Reeves tells departments to find billions of pounds in savings ahead of Budget

Health and Education departments among those asked to make big savings ahead of October budget, according to reports
Aerial view of Whitehall. Photo: A.P.S. (UK)/Alamy

By Tevye Markson

29 Aug 2024

Several departments have been asked to come up with savings totaling billions of pounds ahead of October’s budget, according to reports.

The chancellor, Rachel Reeves, last month asked departments to cut 2% from their "back-office costs", cut out non-essential comms and stop non-essential spending on consulting, totalling around £3.1bn.

Reeves has now set out savings targets for individual departments, according to The Times. It reports that the Department of Health and Social Care has been asked to find around £1.3bn worth of savings in advance of the Budget, while others, including the Department for Education, have been asked to find around £1bn in cuts. Other departments have reportedly been asked to come up with ideas for millions of pounds in savings.

Redundancies and ­hiring freezes are also under consideration, according to the newspaper.

The instruction comes after prime minister Keir Starmer warned this week that the upcoming budget would be would be "painful”, asking the country to “accept short-term pain for long-term good”.

And Reeves said yesterday that she would be making “difficult decisions in a range of areas” to address a purported £22bn black hole in public finances. She also reiterated that current public spending levels are “not sustainable”.  

The government also thought to be considering new tax rises. Asked about potential tax hikes on a visit to Scotland yesterday, Reeves told reporters: “The UK economy is just emerging from the recession that we entered into last year, and two quarters of positive economic growth is not going to reverse more than a decade of economic stagnation.

“Much work is needed to rebuild the foundations of our economy so we can rebuild Britain and make working people better off, and that is why growing our economy is absolutely essential.

“Unless we grow the economy, we’re going to continue to be in a situation where taxes are at too high a level and public spending is not sustainable.

“We’ve got to break out of this doom loop, which is why growing the economy is the number one priority of this new government.”

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