Thousands of job cuts at the NHS will go ahead after the £1bn needed to fund the redundancies was approved by the Treasury.

The government had already announced its intention to slash the headcount across both NHS England and the Department of Health by around 18,000 administrative staff and managers, including on local health boards.

The move is designed to remove “unnecessary bureaucracy” and raise £1bn a year by the end of the parliament to improve services for patients by freeing up more cash for operations.

NHS England, the Department of Health and Social Care, and the Treasury had been in talks over how to pay for the £1bn one-off bill for redundancies.

It is understood the Treasury has not granted additional funding for the departures over and above the NHS’s current cash settlement, but the NHS will be permitted to overspend its budget this year to pay for redundancies, recouping the costs further down the line.

‘Every penny will be spent wisely’

Chancellor Rachel Reeves is set to make further announcements regarding the health service in the budget on 26 November.

And addressing the NHS providers’ annual conference in Manchester today, Mr Streeting is expected to say the government will be “protecting investment in the NHS”.

He will add: “I want to reassure taxpayers that every penny they are being asked to pay will be spent wisely.

“Our investment to offer more services at evenings and weekends, arm staff with modern technology, and improving staff retention is working.

“At the same time, cuts to wasteful spending on things like recruitment agencies saw productivity grow by 2.4% in the most recent figures – we are getting better bang for our buck.”

Mr Streeting’s speech is due to be given just hours after he became entrenched in rumours of a possible coup attempt against Sir Keir Starmer, whose poll ratings have plummeted ahead of what’s set to be a tough budget.

Mr Streeting’s spokesperson was forced to deny he was doing anything other than concentrating on the health service.

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He is also expected on Wednesday to give NHS leaders the go-ahead for a 50% cut to headcounts in Integrated Care Boards, which plan health services for specific regions.

They have been tasked with transforming the NHS into a neighbourhood health service – as set down in the government’s long-term plans for the NHS.

Those include abolishing NHS England, which will be brought back into the health department within two years.

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A Japanese manufacturing firm is facing a union battle over plans to shut factories in County Durham with the loss of hundreds of jobs.

NSK said it was proposing to close its two sites in Peterlee as part of a strategy to exit unprofitable businesses.

The factories, which produce bearings for the automotive industry, employ up to 400 people.

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NSK said it had begun consultations with union representatives on its plans.

Unite the Union said it would fight the planned closures. It described the announcement as a “betrayal” of the workforce.

The company first began operations at Peterlee in 1976. It has another UK manufacturing facility at Newark in Nottinghamshire and another three in Germany and Poland.

The Peterlee factories produce bearings for steering columns and wheel hubs.

Its customers are understood to include VW, Renault and fellow Japanese firm Nissan, which has sprawling car production facilities just up the coast at nearby Sunderland.

Its statement said NSK Europe had faced “persistent challenges in the profitability of locally manufactured products”.

“NSK will continue discussions with stakeholders and provide support measures for affected staff if the closure proceeds, which is expected to be completed no later than March 2027.

“The company has not yet determined the full impact of this decision on its business performance,” the statement concluded.

Challenges for UK manufacturers in recent times include Brexit red tape and high energy costs, though the Peterlee operation is understood to have been run on power generated purely from wind.

Unite blamed pressures on automotive parts suppliers from weak demand hitting car manufacturers during the transition away from internal combustion engines to electric vehicles.

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Its general secretary Sharon Graham said: “This is a complete betrayal by NSK of its County Durham workforce, who have broken their backs hitting performance targets that they were told would keep their factories safe.

“There is a viable business case for keeping these sites open and Unite will fight tooth and nail for that to happen.”

Unite said it was urging the government to intervene with financial support to protect automotive jobs.

The UK’s jobless rate has risen to a level not seen since late 2020, according to official figures released ahead of the budget.

The Office for National Statistics (ONS) reported a figure of 5% covering the three months to September – up from 4.8% reported last month. It was a larger leap than economists had predicted, and the ONS said that men were worst affected by the shift.

It leaves the jobless rate at its highest level since December 2020-February 2021.

It had stood at 4.1% when Labour took office last year.

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There was no better news for Chancellor Rachel Reeves in wider, experimental, HMRC data released by the ONS, which showed a 32,000 decline in payrolled employment during October.

That suggested a pause to a more recent trend of declines slowing since sharp falls first witnessed in the spring of this year.

It was April when measures introduced in Ms Reeves’s first budget came into effect, with hikes in minimum pay and employer national insurance contributions hammering employment and investment sentiment in the private sector.

It also coincided with peak US trade war uncertainty as Donald Trump ramped up his tariffs.

ONS director of economic statistics Liz McKeown said of the data: “Taken together these figures point to a weakening labour market.

“The number of people on payroll is falling, with revised tax data now showing falls in most of the last 12 months.

“Meanwhile the unemployment rate is up in the latest quarter to a post pandemic high. The number of job vacancies, however, remains broadly unchanged.

“Wage growth in the private sector slowed further, but we continue to see stronger public sector pay growth, reflecting some pay rises being awarded earlier than they were last year.”

In good news, the overall slowing in the pace of wage growth and weakening jobs market should help bolster the case for an interest rate cut by the Bank of England next month, assuming inflationary pressures continue to ease after last week’s rate hold.

The ONS figures were released as the clock ticks down to the chancellor’s second budget due on 26 November.

Ms Reeves used an event in Downing Street last week to prepare the ground for a painful series of measures that are expected to be only partly offset by some announcements to keep Labour MPs onside, as she stares down a black hole in the public finances believed to be in the region of £30bn.

She has signalled a break from Labour’s manifesto tax pledge not to raise income tax, national insurance or VAT, on the grounds that the world has changed since that promise was made.

The chancellor’s gripes include Brexit and the effects of the US trade war.

Nevertheless, a spending priority would appear to be the lifting of the two-child benefit cap. That would take an estimated 350,000 children out of poverty, according to the Child Poverty Action Group.

Liberal Democrat Treasury spokesperson, Daisy Cooper, said of the employment data: “Surely the writing is on the wall now for the chancellor’s jobs tax.

“Everyone except Rachel Reeves seems to have woken up to the fact that forcing small businesses to pay more in tax for giving people jobs would damage job opportunities. Now the proof is staring her in the face.

“The government must reverse their damaging national insurance hike at the budget, and commit to saving the small businesses who employ millions in Britain and are at risk of collapse, if they’re to have any hope of reversing today’s concerning trend.”

The Conservatives accused Ms Reeves of presiding over a “high-tax, anti-business” agenda.

Secretary of State for Work and Pensions, Pat McFadden, said: “Over 329,000 more people have moved into work this year already, but today’s figures are exactly why we’re stepping up our plan to Get Britain Working.

“We’ve introduced the most ambitious employment reforms in a generation to modernise jobcentres, expand youth hubs and tackle ill-health through stronger partnerships with employers.

“And this week we’re going further by launching an independent investigation that will bolster our drive to ensure all young people are earning or learning.

“We’re backing businesses to grow and create jobs by cutting red tape, signing trade deals and securing hundreds of billions in investment, which helped make the UK the fastest growing economy in the G7 in the first half of this year.”