Exclusive: Civil servants could work from home after pandemic as Rishi Sunak looks to cut costs

Working from home could become a permanent option for some civil servants as the Treasury tells Cabinet ministers to consider keeping Covid changes that save money.

Whitehall departments could also see office space downsized or more officials relocated out of London permanently in the new drive to reduce costs.

Boris Johnson and Rishi Sunak, the Chancellor, on Tuesday wrote to all Cabinet colleagues announcing the “savings and efficiency review” and urging their cooperation.

The Telegraph understands the letter said the review would allow the Government to “capitalise on the productivity gains identified through our response to the pandemic”.

The drive comes with Mr Sunak attempting to bring public spending back under control as borrowing shot up to levels not seen since the Second World War during the pandemic.

While the Treasury accepts spending levels will remain high in the coming years compared with recent decades, there is a hope to make savings where possible.

Treasury figures believe that some changes in the way public services are delivered and departments are run seen during the pandemic could be adopted in the longer term.

One idea that will be scrutinised in the review is whether hybrid working, that allows some civil servants to work from home – thereby reducing the amount of desk space needed each day – could become permanent for some departments.

Another is whether fees spent on consultants can be reduced. A third is whether the way some parts of the public sector have functioned online – such as the courts – could be replicated in the longer term.

No conclusions have been made and any final decisions are months away, with the onus on government departments to come up with proposals for cost savings in day-to-day spending that work in the long term.

The exercise is being carried out before the Treasury’s Spending Review, which will set future spending for government departments. That is expected to conclude in the autumn.

The Telegraph understands part of Mr Johnson and Mr Sunak’s letter read: “We are already spending record amounts. Our plans will see the largest real-term increases in departmental spending for any full parliament.

“As we look beyond 2021/22 we must therefore make sure that government spending remains focused on effectively delivering our key priorities including levelling-up across the country and the provision of first-class frontline public services.

“We owe it to the taxpayer to ensure every pound of their money is well spent and that we deliver the maximum available resources to our top priorities.”

A section about the savings and efficiency review read: “This will interrogate day-to-day departmental spending, allow us to capitalise on the productivity gains identified through our response to the pandemic and reprioritise departmental spending away from lower value, lower-priority programmes and towards the things that matter most.”

Mr Johnson reiterated the message to his Cabinet during their weekly meeting on Tuesday.

A Downing Street spokesperson said: "The Prime Minister highlighted that departments are being asked to take part in a savings and efficiency review ahead of the Spending Review later this year.

"The purpose is to learn the lessons from the last year in how we can run services more efficiently and ensure that we focus our high levels of spending on our key priorities. This is a standard part of the Spending Review process."