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Chancellor George Osborne swung the axe at 350 staff in his Treasury fiefdom today as ministers began the brutal task of completing the public spending round.
Mr Osborne made a point of “leading by example” when he convened the first formal meetings of a “star chamber” of senior ministers who will intervene on disputes over the severity of cuts.
He aims to chop a quarter of the Treasury workforce, reducing staff from about 1,350 to 1,000 in three years by natural wastage rather than redundancies. At the same time, Mr Osborne wants to reverse what he regarded as “empire building” under Gordon Brown that extended the Treasury's activities into other Whitehall departments.
Mr Osborne is even asking his staff to sit at smaller desks so more people can be squeezed into his HQ, saving rents.
The Chancellor's willingness to lock in spending reductions in his own building is designed to strengthen his hand in negotiations with other government departments, which reach the final formal stages this week.
Mr Osborne's star chamber will sit in judgment on ministers who claim they cannot find cuts without causing excessive damage to services or to the Government's political fortunes.
Its core membership will be Mr Osborne, Treasury Chief Secretary Danny Alexander, Foreign Secretary William Hague, policy chief Oliver Letwin and delivery minister Francis Maude.
But the Chancellor will let those who reach quick settlements join the committee. Among those eager to help make decisions is said to be former chancellor Kenneth Clarke. Environment Secretary Caroline Spelman and Jeremy Hunt, the Culture Secretary, are also said to be close to settlements. Mr Hunt has offered to quit his headquarters in Trafalgar Square and move to cheaper offices.
Defence Secretary Liam Fox is expected to announce this autumn that Britain and France will share a new aircraft carrier to save money. But the MoD is locked in a battle over the cost of renewing Trident.
Spending cuts of 25 per cent to 40 per cent are being demanded by Mr Osborne from every department except health and overseas aid. A comprehensive settlement will be announced on October 20. A Treasury source told the Standard that the Treasury's internal cuts were in line with its demand for a third of administration costs to be pared back.
Smaller desks were already in use by most staff to make extra space, said the source. “This is typical of the sort of savings that we are looking for in other departments,” he added.
The slimmed-down Treasury will “focus on core responsibilities” such as the economy and public spending totals rather than try to dominate or second-guess other departments.
KEY BATTLEGROUNDS
Defence
The £20 billion Trident renewal has caused a big rift. George Osborne wants the cost to go on the military budget, which would create competition for resources between the nuclear deterrent and regular troops. Defence Secretary Liam Fox wants Trident ringfenced instead.
Welfare
Iain Duncan Smith, the Work and Pensions Secretary, accused the Treasury of “disrespect” and of blocking major reforms to the benefits system. The Treasury responded by insisting he pay for his plans by finding more savings, on top of big cuts in housing benefit.
Transport
Mayor Boris Johnson is locked in a battle with Transport Secretary Philip Hammond to protect Tube upgrades, Crossrail and other infrastructure. He is under pressure to cut the £1 billion spent on free travel for children, injured war veterans and the unemployed.
Councils and Quangos
Town halls fear they will have to find big savings. Environment Secretary Caroline Spelman has pleased the Treasury with plans to cut or scrap quangos and reduce grants to schemes such as the coastal path.
Reader views (21)
Its hidden agenda,theses useless MPs do nothing all day.except take money from the tax payer.Tories are a law unto themselves and if you think anythink different you are either stupid,or mega rich.England is the tory enterprise and its people being used to line their pockets.They play people off against each other,with their tory propaganda and spin.The poor are the scapegoats,Their nothing but fat whitchy grubs chewing their way through the mass,just getting bigger and bigger resulting in a huge devide between rich and poor.This is not a democratic government,as there is no representation of the lower orders,and that is WRONG.THEY SHOULD BE TRIED FOR BREACH OF PROMISE.
- hench, essex, 10/11/2010 16:46
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I bet Treasury staff wont be clapping him like they used to do to Gordon Brown!!!
Anyway all this will mean is more agency staff will be employed as as they are on a different vote sub head they wont be counted as working for the treasury. They may even cost more than civil servants to employ but whose counting?
- Melvyn Windebank, Canvey Island, Essex, 01/09/2010 14:10
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I can see why he needs to save money, that picture tells me he wants a new briefcase.....you can get specials at Marks and Spencer...on full Moroccan leather briefcases....he could find red.
- Richard Merrell, Wentworth Falls, NSW Australia, 01/09/2010 05:03
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What are they doing with the old, BIG desks?? Going Green and recycling them somehow? What a load of tosh! NEW, Smaller desks for even smaller minds!
