Some £6bn in government IT spending will result in massive job cuts across departments over the period of the next spending review, covering the period until 2008.
The DWP alone will lose 40,000 staff - including the reallocation of 10,000 staff - as back office efficiency improvements mean more money will be funneled to front-line staff.
The overall number of jobs in the DWP will therefore fall from 130,000 to 100,000.
Customs & Excise and the Inland Revenue will be merged, resulting in 14,000 job cuts in administration.
The government will require all departments to cut 5% in real terms from administration budgets during the period.
This will free up an additional £20bn for front-line spending by 2008, chancellor Gordon Brown says.IFAonline
What made financial headlines over the weekend?
Vitality at Work scheme
Reporting to Steve Hill
Appointed on 19 September