Overall departmental administration budgets will be reduced by 16% by 2029-30, today’s Spending Review has confirmed.
The Red Book, which breaks down the SR25 spending commitments, outlines that each government department has also identified at least 5% in total savings and efficiencies by 2028-29, with these funds to be repurposed for core priorities.
The Spending Review document says the admin efficiency drive “will support a rebalancing of day‑to‑day spending away from central government and towards the services that the public rely on”.
Departments have agreed to make the following admin cuts by 2029-20:
- 15%: DBT, DCMS, Defra, DESNZ, DfE, DfT, DHSC, DSIT, DWP, HMT, Home Office, Law Officers’ Departments, MHCLG, MoD, MoJ and the Single Intelligence Account (the funding vehicle for the Secret Intelligence Service, GCHQ and MI5)
- 16%: Cabinet Office
- 17%: FCDO and HMRC
- 25%: small and independent public bodies
As part of the 5% efficiency drive, the Office for Value for Money has worked closely with departments to agree "bespoke technical efficiency targets and delivery plans for day-to-day budgets".
This has identified £13.8bn of annual efficiencies in day-to-day spending by 2028-29, or 4%, according to a Departmental efficiency plans document published alongside the Red Book.
The document says this figure exceeded the initial expectation of £12bn efficiencies by 2028-29, measured against 2025-26 planned day-to-day budgets.
The efficiency document sets out the day-to-day savings that each department has found as part of their commitment to save at least 5% overall, as shown in the table below, and says those departments that have not yet developed plans to deliver 3% efficiencies by 2028-29 "will continue to identify opportunities over the coming period".
| Department |
Planned day-to-day efficiency saving by 2028-29 |
| Health and Social Care |
4.5% |
| Education |
0.8% |
| Home Office |
2.9% |
| Justice |
3.0% |
| Defence |
2.3% |
| Foreign, Commonwealth and Development Office |
4.3% |
| Housing, Communities, and Local Government |
1.2% |
| Culture, Media and Sport |
3.4% |
| Science, Innovation and Technology |
5.6% |
| Transport |
8.0% |
| Energy Security and Net Zero |
8.7% |
| Environment and Rural Affairs |
3.1% |
| Business and Trade |
4.2% |
| Work and Pensions |
3.0% |
| HM Revenue and Customs |
13.1% |
| Cabinet Office |
4.7% |
| Small departments |
5.2% |
The document says many departments have found efficiencies through the use of digital and artificial intelligence; workforce reform and funded exits; and streamlining the government estate.
The Red Book explains that the OvFM’s approach to helping departments to find these savings was guided by three principles:
- Placing greater focus on improving outcomes, not just reducing costs, by clearly distinguishing between technical efficiencies (delivering more output for the same input, or the same output for less input) and stopping activities (reducing outputs).
- Aiming to increase confidence in the deliverability of efficiencies by working with departments to develop bespoke targets underpinned by credible plans
- Supporting greater transparency by publishing departments’ targets and plans, allowing external scrutiny and public accountability.
Official Development Assistance was excluded from the process, given the recent reductions to the UK’s ODA budget to boost defence spending. The document sets out that, following a refresh of the UK’s development offer, the Foreign, Commonwealth and Development Office will work with other departments to explore how best to drive efficiency across the ODA budget.
The Departmental efficiency plans document also confirms that, in line with a recommendation from the OVfM, the government has committed to an expectation of at least 1% technical efficiencies for all departments in all future years. To support this commitment, it says the government will publish bespoke departmental efficiency targets and plans biennially, embedding a culture of continuous improvement backed up by greater confidence in delivery.
Explaining how the Spending Review fits in with the government's plans to reshape the state, the Red Book says the SR has "taken long-term decisions to fundamentally rewire the state" by: using new technology to digitise services and transform how government operates; creating a cost-conscious culture that relentlessly roots out waste, drives efficiency, and protects taxpayers’ money; and stablishing a leaner, higher-skilled civil service that is closer to the communities it serves.