I think that there's a hope that if the budget is reduced then ways will be found to deliver the service within the budget. Trying to make the savings in advance is self defeating.
In the private business I work in, I reckon staffing levels could be reduced by at least 10% with no impact on productivity whatsoever.
In a previous role I had to make 25% redundancies within a department and managed to do so with no reduction in the amount of work being done, no additional hours worked but rather less lollygagging.
Heck, the time I spend on this website each day, if devoted to productive work could support a 0.1 FTE headcount reduction
See: http://www.publicservice.co.uk/news_story.asp?id=14504