(Bloomberg) — The UK will aim to slash the number of civil servants by 10,000 as it targets a 15% reduction in the government’s operating costs, Chancellor of the Exchequer Rachel Reeves said ahead of Wednesday’s key statement on the public finances.
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The Labour government will stick with its plan to lift real-term spending in every year of this parliament, but prioritize where the money is allocated, with departments expected to make efficiency savings through better use of technology such as artificial intelligence, Reeves said.
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“I’m confident we can reduce civil servant numbers by 10,000,” the chancellor told Sky News in a Sunday morning interview. “During Covid there were big increases in the number of people working in the civil service; that was the right thing to do to respond to those challenges, but it’s not right that we just keep those numbers there forever.”
When asked for examples where technology could be used to help reduce the size of the civil service that had numbered over 540,000 last year, Reeves listed briefing roles and said the UK’s tax collecting office was already using AI to reduce fraud. Speaking to the BBC, the chancellor also confirmed newspaper reports that said Labour would ask the civil service to slash their administrative budgets by 15%, which represents £2 billion ($2.6 billion) worth of cuts by 2030.
Reeves will deliver her spring statement on Wednesday alongside updated forecasts for the economy produced by the Office for Budget Responsibility. The headroom that allows the chancellor to meet her own fiscal rules has been wiped out since her Oct. 30 budget, due to weak growth and high borrowing costs. She is expected to cut plans for government spending and welfare in order to rebuild the headroom, having promised to avoid further tax rises.
The plans, which include £5 billion savings that the government has already earmarked from welfare benefits, are likely to come under criticism from hostile opposition MPs and skepticism from some of the party’s own backbenchers.
Shadow Chancellor Mel Stride on Sunday blamed Labour for not having “gripped” the economy, saying that major announcements will have to be made on Wednesday.
