NAO guidance: Government exits and redundancies

• Government departments have significant targets to reduce running costs 
• At least 8,500 civil servants are expected to leave under exit schemes planned up to 2027 
• The National Audit Office (NAO) sets out expectations for good practice and value for money in exit processes 
• Download the Good Practice Guide: Government exits and redundancies

Many government departments and organisations are implementing employee exit schemes to reduce staff numbers and cut running costs. This is aimed at improving efficiency and delivering better value for taxpayers. 

To aid government departments and organisations, the NAO has created guidance to assess how exits and redundancies in government are being conducted, which includes expectations for how exit processes should be carried out. 

The 2025 Spending Review set target reductions for all departments' administration budgets of at least 11% in real terms by 2028-29, and 16% by 2029-30. 

Government employers are making large-scale or ‘bulk' staff reductions using established schemes for voluntary exits, voluntary redundancies, and compulsory redundancies.  

Over 8,500 civil servants are expected to leave under current exit schemes up to the end of March 2027, at a cost of £536 million. More exits and redundancies are expected to be announced, both in the civil service and wider public sector. 

Mutually agreed exits 

The government announced in March 2025 the introduction of a mutually agreed exits procedure for civil service staff, described by the responsible Cabinet Office minister as “giving managers more tools to address substandard performance”.  

This type of scheme is used in the private sector and the NHS, and allows employees to leave in specific situations, such as: 

Skills mismatch: When someone's job isn't at risk, but they don't have the skills needed for the role going forward. 

Poor performance: When someone's performance regularly dips and isn't likely to improve soon. 

Broken working relationships: When things like repeated grievances have damaged the working relationship beyond repair. 

The Cabinet Office is currently conducting a pilot of mutually agreed exits with nine departments and arm's-length bodies. It approves all applications for mutually agreed exits and will monitor the use of the process when it is introduced more widely to the civil service.  

Challenges for government 

Government departments and organisations face significant challenges in designing and implementing exit schemes. The NAO has identified the following six challenges which relate to the impact on organisational and workforce capability, and the value for money of the schemes. These include: 

1. 1. Delivering with fewer people 
   How can organisations keep running smoothly even with smaller teams? 

1. 2. Retaining top talent while enabling poorer performers to leave 
   How can organisations ensure decisions on who to keep and who can leave are based on effective performance management arrangements? 

1. 3. Supporting everyone through change 
   How can organisations meet the needs of both those leaving and those staying? 

1. 4. Minimising exit and redundancy costs 
   How can organisations reduce the financial impact of staff exits and redundancies? 

1. 5. Thinking beyond individual organisations 
   How can organisations take a joined-up, government-wide approach to exits and redundancies? 

1. 6. Ensuring longer-term value for money 
   How can organisations make sure today's decisions offer long-term value for money?