Whitehall is bracing for its biggest overhaul in a generation. A senior civil servant told me the new mandate, expected to be announced next week, will force departments to slash budgets by 15% and merge overlapping functions. The goal: a leaner state machine. Critics call it a recipe for chaos.

The plan, championed by the Chancellor, aims to cut £5bn in administrative waste by 2027. It targets what insiders call the “bloated middle”: 30,000 managers across departments like Transport and Health. One official described it as “pruning the dead wood.” But unions warn of a “brain drain” as experienced staff leave.

At the heart of the shakeup is a new Efficiency Unit, reporting directly to the Cabinet Office. It will audit every spending decision above £100,000. A leaked memo suggests it will “challenge the very purpose of departments.” The unit will have the power to veto projects and force shared services.

I spoke to a former permanent secretary who called the plan “necessary but brutal.” He said: “We’ve had decades of layer upon layer. Now the scaffolding is being ripped away.” The real test, he added, will be frontline delivery. “If the cuts hit nurses or border staff, the public will feel it.”

Downing Street insists the changes are about “smarter government.” A spokesperson said: “We are ending the era of wasteful duplication. Every pound must be justified.” But the timing raises eyebrows. This is a government trailing in the polls, eyeing a general election by 2029.

Opposition MPs have seized on the planned staff reductions. Labour’s shadow minister for the civil service called it “a cover for austerity.” She told me: “They are slashing jobs without a plan. We’ve seen this before. It ends in crisis.”

Back in Whitehall, the mood is uneasy. In canteens and corridors, civil servants swap rumours about which department will be merged next. The Treasury is rumoured to absorb the Department for Business and Trade. Culture might be subsumed into Digital. Even the Ministry of Defence is not immune: procurement could be centralised.

The biggest surprise is the planned abolishment of the Government Digital Service (GDS). Once a tech darling, GDS is to be folded into the new unit. A source involved in the transition said: “They want efficiency, not innovation. That’s a mistake.”

But the mandarins pushing the change are unapologetic. One said: “We’ve had too many initiatives that sound good but cost money. This is about trimming fat, not cutting muscle.” Yet the distinction is blurred. The Institute for Government estimates that half of all civil service roles are now in “policy” rather than “service delivery.” The new mandate will flip that ratio.

Meanwhile, the Treasury has already frozen recruitment for non-frontline roles. Departments are told to find savings in IT and HR. No new consultants can be hired without ministerial sign-off. The message is clear: adapt or be cut.

I asked a junior minister whether the shakeup could backfire. He paused, then said: “Yes. But doing nothing is not an option. The public expects value for money.”

The true cost may not be known for years. For now, Whitehall holds its breath.