Thousands of Whitehall jobs will go to save £5.5bn

TENS of thousands of Whitehall jobs are to be slashed as part of an efficiency drive that will save £5.5billion.

The Civil Service is being urged to speed up progress to achieve value for money as the cost-of-living crisis bites and the UK’s debt mountain rises.

More than £3.4billion was saved in 2020-21 through cost-cutting measures and Simon Clarke, Chief Secretary to the Treasury, insisted “we need to go further”.

Shocks

Referencing Covid and war in Ukraine, he told the Institute of Economic Affairs: “The fact we’ve experienced two big shocks in such quick succession…only goes to show we could face another shock at any time meaning we must be diligent in the way we manage public finances.”

He said the Government needs to be “nimbler” and the non-frontline

civil service headcount will be cut to 2019-20 levels by 2024-25.

This means that some 65,000 jobs, or around one in seven civil servants, could be lost.

Mr Clarke also warned of the rising cost of government debt repayments in the face of increasing interest rates.

He confirmed that government debt will this year pass £2.3trillion.

That would represent 95.6 per cent of GDP, the highest level as a percent

age of GDP since the 1960s. Government spending on debt interest is now set to rise 80 per cent this year, with the Government expenditure of £83billion the highest figure on record.

Mr Clarke warned: “A sustained one percentage

point increase in both inflation and interest rates would increase spending on debt interest by £21.1billion in 2026-27.”

Other savings will be made selling or renting out government buildings, new initiatives to counter fraud and improving the government’s financial management processes.