The chancellor has said she is “confident” 10,000 civil service jobs can be axed after numbers ballooned during the pandemic – as she seeks to cut more than £2bn from the budget.
Rachel Reeves has told Sky News she is certain the government can deliver those cuts to “back office jobs” to free up resources for “front line” services.
She is expected to unveil a raft of spending cuts during the spring statement on Wednesday – and has reportedly ruled out tax rises.
The FDA union has said the government needs to be honest about the move, first reported by The Telegraph, and the “impact it will have on public services”.
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What to expect from the spring statement
Reeves concedes cuts won’t be pain-free
Appearing on Sky’s Sunday Morning With Trevor Phillips programme, the chancellor was pushed repeatedly for a precise number of civil service jobs she wants to cut, and she eventually replied: “I’m confident that we can reduce civil service numbers by 10,000.
“And during COVID, there were big increases in the number of people that were working in the civil service.
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“That was the right thing to do to respond to those challenges. But it’s not right that we just keep those numbers there forever.”
Ms Reeves said there are “a number” of civil service jobs that can be done by technology, while “efficiencies” can also be made by getting rid of quangos.
Asked what roles she expects to no longer need, she said: “It will be up for every department to set out those plans.
“But I would rather have people working on the front line in our schools and our hospitals and our police, rather than back office jobs.”
She said cuts will be made to things like travel budgets, spending on consultants, and also on communications.
She conceded that the cuts will not be pain free, but says she would rather spend money to “deliver better public services”.
Image: Chancellor Rachel Reeves will give the spring statement next week. Pic: PA
Civil service departments will first have to reduce administrative budgets by 10%, which is expected to save £1.5bn a year by 2028-29.
The following year, the reduction should be 15%, the Cabinet Office will say – a saving of £2.2bn a year.
The chancellor has also said she won’t be putting up taxes on Wednesday, telling The Sun On Sunday: “This is not a budget. We’re not going to be doing tax raising.”
Ms Reeves added: “We did have to put up some taxes on businesses and the wealthiest in the country in the budget [in the autumn].
“We will not be doing that in the spring statement next week.”
The chancellor has repeatedly insisted she won’t drop her fiscal rules which preclude borrowing to fund day-to-day spending.
Civil service departments will receive instructions from the Chancellor of the Duchy of Lancaster Pat McFadden in the coming week, The Telegraph reported.
“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 comes after the government last week revealed welfare cuts it believes will save £5bn a year by the end of the decade.
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FDA general secretary Dave Penman said the union welcomed a move away from “crude headcount targets” but that the distinction between the back office and frontline is “artificial”.
“Elected governments are free to decide the size of the civil service they want, but cuts of this scale and speed will inevitably have an impact on what the civil service will be able to deliver for ministers and the country…
“The budgets being cut will, for many departments, involve the majority of their staff and the £1.5bn savings mentioned equates to nearly 10% of the salary bill for the entire civil service.”
Ministers need to set out what areas of work they are prepared to stop as part of spending plans, he said.
“The idea that cuts of this scale can be delivered by cutting HR and comms teams is for the birds. This plan will require ministers to be honest with the public and their civil servants about the impact this will have on public services.”
Mike Clancy, general secretary of the Prospect union, warned that “a cheaper civil service is not the same as a better civil service”.
“Prospect has consistently warned government against adopting arbitrary targets for civil service headcount cuts which are more about saving money than about genuine civil service reform.
“The government say they will not fall into this trap again. But this will require a proper assessment of what the civil service will and won’t do in future.”
Volodymyr Zelenskyy is heading to Downing Street once again, but Prime Minister Sir Keir Starmer will be keen to make this meeting more than just a photo op.
On Monday the prime minister will welcome not only the Ukrainian president, but also E3 allies France and Germany to discuss the state of the war in Ukraine.
French President Emmanuel Macron and German Chancellor Friedrich Merz will join Sir Keir in showing solidarity and support for Ukraine and its leader, but it’s the update on the peace negotiations that will be the main focus of the meet up.
The four leaders are said to be set to not only discuss those talks between Ukraine, the US and Russia, but also to talk about next steps if a deal were to be reached and what that might look like.
