Voluntary exit schemes underway across government departments ahead of Rachel Reeves' spending cuts

A swathe of government departments have either begun or will start voluntary exit schemes for staff in anticipation of the chancellor’s spending cuts, Sky News can reveal.

Multiple departments, including the Department for Environment and Rural Affairs, the Foreign Office and Cabinet Office have all kickstarted the plans in line with the government’s ambition to reduce bureaucracy and make the state more efficient.

Others, including the Department for Health and Social Care and the Ministry of Housing and Local Government, have yet to start schemes but it is expected they will, with the former already set to lose staff following the shock abolition of NHS England that was announced earlier this month.

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It comes as Rachel Reeves prepares to deliver her spring statement on Wednesday, when she is expected to announce plans to cut civil service running costs by 15% along with further savings.

The move, confirmed by the chancellor on Sunday, could result in 10,000 civil service jobs being axed after numbers ballooned during the pandemic.

Ms Reeves hopes the cuts, which she said will be to “back office jobs” rather than frontline services, will slash more than £2bn from the budget.

Under the plans, civil service departments will first have to reduce administrative budgets by 10%, which is expected to save £1.5bn a year by 2028-29. The following year, the reduction should be 15% – a saving of £2.2bn a year.

The FDA union, which represents civil servants, has said the government needs to be honest about the move and the “impact it will have on public services”.

FDA General Secretary Dave Penman said: “The idea that cuts of this scale can be delivered by cutting HR and comms teams is for the birds.

“This plan will require ministers to be honest with the public and their civil servants about the impact this will have on public services.”

Voluntary exit schemes differ from voluntary redundancy schemes in that they offer departments more flexibility around the terms offered to departing staff.

A Cabinet Office spokesperson told Sky News: “We are reorganising the Cabinet Office so that it becomes more strategic, specialist and smaller.

“This includes implementing a new top-level departmental structure from April 2025 so that the department is effectively set up to support the government and the prime minister’s critical priorities under the plan for change.”

The spokesman added that the voluntary exit scheme, which was launched earlier this year, will reduce the Cabinet Office’s headcount by about 400 roles but that it was not setting a specific target.

They said each application to the scheme would be examined on a case by case basis to ensure “we retain critical skills and experience”.

“Creating more productive and agile state will refocus efforts to deliver security and renewal by kick-starting economic growth to put more money in working people’s pockets, rebuilding the NHS and strengthening our borders,” they said.

“That is why we have set a target of reducing departmental administration costs by 15% over the next five years, which will save over £2bn a year by 2030.

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“Savings from the 15% target will ensure that departments are prioritising frontline delivery, and focusing resources into the services that matter to the public.

“We are also supporting civil servants to be more productive and specialist, with a target for 10% of civil servants to be in specialist digital and data roles by the end of the decade.”

Sky News understands that the voluntary exit scheme opened by Defra is one strategy the department is using to create a more affordable and agile workforce. It has already carried out a resource realignment exercise and is using natural attrition to reduce headcount.

Meanwhile, the Foreign Office’s voluntary exit scheme was launched on 14 November last year. A source said the scheme was started to respond to the challenging fiscal environment and was a key strategic tool in targeting resource where it was most needed to promote British interests overseas.

The cuts form part of a wider government agenda to streamline the civil service and the size of the British state, which Sir Keir Starmer criticised as “weaker than it has ever been”.

Each of the departments named in this article has been approached for comment.

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