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According to union leaders, Rachel Reeves’ proposed £2bn reduction in government department budgets has ignited fears of widespread disruptions, from strained jobcentres and overwhelmed HMRC phone lines to delays in tackling the asylum backlog.
On Sunday, the chancellor confirmed plans to slash 15% in administrative costs across Whitehall—a move expected to eliminate around 10,000 civil service jobs by the decade’s end. While she emphasized this figure wasn’t a set target, the consequences of such cuts remain a pressing concern.
With her spring statement looming, Reeves faces mounting pressure to maintain fiscal discipline without resorting to tax hikes or increased borrowing. Yet, the Public and Commercial Services Union (PCS) has issued a stark warning. After 15 years of Conservative-led austerity, further reductions could push essential services to the brink.
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.
Defending her economic strategy, Reeves maintained that her approach prioritizes growth over excessive taxation, pointing to the UK’s sluggish 0.1% economic expansion in January. However, with the Office for Budget Responsibility lowering its growth projection to 1% for the year, questions linger about the feasibility of her fiscal roadmap.
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.”
While some departments brace for cuts, the government has pledged £4.8bn for roads and highways in 2025-26, including a £1.6bn pothole repair fund. Notably, councils must now report the number of potholes filled before receiving full funding, with up to 25% of funds withheld for non-compliance—a move critics call micromanagement at its worst.
Despite an overall increase in public spending—driven by significant boosts for defence and the NHS—many departments face budget reductions 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.”
At the same time, Reeves and Keir Starmer must navigate internal Labour discontent over a £5bn welfare spending reduction, with backbenchers and unions voicing opposition.
The Joseph Rowntree Foundation’s grim forecast that all UK families will be financially worse off by 2030, with the poorest hit hardest, has only fueled tensions. Reeves, however, disputed the report’s findings, insisting that living standards will rise under her economic stewardship.
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 expressed confidence in UK trade negotiators, dismissing concerns over potential US tariffs under a second Trump administration. Meanwhile, she was on the defensive over a Sabrina Carpenter concert controversy after accepting free tickets due to security concerns. The incident echoes last year’s backlash against Starmer’s "freebies", sparking renewed debate over politicians and privilege.
“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.”
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