Experts have cast doubt on the Chancellor’s plan to make her sums add up by saving billions through ‘technical efficiency gains’, slashing admin spending and clamping down on tax.
The Treasury said it planned to make more use of artificial intelligence, reforming the workforce – including through job cuts – and selling off its London property portfolio.
The plans are forecast to save £13.8 billion a year by 2028/29 – including £9 billion a year from the health and social care budget alone.
At the same time, a drive to recover more owed taxes is predicted to deliver a £7.5 billion annual gain by 2029/30.
And government department administration costs will be culled by 11 per cent by the time of the next election, the Treasury projects – with another huge cut pencilled in for 2026 which will take the savings to 16 per cent, or £2.2 billion.
Raoul Ruparel, a former Downing Street adviser to Theresa May, said the latter were ‘pretty brutal real-terms cuts across the board’.
‘Traditionally, these sorts of cuts are very hard to deliver,’ said Mr Ruparel, who is director of the Boston Consulting Group Centre for Growth.
The plans for efficiency savings rely heavily on making the National Health Service more productive – that is, doing more with less.
Experts have cast doubt on the Chancellor’s plan to make her sums add up by saving billions through ‘technical efficiency gains’, slashing admin spending and clamping down on tax
The Treasury said it planned to make more use of artificial intelligence, reforming the workforce – including through job cuts – and selling off its London property portfolio. Pictured: Rachel Reeves Leaves No. 11 ahead Of Spending Review, London, England, United Kingdom on 11 Jun 2025
They assume annual productivity growth of 2 per cent a year in the NHS, which the Treasury admits would mark a ‘substantial increase’ on improvements achieved in past years.
The productivity plan ‘will deliver efficiencies across all healthcare services, primarily through the combined impact of operational and clinical improvements, technology and digital transformation and workforce initiatives’, the Treasury said.
They will include reducing the use of agency staff and levels of sickness absence.
The Government also plans to relocate more civil servants out of London, cutting the number by 12,000 by 2030.
But at the same time, its ambition to bring in more unpaid taxes will involve hiring more people – with 5,500 compliance and 2,400 debt management staff expected to be brought in.
The closure of 11 central London offices will save £94 million a year by 2032 and the disposal of properties no longer needed will bring in £1 billion, the Government said.
Julian Jessop, economics fellow at the Institute of Economic Affairs think-tank, said: ‘There is huge scope to boost productivity and make efficiency savings in the public sector.
‘It is much less obvious that this Government will be the one to do it.’
Also among the expected savings is the claim that the Ministry of Housing will use AI to speed up routine tasks such as checking errors and note taking.
‘This will reduce demands on staff time by an estimated 500,000 hours per year,’ the Treasury said.
Ms Reeves also announced that she will tear up Treasury rules designed to safeguard value for money in order to pour money into infrastructure projects in the Midlands and the North, where Labour is under threat from Reform.
Regional mayors have railed for years at the Treasury’s so-called ‘Green Book’ rules which direct investment to areas where it will produce the most economic benefit.
Under the new system, the Treasury will limit the use of ‘benefit-cost reviews’ which have been blamed for halting investment in the North.
The new proposals will mean that even projects where the costs outweigh the benefits may not ‘automatically constitute poor value for money’.
