The savings will be made across government agencies, NHS boards and councils annually until 2008.
From the financial year 2009, annual savings could rise to £1bn.
Finance minister Tom McCabe, who is pushing for the cut in administration costs, gave assurances that many jobs would be saved, but unions fear the drive could lead to massive redundancies.
Eddie Reilly, the Scottish secretary of the Public and Commercial Services Union, said he wanted ‘assurances’ there would be no compulsory redundancies.
Does Darwin's theory apply to taxation? Colin ponders...
The EC has been instructed to draft a European Union (EU) directive authorising an EU financial transaction tax, which would apply to ten of the EU’s 28 member states
Accountancy watchdog the FRC has dropped its investigation into the former chief financial officer of Tesco, nearly two years after the supermarket was engulfed in an accounting scandal
Colin imagines how Apple's logo might change in the wake of the EC's ruling over its Irish tax arrangements