Rachel Reeves’s planned cuts of £2bn to government departments will hit frontline services from jobcentres to HMRC phone lines and efforts to cut the asylum backlog, a union has said.
On Sunday the chancellor confirmed plans to seek a 15% reduction in admin costs across Whitehall, amounting to about £2bn a year, by the end of the decade. She said this would also result in about 10,000 job losses in the civil service, although this was not a target.
As she prepares to give her spring statement on Wednesday, Reeves is under pressure to balance the books in line with her fiscal rules, meaning some departments are in line for spending cuts to avoid more tax rises or higher borrowing.
But the Public and Commercial Services Union (PCS) warned her that there would be consequences for public services after 15 years of underfunding by the Tories.
Fran Heathcote, the general secretary of the PCS, said: “You hear that every day from the public, that they wait too long on the phone when they try to make tax payments, jobseekers rushed through the system in just 10 minutes because there aren’t enough staff to see them, victims of crime waiting until 2027 to have their cases heard in the courts as well as the backlog in the asylum system which results in additional hotel costs.
“The impact of making cuts will not only disadvantage our members but the public we serve and the services they rely on. We’ve heard this before under Gordon Brown when cuts were made to backroom staff and [the] consequences of that were chaos.”
The government should have learned its lesson that “you can’t cut your way to growth”, Heathcote added.
Reeves issued a defence of her economic plans on Sunday, saying her strategy was aimed at growth. The economy grew by just 0.1% in January, and the Office for Budget Responsibility is believed to have downgraded its forecasts to 1% for the year.
The chancellor said she was “not satisfied with the numbers that we see at the moment”, but told Sky News: “It’s not possible within just a few months to reverse more than a decade of economic stagnation, but we are making the changes necessary to get Britain building again, to bring money into the economy.”
She said she would stick to her fiscal rules and not raise further taxes, but said there would be cuts within central government to help her stick to her spending limits.
The spending review has already been overshadowed by where cuts are due to fall within the government. Although overall spending will increase each year, with big rises for defence and the NHS, other departments have been asked to model cuts of up to 11%.
With maintaining security likely to be the big theme of the spring statement, Reeves told BBC One’s Sunday with Laura Kuenssberg: “The world has changed and that is having an impact on growth; you can see that in every country … but do we need to go further and faster in increasing growth? Yes, we do.”
Reeves and Keir Starmer are also facing the prospect of a Labour rebellion over plans to reduce welfare costs by £5bn, with unhappiness on the backbenches and also among unions about the proposed spending cuts.
Asked about a grim forecast from the Joseph Rowntree Foundation that all UK families would be worse off by 2030, with the poor bearing the brunt, Reeves disputed the findings and said living standards would rise.
She told Sky News’ Sunday Morning with Trevor Phillips: “I reject that and the Office for Budget Responsibility will set out their forecast this week.
“Living standards in the last parliament were the worst ever on record. I’m confident that we will see living standards increase during the course of this parliament. What we’ve already seen in these last few months of the Labour government is a sustained increase in living standards.”
Reeves was also optimistic about the prospect of avoiding US tariffs from the Trump administration, saying she was confident in the ability of the UK’s trade negotiators to strike a deal.
The chancellor was also pressed over having accepted free tickets to a Sabrina Carpenter concert with a family member, despite the row over Starmer’s acceptance of “freebies” last year.
She said it had not been possible to pay for the tickets offered as hospitality and she had accepted them because her security needs made it difficult to sit in general seating.
“Look, I took those tickets to go with a member of my family,” Reeves said. “I thought that was the right thing to do from a security perspective.”
The chancellor later added: “These weren’t tickets that you could pay for, so there wasn’t a price for those tickets. Obviously, I’ll declare the value of them but they weren’t tickets that you were able to buy.”
