Rachel Reeves poised to offer civil servants £100k payout – but only if they quit | Politics | News
Chancellor Rachel Reeves wants to cut jobs at the Treasury (Image: Getty)
Rachel Reeves will give civil servants up to £100,000 in compensation – but only if they agree to quit their jobs, as the Treasury continues major redundancies in a sweeping overhaul. The Chancellor aims to cut around 300 roles from the department’s 2,100-strong workforce by 2030, according to insiders. The move is part of a wider effort across Whitehall to cut admin costs by 16%; The Treasury is leading by example with voluntary redundancies and hiring freezes in non-critical positions.
The ministry, which is responsible for overseeing public finances and economic strategy, plans to reduce its workforce mainly through the departure or natural retirement of staff. However, sources warned that compulsory redundancies could occur if targets are not met at sites in London, Darlington, Norwich and Edinburgh. The number of Treasury employees has ballooned in the last decade; According to the Institute of Government, it has almost doubled due to Brexit demands in 2016 and the impact of the Covid crisis in 2020.
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Treasury has more than 2,000 employees (Image: Getty)
A Treasury spokesman said: “We are at our largest ever size, so in this period of stability it is time to get back to normal levels through a voluntary programme, in line with government-wide efforts.”
According to union representatives, the move sparked discontent among Treasury staff, who have higher turnover and lower wages than other departments. Recent departures include two financial services executives: John Owen to consultants EY in September and Richard Knox to the pensions watchdog.
Robert Eagleton, of the FDA union which represents many Treasury staff, told the Financial Times: “Morale at the Treasury is extremely low. It is one of the lowest-paid government departments and has the highest staff turnover.”
“Our members now face ongoing uncertainty caused by headcount reductions and recruitment controls. Many are concerned about re-hiring, the risk of redundancy and the lack of career progression opportunities.”
Rachel Reeves and Prime Minister Sir Keir Starmer (Image: Getty)
The voluntary redundancy program for London staff began last summer, with up to 200 successful applicants learning their package values by the end of February and meeting the target of 300 cuts.
Payments are based on three weeks’ salary per year of service, limited to 15 months’ pay and a salary base of £80,000; so long-term employees who have worked for 21 or more years could pocket £100,000.
Abe Allen, of the PCS union, which also represents Treasury workers, said: “You can’t grow an economy without Treasury officials guiding it, so it would be very misguided for the Chancellor to undertake any program of widespread redundancies.”
Sir Keir Starmer’s Government is seeking a leaner civil service, without specifying exact figures, but last year’s Treasury guidance called for real-term executive savings of at least 16% by 2030 through lower headcount, better use of shared services such as IT and efficiency savings.
There are currently 36 exit plans operating across government, with £300 million allocated for payments.
The Cabinet Office coordinates the preservation of key expertise during remediation.
Cat Little, the Cabinet Office’s senior civil servant, told MPs last month that 5,000 people were expected to leave through these schemes by the end of March.
Officials acknowledge that more voluntary and possibly mandatory layoffs may be necessary for departments trying to balance the books.
