Up to 500,000 public sector jobs could go by 2014-15 due to the changes, according to the Office for Budgetary Responsibility.

The pension age will rise sooner than expected, some incapacity benefits will be time limited and other money clawed back through changes to tax credits and housing benefit.

A new bank levy will also be brought in - with full details due on Thursday.

Mr Osborne said the four year cuts were guided by fairness, reform and growth.
Continue reading the main story
The Spending Review: Making It Clear
Reaction and analysisLive
Key points at-a-glance
What it means
Osborne: 'Hard road, better future'Watch

The 19% average cuts to departmental budgets were less severe than the 25% expected - thanks to bigger savings from the welfare budget, the chancellor told MPs.

He claimed this meant his plans were less than the 20% cuts Labour had planned ahead of the general election.

Unveiling his Spending Review in the Commons, which includes £81bn in spending cuts, he told MPs: "Today is the day when Britain steps back from the brink, when we confront the bills from a decade of debt."

He added: "It is a hard road, but it leads to a better future."

Universal benefits for pensioners will be retained exactly as budgeted for by the previous government and the temporary increase in the cold weather payment will be made permanent.
Continue reading the main story
Spending Review documents

PDF download
Spending Review[1.96MB]

Most computers will open PDF documents automatically, but you may need Adobe Reader
Download the reader here
Documents hosted by Direct.gov.uk

But a planned rise in state pension age for men and women to 66 by the year 2020, will be brought forward, with a gradual increase in the State Pension Age from 65 to 66, starting in 2018.

Up to 500,000 public sector jobs could go by 2014-15 due to the changes, according to the Office for Budgetary Responsibility.

Mr Osborne has not set out in detail where the jobs will go but he admitted there will be some redundancies in the public sector, which he said were unavoidable when the country had run out of money.
Bank levy

He has set out extensive cuts to individual government departments - including:
Home Office - 6% cuts, with police spending down by 4% each year of the spending settlement
Foreign Office - 24% cut through reduction in the number of Whitehall-based diplomats and back office costs
HM Revenue and Customs - 15% through the better use of new technology and greater efficiency
Continue reading the main story
“
Start Quote

The chancellor's big surprise announcement is that the state pension age will rise for both men and women to 66 ”
Nick Robinson
BBC political editor
Read Nick Robinson's analysis
Mark Easton: It's not 'just the economy, stupid'
Robert Peston: Sack lessons for government

The Department for International Development's budget will rise to £11.5bn over the next four years, reaching 0.7% of national income in 2013.

Each government department will next month publish a business plan setting out reform plans for the next four years.

Plans for a 1,500 place new prison have been dropped, he said.

The government will also deliver £6bn of Whitehall savings - double the £3bn promised earlier, said the chancellor.

There will be overall savings in funding to local councils of 7.1%, but ring-fencing of all local government revenue grants will end from April next year, except for simplified schools grants and a public health grant.

The Spending Review is the culmination of months of heated negotiations with ministers over their departmental budgets and comes a day after the Ministry of Defence and the BBC learned their financial fate.
'Irresponsible gamble'

The MoD is facing cuts of 8% - less than most other departments but enough to mean 42,000 service personnel and civil servants will lose their jobs over the next five years and high-profile equipment such as Harrier jump jets, the Ark Royal aircraft carrier and Nimrod spy planes will be scrapped.

The BBC has been told it must freeze the licence fee for six years and take over the cost of the World Service, currently funded by the Foreign Office, and the Welsh language TV channel S4C. This adds up to an estimated 16% cut in the BBC's budget in real terms.

The chancellor insists tough action on spending is needed to stave off a debt crisis - and that the private sector will create new jobs to fill the void.

Labour would also have had to make major cuts if it had won the general election, but the party insists Mr Osborne's plans are too aggressive and risk tipping the country into a "double dip" recession.
Continue reading the main story


A special BBC News season examining the approaching cuts to public sector spending
The Spending Review: Making It Clear

Labour leader Ed Miliband accused the chancellor of taking an "irresponsible gamble with our economy and, indeed, many of the frontline services people rely on."

Health spending and international development will also be protected from cuts - and Mr Osborne has pledged funding for big infrastructure projects like London's Crossrail project and the Mersey Gateway road bridge between Runcorn and Widnes.

But Energy Secretary Chris Huhne has confirmed a £30bn 10-mile barrage across the Severn estuary, intended to generate renewable electricity, has been axed on the grounds of cost.

What is your reaction to the cuts already announced? Will you be watching the chancellor's statement? Send us your comments using the form below and if you are willing to be interviewed by the BBC, please leave a contact number. It will not be published.

At no time should you endanger yourself or others, take any unnecessary risks or infringe any laws. In most cases a selection of your comments will be published, displaying your name as you provide it and location unless you state otherwise. But your contact details will never be published.