Ahead of the discussions, Sir Keir spoke with the Dutch leader Dick Schoof where both leaders agreed Ukraine’s defence still needs international support, and that Ukraine’s security is vital to European security.
But while Russia’s war machine shows no signs of abating, a warm welcome and kind words won’t be enough to satisfy the embattled Ukrainian president at a time when Russian drone and missile attacks continue to bombard Kyiv.
Image: Keir Starmer welcoming Volodymyr Zelenskyy to Downing Street during a previous visit. Pic: AP
What is the latest in negotiations?
Over the weekend, Mr Zelenskyy said he had discussed “next steps” with US President Donald Trump’s advisers and was “determined to keep working in good faith”.
“The American representatives know the basic Ukrainian positions,” Mr Zelenskyy said in his nightly video address. “The conversation was constructive, although not easy.”
But on Sunday evening, ahead of an event at the Kennedy Center, President Trump said he was “disappointed” with Mr Zelenskyy, as was asked about the next steps in Russia-Ukraine talks following negotiations.
He said: “We’ve been speaking to President Putin and we’ve been speaking to Ukrainian leaders, including Zelenskyy, President Zelenskyy.
“And I have to say that I’m a little bit disappointed that President Zelenskyy hasn’t yet read the proposal. That was as of a few hours ago.
“His people love it. But he hasn’t – Russia’s fine with it. Russia’s you know, Russia, I guess, would rather have the whole country when you think of it. But Russia is, I believe, fine with it, but I’m not sure that Zelenskyy’s fine with it. His people love it but he hasn’t read it.”
On Saturday, Keith Kellogg, Trump’s outgoing Ukraine envoy, had told the Reagan National Defence Forum that efforts to resolve the conflict were in “the last 10 metres”.
Kremlin spokesman Dmitry Peskov praised new US security strategy over the weekend, adding that Russia hopes this would lead to “further constructive cooperation with Washington on the Ukrainian settlement”.
Multimillion-pound plans for technology needed to defend the UK’s undersea cables and pipelines have been set out by defence chiefs.
The Atlantic Bastion programme, announced as part of the Strategic Defence Review, will combine autonomous vehicles and AI with warships and aircraft to identify threats to underwater structure and to defend them.
The Ministry of Defence (MoD) said it was “in direct response to a resurgence in Russian submarine and underwater activity”, including the spy ship Yantar, which was tracked around UK waters last month.
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Russian spy ship on edge of UK waters
The project has attracted a combined investment of £14m from the MoD and industry this year, with hopes the technology can be deployed next year.
A total of 26 firms from the UK and Europe have submitted proposals for the project.
Last week Defence Secretary John Healey visited Portsmouth Naval Base to examine some of the early technology which could be used as part of Atlantic Bastion.
It included the SG-1 Fathom, an underwater glider; Rattler, an unmanned remote-controlled boat; a model of an autonomous anti-submarine helicopter called Proteus; and an uncrewed experimental submarine called Excalibur.
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Image: An unmanned surface vehicle called Rattler is demonstrated. Pic: PA
Image: SG-1 Fathom is an autonomous underwater glider. Pic: PA
Image: An experimental uncrewed sub called Excalibur is on view at Portsmouth Naval Base. Pic: PA
“People should be in no doubt of the new threats facing the UK and our allies under the sea, where adversaries are targeting infrastructure that is so critical to our way of life,” Mr Healey said.
“This new era of threat demands a new era for defence, and we must rapidly innovate at a wartime pace to maintain the battlefield edge.”
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The launch of Atlantic Bastion coincides with a speech from the First Sea Lord General Sir Gwyn Jenkins at the International Sea Power Conference in London on Monday.
Sir Gwyn is expected to say: “The SDR [Strategic Defence Review] identified the maritime domain as increasingly vulnerable – and that maritime security is a strategic imperative for the UK. It is time to act.
“This begins with Atlantic Bastion – our bold new approach to secure the underwater battlespace against a modernising Russia.”
The MoD spokesman said: “Atlantic Bastion will see ships, submarines, aircraft and unmanned vessels connected through AI-powered acoustic detection technology and integrated into a digital targeting web – a pioneering network of weapons systems that allow battlefield decisions for targeting enemy threats to be made and executed faster.”
