Boris Johnson has ordered ministers to slash the size of the Civil Service by a fifth to free up billions for tax cuts.
The Prime Minister used a ‘cost of living’ Cabinet meeting in the Midlands yesterday to order his top team to redouble their efforts to ease the financial pressure on struggling families.
Mr Johnson told the Daily Mail: ‘We have got to cut the cost of government to reduce the cost of living.’
He said the Civil Service had become ‘swollen’ during the pandemic and more than 90,000 jobs had to go.
And he suggested the billions saved could be ploughed into tax cuts, saying: ‘Every pound the Government pre-empts from the taxpayer is money they can spend on their own priorities, on their own lives.’
Ministers were given one month to come up with plans to cut the size of the Civil Service by 91,000 – almost a fifth of the current total.
The move would save about £3.5 billion a year, freeing up resources to help ease the cost of living through tax cuts or other measures.
From L to R: Education Secretary Nadhim Zahawi, International Trade Secretary Anne-Marie Trevelyan, Health Secretary Sajid Javid, Cabinet Secretary Simon Case, Prime Minister Boris Johnson and Chancellor of the Exchequer Rishi Sunak during a regional cabinet meeting at Middleport Pottery in Stoke on Trent on Thursday
Brexit Opportunities and Government Efficiency Secretary Jacob Rees-Mogg arrives to attend the Cabinet meeting on Thursday
A picture from Jacob Rees-Mogg showing an empty ministry office as civil servants continue to work from home
The PM’s chief of staff, Steve Barclay, is also investigating plans to use new technology, including artificial intelligence systems, to improve efficiency at struggling agencies such as the Passport Office and DVLA.
Mr Johnson said the public ‘deserve better’ from organisations which have allowed huge backlogs to build up.
And he remains convinced of the need to get more officials back at their desks, adding: ‘We need to get back into the habit of getting into the office, getting into the workplace.
‘There will be lots of people who disagree with me, but I believe people are more productive, more energetic, more full of ideas, when they are surrounded by other people.’
But the PM said technology also had a major role to play in improving efficiency – and potentially cutting the cost of official documents such as passports. ‘I’m not antediluvian about technology,’ he said.
‘Things like Zoom and Teams can increase productivity, rather than just be an excuse for people to stay at home.
‘We should be asking ourselves, why does it cost so much for a passport? Often it’s because the cost has been jacked up over the years to support the cost of the organisation providing them.
‘What is the chief driver of those costs? Headcount. If we can do more with AI… potentially it could be cheaper.’
The move will put ministers on a collision course with the powerful Civil Service unions, which are already complaining bitterly about a Government drive to persuade thousands of staff to return to their desks after the pandemic.
There were fresh calls yesterday for Rishi Sunak to cut taxes after official figures showed that the economy unexpectedly shrank by 0.1 per cent in March – even before the latest round of energy price hikes last month.
Mr Johnson led a Cabinet meeting on Thursday in which he ordered his top team to redouble their efforts to ease the financial pressure on struggling families
NatWest chairman Sir Howard Davies urged ministers to focus on helping the worst-off households, pointing out that the poorest fifth of the population will have to cut their non-essential spending by 20 per cent.
Meanwhile, Mr Johnson followed Chancellor Mr Sunak in saying he would look at introducing a windfall tax on the profits of energy giants to help struggling families.
BP sought to head off pressure for such a levy by announcing it would reinvest all its profits from North Sea oil and gas over the next decade back into the UK.
The PM’s plan to reduce civil servant numbers comes at a time when ministers are grappling with the so-called Whitehall ‘Blob’ over a range of issues, including Brexit.
A Government source said the Civil Service had become bloated during the pandemic and needed to be cut down.
The source said it was right that the Government makes renewed efforts to tighten its belt in the same way that businesses and families are doing.
‘All businesses are looking at ways they can reduce their costs and increase performance and government should be no different,’ the source said.
‘We have seen the Civil Service headcount rise by 90,000 since 2016. A lot of that was pandemic-related and it was the right thing to do at the time.
‘But we are past the pandemic now and we cannot let this bigger state become the new normal – we need to get back to pre-pandemic levels.
The Prime Minister has said the Civil Service became ‘swollen’ during the pandemic and more than 90,000 jobs had to go
Prime Minister Boris Johnson during a tour of Churchill China Factory in Stoke-on-Trent on Thursday
‘It will help save a substantial amount of money, freeing up resources that could be used to help people with the cost of living.’
The current Civil Service headcount stands at 475,000, the highest level since 2010. Ministers have been given two years to reduce that total by 91,000.
Downing Street declined to put a figure on the estimated savings, but the average civil servant earns £28,100, with other costs such as National Insurance and pensions adding around £10,000 to the wage bill.
Based on these figures, cutting 91,000 jobs would save about £3.5 billion a year.
Government sources said ministers would focus initially on reducing numbers through ‘natural wastage’, such as recruitment freezes.
But Jacob Rees-Mogg warned the Cabinet yesterday that compulsory redundancies may be needed.
He said the cuts would restore the Civil Service to the size it was a decade ago, adding: ‘It has been done before and it can be done again.’
Mr Rees-Mogg, the minister for government efficiency, outlined the plans to the Cabinet yesterday when ministers gathered in Stoke-on-Trent to discuss ways to accelerate action on tackling the cost of living.
He said that on current projections the Civil Service was due to expand over the next three years, ‘despite the requirements of Brexit and the pandemic now receding’.
Ministers were told that 30,000 to 40,000 civil servants leave every year, meaning major reductions could be achieved through recruitment freezes.