system, especially to make people more difficult for people to claim disability payments, in order to save 5 billion pounds sterling per year by 2030.
Reeves said that it would not increase government taxes or budgets in its spring declaration next week, telling the BBC this week that “we cannot tax and go to higher and better public service”.
It is limited by self-imposed rules, notably by not borrowing to finance daily expenses and consider debt to lower as a share of British economic production by 2029/30.
Pressed to find out if certain departments would see their budgets reduce, Reeves said: “There will be real increases in public spending each year of this Parliament.”
However, she refused to confirm whether this would apply to unprotected individual departments such as the Ministry of Justice or the Ministry of the Interior, claiming that this would be exposed in the expenditure examination in June.
The chancellor said that each department had been invited to classify their expenses at least at least.
“We want to put more money in things that are the most important things for voters, for citizens and less money on things that are simply not necessary or we should do in a different way,” she added.
Responding to the complaints of some to the left of the Labor Party that the government’s approach was equivalent to a return to conservative austerity, Reeves stressed the 100 billion pounds sterling of additional capital expenditure and 20 billion sterling pounds for the NHS announced in the October budget.
“This is far from what we have seen under conservative governments in the past 14 years,” she added.
Conservative ghost chancellor Mel Stride said that work had left the economy “in a truly vulnerable state”.
He said that BBC’s borrowing costs had increased in part because the financial markets “are nervous in the way the British economy has been managed in the last nine months.”
