Conservative MP Tony Baldry has said a £1.3m budget cut at Bullingdon Prison would mean scrapping education and life skills programmes designed to reduce re-offending.
During a debate on 2 December 2009, Mr Baldry said the only alternative for the Oxfordshire jail would be to make prison officers redundant.
The Banbury MP said the government should be focusing on reducing the overall prison population, rather than cutting individual prison budgets.
But Justice Minister Claire Ward said spending reductions were inevitable.
"Bullingdon Prison will have to play its part in finding savings," she said.
Ms Ward said the likely reduction in staff posts at Bullingdon in 2010-11 equated to 16 uniformed staff and two managers.
She added that there would be no reduction in education provision, drug treatment services, sex offender programmes, or health services for prisoners at Bullingdon.