UK's Reeves to set out 2 billion pounds civil service spending cuts

LONDON (Reuters) -British finance minister Rachel Reeves is eyeing spending cuts for government officials who work in departments to the value of over 2 billion pounds ($2.58 billion) a year by 2029-30, a cabinet office source said on Saturday.

Reeves will likely announce belt-tightening measures to get back on track to meet her fiscal rules next Wednesday when she delivers a half-yearly budget update speech alongside fresh economic and public finance forecasts from Britain's fiscal watchdog.

She is expected to reduce the administration budgets for the civil service by 10% by 2028-29, with a target to reduce them by 15% by 2029-30, saving over 2 billion pounds a year by the end of parliament, the cabinet source said.

"To deliver our Plan for Change we will reshape the state so it is fit for the future. We cannot stick to business as usual," a cabinet office source said.

"By cutting administrative costs we can target resources at frontline services - with more teachers in classrooms, extra hospital appointments and police back on the beat."

The move could put thousands of jobs at risk and covers back office jobs, including in communications and policy, human resources, and financial procurement management jobs, but will likely exclude frontline service roles such as the border force and prisons.

Cabinet office minister Pat McFadden will write to departments next week.

($1 = 0.7741 pounds)

(Reporting by Suban Abdulla; additional reporting by Liz Piper; Editing by Daniel Wallis)