Subsea infrastructure is the lifeblood of the UK’s connectivity, carrying 99% of international telecommunications data and vital energy supplies such as electricity, oil and gas.
Children as young as seven are being referred to Britain’s national cybercrime intervention programme, the Money team can reveal, as companies reel from multimillion-pound hacks.
The average age of referrals to Cyber Choices, which receives people committing or intending to commit entry-level cybercrime, is just 15 this financial year, with the youngest only seven, the National Crime Agency told Money.
The NCA is seeing a year-on-year increase in referrals, mostly gamers aged 10 to 16, at the same time as insurance payouts to hacked UK businesses have rocketed 230%.
“I was right around that age,” says Ricky Handschumacher, a former cybercriminal whose introduction to hacking on a videogame aged 15 led him to a four-year federal prison sentence for stealing $7.6m in cryptocurrency.
“They are even more vulnerable right now than back then because it’s so mainstream.”
Handschumacher, now 32, is one of two notorious crypto hackers who warned that teenagers were increasingly following the same path in exclusive interviews with Money.
“It seems to be growing more and more, it’s not stopping,” says Handschumacher, from Florida.
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“You have to really pay attention to what your kid’s doing. You may think ‘my kid would never do that’, but don’t be so sure.
“Some of these 15, 16-year-olds, they’re sitting on millions.”
Image: Pic: Ricky Handschumacher
At least 105 referrals of all ages have been made this financial year to the Cyber Choices programme, but that’s just the start, warns Jonathan Broadbent, a senior officer at the NCA’s National Cyber Crime Unit.
“I don’t think the referrals represent the full scale of the threat,” Broadbent warns. “Cybercrime against schools – that is really quite prevalent across the country.”
Students caused 57% of insider data breaches in schools between January 2022 and August 2024, according to the Information Commissioners Office.
Escalating attacks
Britain has been given a sense of its scale in a spate of recent multimillion-pound attacks.
Hackers shut down Jaguar Land Rover factories for five weeks in August, causing £1.9bn in disruption to the UK economy, according to the Cyber Monitoring Centre.
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Watch: Angry father says Kido ‘completely failed their duty’
The gaming pathway
Gaming, which is participated in by 97% of children aged eight to 17, is a major pathway into cybercrime, according to Broadbent.
It was a route followed by both Handschumacher and another reformed hacker, Joseph Harris, 28, who was jailed for stealing $14m in cryptocurrency in 2018.
His entry to hacking at the age of 12 was Club Penguin, a children’s game where players navigate a cartoon penguin through a wintery island full of sled races, dance contests and treasure hunts.
It’s an image that is incongruous with the sight of Secret Service Agents swarming a Missouri petrol station eight years later and pointing their guns at him.
Image: Club Penguin at the Electronic Entertainment Expo in 2011. Pic: Reuters
It all started in 2010, Harris says, when he found a bug in Club Penguin allowing him to force the game to loop when he collected coins, affording him rare items from the in-game shop.
Tutorials on YouTube convinced him it was quicker to phone email providers and trick his way into accounts that already owned these outfits and accessories.
“It sounds silly because it’s a children’s game, but some of those items were worth thousands of dollars,” says Harris.
And by age 13 that’s what he was making, selling the accounts to Club Penguin enthusiasts willing to give him $2,000 for the privilege.
“The thrill and the accomplishment was more of a rush for me than the actual money,” Harris says.
“I had really bad ADHD so I couldn’t focus on school, so a lot of the time I didn’t have the best grades.”
Harris, who now runs cybersecurity firm Dynamo, adds: “Hacking was such an interesting topic that I feel my hyper-fixation let me focus on it heavily.”
Neurodiversity
A link between neurodiversity and hacking proficiency has been suggested by some research, says chartered psychologist professor John McAlaney.
Approximately 17% of people referred to the British cybercrime investigation groups Cyber Prevent and Pursue between 2017 and 2020 were diagnosed with autism or self-referred as having autistic-like traits, far higher than the 1-2% recorded in the general population.
While the ability to hyperfocus or detect patterns may be relevant, there’s “quite a lot of stereotyping going on”, says McAlaney, author of Forensic Perspectives On Cybercrime.
Image: Pic: Bournemouth University
Hackers aren’t lone wolves with limited social skills sitting in a dark room looking at a glowing screen, he says.
