The Department for Constitutional Affairs (DCA) and the Attorney General?s Office could be forced to reduce frontline services and impose pay and job cuts, after last week?s Budget demanded a 3.5% reduction in real terms year on year to both departments? expenditure.

The Crown Prosecution Service (CPS) ? which comes under the Attorney-General?s wing ? will make some of its ?workforce modernisation? savings by reducing work sent out to the bar and making greater use of in-house advocates, the Gazette has been told. It will also increase its use of non-legally-qualified designated caseworkers in magistrates? courts.

Public spending increases for the two departments will be less than inflation until at least 2011.

The DCA had already been directed to make cuts of ?290 million by 2006/7 but only managed ?244 million ? leaving ?46 million still to find. The CPS managed to cut ?70 million after only being asked to cut ?34 million. But the Budget documents said it must still make ?efficiencies? and improve performance by implementing ?workforce modernisation? and ?streamlining magistrates? court processes?.

A spokesman for the Attorney General?s Office said it expects the savings to be made through modernisation and efficiency drives, including greater use of IT. Regarding possible job losses, he said ?staff implications of the settlement still need to be assessed?.

A DCA spokeswoman acknowledged that its funding will decrease, but said the department will cope through ?improvements in the way we work, while maintaining the level of service we provide to the public?. She said there will be ?funds to enable us to implement the conclusions of the pay and grading review?, and the DCA can ?now start negotiations in earnest with the unions?.

The 3.5% cuts faced by both departments are half a percent above the overall government savings target.

But the Budget reiterated government pay rise limits of 1.9%, ?the lowest level of awards in over ten years?. What the DCA will be able to bring to the negotiating table is therefore unclear.

Alex Flynn, spokesman for the Public and Commercial Services Union (PCS), said further industrial action ? following the recent one-day strike ? was likely. ?People are extremely angry?, especially about the regional pay initiative announced this week, he said. But the PCS wants to sit down with the government over pay, Mr Flynn added.

News of the imposition of a tough financial regime came in the same week that the Lord Chief Justice, Lord Phillips, warned that he had been receiving reports ?from all over the country? showing that economies already imposed because of financial stringency are damaging the administration of justice. He said the Lord Chancellor was in danger of breaching his statutory duty to ensure the courts have sufficient resources.