The government is facing the threat of industrial action after Gordon Brown unveiled plans to cut more than 100,000 civil service jobs to free up resources for frontline public services.
He told Parliament that 84,150 civil service jobs would go, with a further 20,000 jobs Due to be lost from the administrations in Scotland and Wales, and from the Northern Ireland Office.
The chancellor also announced plans to relocate other civil service jobs out of London and the south-east, including 5,000 staff posts from the Treasury, 4,000 from the Department for Work and Pensions, 3,900 from the Ministry of Defence and almost 1,000 from each of the departments of Health, Education and Trade and Industry.
Tackling the high levels of sick leave among civil servants also emerged as a key part of the governmentís strategy to increase efficiency in the public services.
Figures published earlier this month by the Chartered Institute of Personnel and Development (CIPD) showed that workers in the public sector take 40 per cent more days off than their private sector counterparts, costing the taxpayer £4bn a year, the equivalent to 1p on income tax and a further 1p on fuel duty.
Merely reducing the public sector absence rate to the same level as the private sector would save £1bn a year.
Mr Brown said that some 80 per cent of days lost to sickness are "self-certified," and that the arrangements were "open to abuse". He said that he would toughen up on rules for sick days and require workers to provide more proof of genuine illness.
Mark Serwotka, leader of the Public and Commercial Services (PCS) union said the Chancellor had insulted his members and that he could not rule out strike action.
"For the government to imply its own workforce are shirking is just another a slap in the face," he said.
"In the light of such attacks on hard working civil servants we will be consulting our members, taking our case to the wider trade union movement and to the users of public services in order to mount the most vigorous defence of our membersí jobs.
"We cannot rule out industrial action in the face of such a serious attack."