In fact, it is the social identity and positive reinforcement provided by hacking communities that can appeal to a teenager’s desire to find a sense of belonging, he says, “especially for someone who hasn’t felt understood in the offline world.
“You do get what can be surprisingly quite nice support networks on what may look like a criminal hacking forum.”
Sense of community
Unlike his unease at school, Harris started to feel at home on hacking forums as he looked for new targets such as Youtube, PlayStation and Xbox accounts.
Users were willing to pay $500 to $1000 for desirable usernames in the same way that motorists splash out on rare numberplates.
Aged 15, Harris exploited software bugs to steal personal data and trick customer support staff into handing over account access before selling them on.
He’d receive $2,000 a month and, more importantly, the approval of his online friends.
“I didn’t have that much confidence and finally people were praising me for getting these usernames,” he says.
“I started thinking maybe I am okay.”
This is a common experience among children referred to Cyber Choices, says Broadbent: “Often these young individuals can be isolated, they might be in a bedroom and maybe not engage with their families too much and they get that sense of community from being on things like forums.”
But, like McAlaney, Broadbent stresses there is no typical profile for a teenage cybercriminal.
Anyone can be a hacker
Image: Ricky Handschumacher as a teenager
Take Handschumacher, who was a rising student baseball star playing Halo 3, a game sold to 12 million people, when he first encountered hacking.
A competitor on the multiplayer sci-fi combat game targeted him with a DDoS, a cyberattack that overloads a victim’s internet connection.
It’s the kind of hack that Broadbent commonly sees carried out by children referred to Cyber Choices, alongside remote access trojans, which allow hackers to access laptop cameras.
“How are they doing that? How can I do that?” Handschumacher asked himself as his helpless Halo soldier froze, allowing the hacker to kill them.
Image: Pic: Reuters
He searched gaming forums, leading to hacking forums, and soon he was stealing Xbox, Instagram and Twitter accounts just like Harris.
“In my case, it was strictly for money,” he says.
“As a teenager, you like to flex. You like to be able to buy whatever you want to buy and do whatever you want to do.”
Their motivations may differ, but so similar were the pair’s path into hacking that they met when Handschumacher stole a PlayStation account from Harris that the latter had himself hacked.
“We started by butting heads,” says Harris, but by the time they’d started stealing straight from cryptocurrency wallets in their late teens and early twenties, they were collaborating – and they weren’t the only ones.
Disorganised crime
When Handschumacher stepped outside his front door in 2018 and found “about 50 cop cars” surrounding him, he was accused of being a member of an international hacking gang named The Community.
It’s a mafia-esque description often deployed by law enforcement, the media and criminals themselves, including in the attacks on M&S, Co-op and Harrods linked to “Scattered Spider” and the attack on JLR claimed by “Scattered Lapsus$ Hunters”.
Some hackers do operate like this, says Alexandra Fedosimova, digital footprint analyst at cybersecurity firm Kaspersky.
Experienced cybercriminals will recruit greener ones over Telegram or the dark web to carry out timely grunt work for cash, like accessing a company’s online infrastructure, before stepping in themselves to steal data, she says.
Image: Alexandra Fedosimova. Pic: Kaspersky
But Harris and Handschumacher describe a far more fluid, loose network of teenagers and young adults who weren’t taking their crimes very seriously.
Any one “job” could include friends, friends of friends, a recommendation from an acquaintance and so on, some of whom used their real names while others remained anonymous.
“You wouldn’t have a specific group,” says Handschumacher, adding he didn’t know some of his co-defendants.
Indeed, the group “Scattered Lapsus$ Hunters” is thought to be made up of hackers formerly part of three different groups, Shiny Hunters, Lapsus$ and Scattered Spider, who themselves are said to have emerged from The Community.
Another game
Broadbent says child hackers he sees are often bored, curious or tech-talented children who wanted a community, a challenge, competition and status among their peers, and, like most teenagers, were willing to push boundaries to get it.
“It was more of the challenge, the thrill, the rush you get from getting those big numbers,” says Harris, who says he stole just under $30m in crypto the year he was caught.
Besides a few videogames, he says he never spent much stolen cash, remaining in a rented house with five roommates for $400 a month.
