Gordon Brown has paved the way for a major cost-saving programme at DEFRA by unveiling radical plans to streamline government.

The Prime Minister warned that the civil service wages bill would be slashed by 20% and public money saved by moving services online as the government strives to reduce its budget deficit in the wake of the recession.

At the same time, spending on consultants would be halved and the budget for communications reduced by 25%. Salaries for top civil servants earning more than £150,000 would need Treasury approval.

The government has already promised savings of £35 billion a year by 2011. The new plans are even more ambitious – although DEFRA insisted any impact on front-line services to farmers would be minimised.

Mr Brown said: “By identifying new ways of working – and being prepared to make the tough choices – we can deliver in excess of another £12bn in efficiency savings over the next four years.”

The exact impact on farmers remains unclear. But government departments including DEFRA have already been asked to examine ways of making their programmes more efficient. So, too, have Natural England and the Rural Payments Agency.

Mr Brown’s announcement came two days before Chancellor Alistair Darling admitted in his Pre-Budget report that the economy would shrink by 4.75% in 2009 compared with his Budget estimate in April of 3.5% (see Business, pages 22).

DEFRA permanent secretary Helen Ghosh said any potential cuts in public spending would have a minimal impact on the delivery of vital services to farmers. But the Country Land and Business Association disagreed.

CLA president William Worsley said: “It is absurd for the government to announce its intentions to put more services online when 25% of rural residences and businesses cannot receive effective broadband.

“Until there is a public-private partnership between the government and internet service providers that will invest in at least 2MB to every door across the country, online services will mean that rural areas are left behind in the digital divide.”

Shadow DEFRA secretary Nick Herbert said soaring budget deficits at home and abroad could thwart future support for farming. It was already clear that CAP funding would be hit, reducing farmers’ single payments.

The Treasury would be in similar dire straits, said Mr Herbert during a visit to the West Country. This would threaten funding for disease measures and other agricultural issues, he said.

The government should make food production the priority within DEFRA, he told NFU members in Dorchester. “Food security is as important as energy security and we must not leave tackling it until too late.”

Greater subsidies for farming to boost production were out of the question, Mr Herbert suggested. Instead, the government needed to ensure the market was operating correctly to give farmers better real returns, he argued.

A DEFRA spokesman said: “Increasing food production while protecting the environment on which food production ultimately depends is at the heart of DEFRA’s draft food strategy, which we hope to finalise in the new year.”