- Retiredscot, Illinois, USA, 01/09/2010 00:12
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This headline is so mis-leading, he's not firing anyone, it's going to be natural wastage over 3 years. Where does he think that will come from? No-one is going to be moving jobs in the current climate?
- EC, Ashford Kent, 31/08/2010 22:26
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This article basically reads like a Tory party press release. Given the cuts are coming from "natural wastage" it would be more accurate to use the headline "George Osborne shows how to get good coverage in the newspapers by firing 0 Treasury staff"
- James, London, 31/08/2010 22:24
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There's got to be a catch here somewhere, neither Osborne or any other minister has the nerve to dispose of their underlings.
- stuart, chesterfield,derbyshire, 31/08/2010 22:20
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George Osbourne is a truely great man
- Frank, Home Counties, UK, 31/08/2010 18:00
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Will these 350 not now join the army of unemployed , drawing social benefits for them and their families. Stupid. A political gimic that should fool no one. If they were surplus to requirements in the Treasury they could surely have replaced retires in another sector of public service ?
- chrism, morbihan,france, 31/08/2010 17:53
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Note to Osborne - if you get the staff to sit at smaller desks to reduce rent, you need to pay for smaller desks to replace the larger ones - money well spent?
- Jon B, London, 31/08/2010 17:26
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I'm not sure how the changes affect the disadvantaged and you hope this is not as dire as it reads. What I can't get past is, if the changes advantage childless couples, then why is this such a bad thing. Shouldn't couples waiting for a better deal before planing their families, also feel, that they too could possibly start their families if wanting to do so, and in some near future? I have have gone off the point, also, not taking away from the possibility that the changes may not be helping the disadvantaged somehow. But if helping childless couples who are, perhaps, waiting for improved finances before doing so then this can only be good, no.
- M, London, 31/08/2010 17:22
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ABSOLUTELY PATHETIC.. As always the private sector, and those with a cast iron claim against the government like Equitable life pensioners who have lost thousands, but may receive a few hundred if they are not dead, who will carry the burden.
- alan., England, 31/08/2010 16:43
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"All these cuts are through natural wastage", that goes for every govt department. Which means to reduce by 25% would prob take 10-25 years. No government department has made any compulsory redundancies yet, they havent the gall, the competence or the will to do it the other way due to the Unions and red tape....
- DC, Ealing, 31/08/2010 15:31
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When will someone rationalise (i.e. cut)the number of MPs that we have?
Then cuts should be made to the pensions of the remainder.
Have a look at what the Speaker of the House gets.
This is an absolutely disgraceful gravy train.
- David Ambler, London, 31/08/2010 14:48
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I attended a meeting several years ago at was the DTI (now Dept for Business) in Victoria Street. During a break, the question was asked about the number of staff employed. The answer was astonishing - 12,000! What do these people do all day?
- Neil Simmonds, London, 31/08/2010 14:43
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3500 would make more sense given the use they are now.
- Anglo, Sussex England, 31/08/2010 14:26
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We have seen the cuts in quango's are now being revised, and will 350 losing their jobs over 3 years given the size of the Treasury really make any ruddy difference? and how big were these guys desks in the first place. As Ian Duncan-Smth has said to make the economies you have to spend first. With a month to go its looking like the smae old rhetoric coming out of the Treasury just with a blue banner on it.
If the October statement is not magical, and nothing short of sheer genius we had all better prepare or a rotten winter.
- Robert Marshall, London, 31/08/2010 14:14
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@-R.F.York, Yorks, UK: "We still have 645 (MPs) all seemingly determined to continue thieving from the public purse".
Pigs never change their spots. Lol!
- Reuben Camara, Plot 1, Morecambe Compound, UKSSR, 31/08/2010 14:13
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All laws are not laid down by Brussels.
And unfortunately, an MP typically receives over 200 emails and letters a day. So tell people to stop contacting their MP, as though Parliament is a branch of social services, and then maybe we can cut their numbers.
- Jay, London, 31/08/2010 13:59
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They said they would cut the number of MPs,but this has not happened.We could survive with a 25% cut in MP numbers,as they are the do nothings in the running of our country
- dave, london, 31/08/2010 12:57
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We were promised in the run up to the election that the number of MPs would be reduced, yet we still have 645 all seemingly determined to continue thieving from the public purse. As all laws are laid down in Brussels there needs to be at lease a 60% reduction in the number in Westminster. The jobs are, at best, only part-time and by no stretch of the imagination can they be described as "onorous". Will the conservatives honour their election promise and "cut this gravy train down to size"?
- R.F.York, Yorks, UK, 31/08/2010 12:44
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