In a move aimed at curbing public spending, Chancellor of the Exchequer Rachel Reeves has outlined plans to reduce the cost of running government by 15% over the next four years. Speaking on BBC and Sky News ahead of her crucial Spring Statement, Reeves indicated that these savings estimated at around £2.2bn annually will be achieved in part by cutting approximately 10,000 civil service jobs.
Reeves emphasized that the focus will be on trimming non-essential back-office roles, arguing that front-line positions in schools, hospitals, and the police should remain unaffected. "I would rather have people working on the front line than in back-office roles," she said, stressing the need to optimize government operations without compromising critical services.
The cost-cutting initiative comes amid concerns over persistent fiscal pressures and a slowdown in economic growth. Reeves reiterated her commitment to maintaining strict fiscal rules specifically, that the government will not borrow to fund day-to-day spending and will aim to reduce the debt-to-GDP ratio by 2029-2030. These measures are seen as necessary to restore confidence in Britain’s public finances, especially as the economy has contracted slightly and trade tensions, particularly with the US, continue to pose challenges.
Additionally, the government recently announced further spending cuts in disability welfare payments, aiming to save more than £5bn annually by the end of the decade. Reeves' announcement signals a broader re-prioritization of public spending, with plans to focus resources on defense and infrastructure amid growing global uncertainties.
Reeves also mentioned ongoing discussions with US counterparts regarding tariff issues and the Digital Services Tax on major tech companies, reiterating that the UK would maintain its stance that companies should pay taxes in the country where they operate.
As the Chancellor prepares to deliver her Spring Statement on March 26, all eyes will be on the unfolding impact of these austerity measures and whether they can help stabilize the economy while safeguarding essential public services.
