UK Finance Minister Announces 15% Reduction in Government Operational Costs

 UK Finance Minister Rachel Reeves has unveiled a comprehensive plan to reduce the government’s operational expenses by 15% over the next four years, aiming to save approximately £2.2 billion annually. This initiative is part of a broader strategy to address the nation’s strained public finances and improve economic stability. ​

Central to this cost-reduction plan is a significant restructuring of the civil service. The government intends to cut around 10,000 civil service jobs, reducing administrative budgets by 10% by the 2028-29 fiscal year, with a further target of a 15% reduction by 2029-30. These measures are expected to save over £2 billion annually by the end of the current parliamentary term. ​

Despite these substantial cuts, Minister Reeves has emphasized that the government will adhere to its fiscal rules without resorting to additional taxation. She has also hinted at the possibility of abolishing the £1 billion-a-year digital services tax to facilitate trade negotiations with the United States and avoid potential tariffs. ​

However, these proposed cuts have sparked criticism, particularly concerning plans to save £5 billion on welfare by reducing disability benefits. This aspect of the plan has faced opposition from Labour backbenchers and unions, who express concerns over the potential impact on vulnerable populations. ​

While defense and the National Health Service (NHS) are slated for increased funding, other government departments could experience budget reductions of up to 11%. Minister Reeves remains optimistic about improving living standards during the current parliamentary term and is hopeful about averting US-imposed trade tariffs. ​