28 October 2010 Last updated at 13:22

Civil service chief warns of compulsory redundancies

The head of the civil service has told MPs he cannot rule out compulsory redundancies to reduce staff numbers.

Sir Gus O'Donnell was asked how he planned to manage a 34% cut in administration budgets across Whitehall and quangos.

He said it could not be done just "through natural wastage" and compulsory redundancies "would be part of the answer".

He said departments were still working out what it would mean for jobs.

In his spending review last week, Chancellor George Osborne announced plans to cut administration budgets to save £6bn by 2014-15.

Mr O'Donnell told the public administration committee a number of departments had already started offering voluntary redundancies and there was a recruitment freeze.

But he added: "I'm afraid I can't rule out that there will be compulsory redundancies as well."

He said his key job was "getting our numbers down by about a third" but his "leadership challenge" was to keep morale up.

Sir Gus said the recruitment freeze did not mean the Civil Service was stopping graduate recruitment.

He said there was still a high amount of interest among graduates in joining and told MPs it would be a "huge mistake" to stop the intake of 400 to 500 "fast stream" graduates a year.