Chancellor Rachel Reeves wants to cut jobs at the Treasury (Image: Getty)
Rachel Reeves is to hand civil servants payouts of up to £100,000 – but only if they agree to quit their jobs, as the Treasury pushes ahead with major job cuts in a sweeping overhaul. The Chancellor aims to axe around 300 roles from the department’s 2,100-strong workforce by 2030, insiders said. The move is part of a broader push to slash admin costs by 16% across Whitehall, with the Treasury leading by example through voluntary departures and a hiring freeze on non-critical posts.
The department, responsible for overseeing public finances and economic strategy, plans to cut its workforce mainly through staff leaving or retiring naturally. But sources warned that compulsory redundancies could follow, if targets are not met at its sites in London, Darlington, Norwich, and Edinburgh. Treasury headcount has ballooned over the last decade, nearly doubling according to the Institute for Government, fuelled by Brexit demands in 2016 and the Covid crisis in 2020.
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The Treasury has a workforce of more than 2,000 (Image: Getty)
A Treasury spokesperson said: “We’re at our biggest ever size, so in this stable period, it’s time to slim down to normal levels via a voluntary scheme, aligning with government-wide efforts.”
The move has sparked discontent among staff in the Treasury, which has higher turnover and lower pay than other departments according to union representatives. Recent exits include two financial services directors: John Owen to consultants EY in September, and Richard Knox to the pensions watchdog.
Robert Eagleton of the FDA union, which represents many Treasury workers, told the Financial Times: “Morale in the Treasury is pretty low. It is one of the lowest-paid government departments and has the highest staff turnover.
“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.”
Rachel Reeves and Prime Minister Sir Keir Starmer (Image: Getty)
The voluntary redundancy program kicked off for London staff last summer, with up to 200 successful applicants learning their package values by late February – keeping the 300-cut goal on pace.
Payouts are based on three weeks’ salary per year served, capped at 15 months’ pay and an £80,000 salary base, so long-timers with 21 or more years could pocket £100,000.
Abe Allen from the PCS union, also representing Treasury employees, said: “You can’t grow an economy without the Treasury officials to guide it, so it would be very misguided for the Chancellor to do any kind of widespread redundancy programme.”
Sir Keir Starmer‘s Government is seeking a leaner civil service without naming exact numbers, but last year’s Treasury mandate demanded at least 16% real-terms admin savings by 2030 via lower headcount, better use of shared services such as IT, and efficiency savings.
There are currently 36 exit schemes operating government-wide, with £300 million earmarked for payouts.
The Cabinet Office coordinates to preserve key expertise amid the trimming.
Cat Little, Cabinet Office top civil servant, told lawmakers last month that 5,000 departures are expected by March’s end through these programs.
Officials admit more voluntary – and possibly forced – redundancies may be required for departments struggling to balance books.
