Civil servants face axe in spending cuts

Thousands of civil servants face the sack as the Coalition struggles to find more cuts, Parliament's spending watchdog has warned.

In a report due to be published today, the Public Accounts Committee said Whitehall departments would have to shift from voluntary to compulsory redundancies to save a further £400m a year.

"Compulsory redundancies will have to be used more, bringing considerable risks of damage to morale," said Richard Bacon, a Tory member of the committee. "Even greater challenges are ahead. The second phase will be more difficult as the 'easier' savings have already been made."

The all-party committee also warned that the 18,000 job cuts could prove short-lived if the Government does not act quickly to reallocate responsibilities amongst workers who have survived the cull. "Without a fundamental redesign in departments' working practices, staff numbers will probably rise as soon as restrictions on recruitment and spending have been lifted," said Mr Bacon.

The initial cost of redundancy payments, which could be up to £600m, will take between 11 and 15 months to recoup, after which substantial annual savings would be made.