Cut 68,500 civil-service jobs: calculation note

Central fiscal result

-£3.0bn - Net fiscal impact in 2027-28

Low case: -£6.0bn. High case: +£2.0bn. Positive numbers are fiscal costs or borrowing pressure. Negative numbers are Exchequer savings or receipts.

Scenario and baseline

• Civil-service FTE is reduced by 68,500 roles.
• Bonus, pension and office reforms are noted but not fully costed.
• Frontline public-sector roles outside civil service are excluded.
• Consultancy backfill is included as a risk.

Affected population

• Affected units are civil-service FTE roles and departments.
• Civil Service Statistics show 516,150 FTE in March 2025.
• Policy, HR and communications roles are reportedly targeted.
• Service users face possible delays or errors.

Gross impact

• Average fully loaded saving is assumed near £70,000 per removed FTE.
• 68,500 roles imply mechanical savings near £4.8bn.
• Central net saving is £3bn after transition costs.
• High case becomes a cost if backfill dominates.

Fiscal build-up, central case

• Payroll and pension savings: -£4.8bn
• Redundancy and transition costs: +£1.2bn
• Consultant and contractor backfill: +£0.6bn
• Bonus increase and reform costs: +£0.0bn

Central net impact: -£3.0bn in 2027-28.

Behaviour and pass-through

• Low case assumes roles are genuinely redundant and not backfilled.
• Central case assumes material redundancy and contractor costs.
• High case assumes service failure and backfill erase savings.
• Productivity gains require process redesign, not headcount cuts alone.

Phasing

• 2026-27: -£0.5bn. Preparation or partial implementation.
• 2027-28: -£3.0bn. Main scenario year.
• 2028-29: -£4.0bn. Behaviour and pass-through develop.
• 2029-30: -£4.5bn. Steady-state uncertainty persists.

Main source groups

• Auerbach and Gorodnichenko, "Measuring the Output Responses to Fiscal Policy" (American Economic Journal: Economic Policy, 2012): Government-spending multipliers vary materially with the state of the economy; supports output-risk caution for large public-employment cuts.
• Ramey, "Identifying Government Spending Shocks" (Quarterly Journal of Economics, 2011): Narrative evidence suggests government spending shocks can crowd out some private activity and have moderate multipliers; informs the GDP range around spending cuts.
• Office for Budget Responsibility, "A brief guide to the public finances" (2026): The OBR expects public receipts of about £1,235bn in 2025-26; scale check for large packages.
• Reform UK, "Our Contract with You" (2024): The Contract claims large savings from departments, QE reserves, aid, welfare and net zero; defines scenarios but needs caution.
• Cabinet Office, "Civil Service Statistics 2025" (2025): Used to size the affected population, baseline economic quantities and sectoral exposure.
• Reform UK, "Our Policies" (2026): Used to define the pledge wording, policy scope and implementation scenario being modelled.