“Your moral compass fades,” he says. “I was thinking ‘it’s on the internet’, so I didn’t think it was that bad.”
Handschumacher, who spent $250,000 on jet skis, off-road vehicles and VIP access to clubs for his friends, agrees.
“It’s not in their house, it was just an online currency, so what is the actual crime?” he says he thought at the time.
But some of victims targeted by Handschumacher and his co-defendants lost their entire retirement savings, according to the US Attorney’s Office.
“You don’t see these people face to face, so you don’t realise the damage you’re doing, especially when it comes to crypto,” Handschumacher says.
This is called the disinhibition effect, explains McAlaney: “Online interactions feel less real to us than offline interactions, which can make us be more impulsive and more extreme online.”
Knowing there is a victim on an intellectual level doesn’t impress on hackers the consequences for the victim in the same way as sitting opposite them might, he says.
“Our brains have evolved over thousands of years and have not really caught up with the fact that online technology exists.”
Crashing down
For several years, Harris made “millions” exploiting software bugs or using password database breaches to gain access to email accounts used by crypto owners.
Meanwhile, Handschumacher was perfecting sim-swapping hacks, which meant finding enough personal data to impersonate a victim and convince their mobile network provider to transfer their number to a new sim card and bypass crypto wallet authentication.
Success would mean severing the victim’s phone connection, firing the starting gun on a race to steal the victim’s cryptocurrency before they realised what had happened.
This type of hack, carried out separately, would lead law enforcement to both Harris and Handschumacher in 2018.
Plain-clothes secret service officers “swarmed” a petrol station that Harris, then aged 21, was using.
“They pointed a gun at me. I thought I was getting robbed at first,” he says.
Harris was sentenced to 16 months for money-laundering, grand theft, identity theft and hacking, he says, serving eight months behind bars.
Handschumacher, then aged 25 with a fiance and two children, was confronted by dozens of officers as he left work one morning.
“That was it,” he says. “It all came crashing down after that.”
He served 27 months of a four-year sentence handed to him in February 2022 due to pandemic delays, primarily for conspiracy to commit wire fraud.
Hacking games
The growing number of cybercriminals comes amid a global shortage of cybersecurity professionals.
Some four million staff members are needed worldwide, with 67% of organisations facing a moderate-to-critical skills gap, according to the World Economic Forum.
“The issue is the industry is really conventional in how they look at talent,” says Fergus Hay, founder of the Hacking Games (THG), an organisation trying to redirect teenage hackers towards legitimate jobs in cyber.
The cyber industry looks for staff on LinkedIn, expects computer science degrees and other official certificates and demands a large amount of work experience for its entry-level jobs.
“What they’re missing,” Hay says, “is an entire generation who are developing their skills in non-conventional areas like gaming.
“Every hacker is a gamer, and that’s because it’s puzzle-solving and logic mindsets.”
THG is working on a CV-like recruitment programme, seen by the Money team, that determines an applicant’s hacking aptitude using non-traditional metrics such as gaming performance and modifications to match hackers with careers in cyber.
Telling teenagers these jobs exist is part of the challenge, so THG is running education and awareness campaigns on social media, connecting reformed hackers with students in Co-op schools, and plans to roll out hacking eSports tournaments next year.
Cyber Choices is undertaking similar outreach, with visits to schools and workshops educating children about computer misuse law and promoting legal cyber opportunities.
But cold, hard cash needs to be part of the answer too, Handschumacher and Harris say.
Bug hunting
“I don’t have any cybersecurity certificates. I’m all self-taught, everything, so it’s hard to work for a normal company,” says Handschumacher.
The only way for “unqualified” hackers to apply their skills ethically is by collecting so-called bug bounties.
These are payments offered by companies for finding bugs in their systems before an unethical hacker does, but the payouts are tiny compared to the value of some of the bugs.
Harris says he found and reported a critical vulnerability in a gambling website that could have allowed a cybercriminal to withdraw “infinite money”.
He was paid $2,500 for his efforts, he says, not enough to put off a would-be teenage cybercriminal.
“They need to up payments by double to triple, in my opinion, then I think there’d be more incentive to do them,” says Harris.
Handschumacher put it plainly: “You’re going to either make a million or a thousand. I guarantee you, 99% of 16-years-olds are going to take the million.”