Civil servants are facing sharp cuts to their "golden goodbye" payments after the coalition Government reaffirmed its intention to cut the cost of laying off public sector staff.
The Cabinet Office confirmed that ministers intended to go ahead with reform of the Civil Service Compensation Scheme (CSCS) to bring it more in line with the private sector.
The move follows the disclosure at the weekend that Chancellor George Osborne ordered government departments to draw up plans for budget cuts of up to 40% as they prepare for the spending review in October.
Although Treasury sources insisted it was only the start of the review process and that no department would face cuts on that scale, the Government is expecting 600,000 public sector jobs to go over the next five years.
The Daily Telegraph reported that ministers are anxious to push through reform of the CSCS so that any civil servants made redundant after September 15 will be subjected to the new terms.
Cabinet Office Minister Francis Maude, who is the architect of the changes, is due to address senior civil servants on the Government's new, stricter approach at a conference. Mr Maude is said to be concerned that payoffs to civil servants - which can on occasion amount to six years salary - are now significantly out of line with those paid in the private sector.
A commitment to reform the CSCS was part of the coalition agreement between the Conservatives and the Liberal Democrats. A Cabinet Office spokesman said: "As outlined in the coalition agreement, we are looking at ways to reform the CSCS to bring it more into line with good practice in the private sector."
Meanwhile, Education Secretary Michael Gove is set to announce that he is halting rebuilding projects at some 700 schools which were approved by the former Labour government under the Building Schools for the Future (BSF) programme. "Ministers have been clear that BSF has not delivered good value for money and that the programme is beset by delays and red tape," a Department for Education spokesman said.
The plan was condemned by shadow education secretary Ed Balls who said that it would hit construction jobs as well as depriving schools of badly needed new accommodation. "That is private sector jobs that which are going to be lost now, as well as the new schools which aren't going to be rebuilt. It is very short-sighted," he said.
Labour also launched a renewed attack on last month's emergency Budget by Mr Osborne, claiming that the burden would fall disproportionately on women. Shadow work and pensions secretary Yvette Cooper said she commissioned research by the independent House of Commons Library which showed that more than 70% of the £8 billion in additional revenue raised from direct tax and benefit changes will come from women taxpayers.