The Ministry of Justice will have to find hundreds of millions of pounds in ‘savings’ as part of a crackdown on ‘wasteful’ spending across Whitehall, it emerged today.
Launching the second part of her spending review, chancellor Rachel Reeves said government departments will be asked to identify 5% ’efficiency’ and productivity savings when setting their budgets for 2026-27 to 2028-29.
The savings will reportedly need to be found from day-to-day spending (known as the Resource Departmental Expenditure Limit). At Justice, RDEL spending will climb from £10.4bn in 2023-24 to £11bn this year, rising to £11.8bn in 2025-26, the chancellor announced in her October budget.
This amounts to average annual real-terms growth of 4.3% from 2023-24 to 2025-26, according to Reeves’ budget report. However, with more than half of the money allocated to prisons, today’s announcement will spark fears of further deep cuts to spending in other areas after 2026.
The MoJ’s day-to-day spending is expected to total over £35bn between 2026 and 2029, which suggests the department will need to identify and make ‘savings’ exceeding £1.5bn over that period.
The chancellor said she will conduct a ’zero-based review’ of public spending, which will require departments to go through their budgets line by line. ‘Challenge panels’ of external experts, including former executives from Lloyds and Barclays banks, will review departmental plans.
The chancellor said: ’By totally rewiring how the government spends money we will be able to deliver our plan for change and focus on what matters for working people. The previous government allowed millions of pounds of taxpayers’ money to go to waste on poor-value-for-money projects. We will not tolerate it. I said I would have an iron grip on the public finances and that means taking an iron fist against waste.’
The Treasury has also written to independent pay review bodies cautioning them against offering above-inflation pay rises.
