Hundreds of Treasury jobs at risk in civil servant cost-cutting shakeup
Rachel Reeves wants to slash about 300 of her department’s roughly 2,100 staff by 2030, as HM Treasury plans to offer officials up to £100,000 to take voluntary leave.
The proposed cuts to the Treasury are part of a wider drive to reduce Whitehall’s administrative costs by 16 per cent, according to the Financial Times.
The Treasury imposed a freeze on external recruitment for many non-essential roles, aiming to hit its cost-cutting target through voluntary exits and natural attrition.
However, if voluntary departures cannot be achieved across its offices in London, Darlington, Norwich, and Edinburgh, some officials may still be required to be made redundant.
A spokesperson for the Treasury told the FT: “The Treasury is the largest it has been on record, so during this period of stability it’s now right we reduce our size back to more normal levels through a voluntary exit scheme, in line with the whole of government.”
“[The Treasury] is one of the lowest-paid government departments and has the highest staff turnover,” said Robert Eagleton, national officer for the FDA union.
“Our members now face the ongoing uncertainty caused by headcount reductions and recruitment controls. Many are worried about redeployment, the risk of redundancy, and the lack of career progression opportunities,” he added.
Question marks remain over civil service shrinking plan
In September, the Treasury’s director of financial services, John Owen, joined Big Four giant EY as a consulting partner after over two decades in government. This month, Richard Knox, director of financial services (international), will be joining The Pensions Regulator (TPR) as executive director, strategy, policy and analysis.
The Treasury launched its voluntary exit scheme to London-based staff last Summer. This month, as many as 200 people whose applications are accepted will be told the value of their proposed exit packages.
The packages are calculated as three weeks’ pay for each year of service, with a ceiling of 15 months’ pay and a maximum salary of £80,000. For example, someone with over 21 years of service could receive up to £100,000.
The Labour government has said it wants to shrink the civil service, but has not announced a specific headcount reduction target.
At present, 36 voluntary exit schemes are underway across government, with about £300mn set to be spent on these staff departure packages. The Cabinet Office is overseeing the programme to try to ensure that, amid the cuts, crucial skills are not lost.
This comes as Labour also wants to halve government consultancy spending by 2025-26, aiming for £700m in savings by 2028-29.