UK Government Departments Ordered to Find 5% in Efficiency Savings, Says Finance Minister

UK Finance Minister Rachel Reeves insisted on Tuesday that government departments must find efficiency savings of five percent, vowing to take an “iron fist” approach to eliminating public-spending waste.

Reeves’ comments followed Prime Minister Keir Starmer’s announcement of a review of public spending, with results expected in June. This review comes as the Labour government faces difficult financial decisions to achieve its economic growth targets.

“I am confident we can find five percent in efficiency savings within government spending, and I am determined to make it happen,” Reeves stated during a visit to a hospital. “Every single pound the government spends will undergo a line-by-line review.”

A team of external experts will assess government budgets, and difficult decisions may follow if spending does not align with the government’s priority areas, according to a statement from the Treasury. Key priorities include boosting economic growth, reforming the National Health Service, and positioning the UK as a leader in clean energy.

Reeves warned that government departments “cannot operate as usual” when reviewing their budgets for the coming years. “If spending is not contributing to a priority, it should be stopped,” the Treasury added.

This push for efficiency is part of the Labour government’s broader plans, including increased borrowing for investment and raising taxes by £40 billion ($51 billion) as outlined in the October budget. Reeves argued that these steps are crucial to repairing UK public finances and revitalizing public services, which have been neglected during 14 years of Conservative rule, which she criticized for funding wasteful projects.

“Tackling public finances means taking an iron fist to waste,” Reeves concluded.