Prime Minister Sir Keir Starmer has urged government departments to improve efficiency through artificial intelligence and technology, ahead of the upcoming Spring Statement.

His comments come as Chancellor Rachel Reeves confirmed plans to cut 15% from Civil Service budgets. While some Labour MPs are uneasy about the scale of these cuts, the government insists the reductions will target administrative costs, not front-line services.

The proposed budget cuts follow a series of welfare reforms aimed at saving £5 billion annually by 2030. In a recent interview, Transport Secretary Heidi Alexander rejected suggestions that the government is reverting to austerity. She pointed to October’s budget, which saw a £20 billion boost to NHS funding and was labelled by the Office for Budget Responsibility as one of the most expansionist ever.

“We are taking difficult decisions,” Alexander said on BBC Radio 4’s Today programme. “But we remain committed to a welfare system that protects the most vulnerable.”

Rachel Reeves has also announced the end of universal winter fuel payments, which will now be reserved for the lowest-income pensioners. She emphasized that the savings will come from streamlining operations rather than reducing vital public services.

Last month, the government also reallocated funds from the foreign aid budget to increase defence spending, aiming to reach 2.5% of national income by 2027 amid growing concerns about European security.

Speaking on BBC Radio 5 Live, Starmer said the government must hold itself to the same standards it expects of the private sector. “We're asking businesses to be more efficient, adopt AI and modern tech—government should do the same,” he said. “We’ll be looking at ways to cut costs without compromising service.”

However, Civil Service unions remain concerned. Fran Heathcote, general secretary of the Public and Commercial Services union, warned that reducing back-office staff could risk disrupting essential services. “We’ve seen this before—Gordon Brown tried it, and it led to chaos,” she said.

As the Spring Statement approaches, all eyes are on how the government will balance its reform ambitions with public service demands. Photo by mikemacmarketing, Wikimedia commons.