Chancellor to squeeze £5bn Whitehall spending to fund fresh schools and roads

U.K. Chancellor, George Osborne

U.K. Chancellor, George Osborne

U.K. Chancellor, George Osborne set to launch new plans that will save £5 billion worth funds by downsizing thousands of Whitehall jobs to raise cash for fresh schools, transport schemes and science.

In Mr. Osborne’s autumn statement in the House of Commons tomorrow, he will order deep cuts to the civil service. He will also ask his colleagues to find more ways to savings as the Education Secretary, Michael Gove has done by cutting more than 1,000 jobs in his department.

The Chancellor briefed the Cabinet to cut day-to-day spending by one percent (£950 million) in 2013-14 and two percent (£2.5 billion) in 2014-15.

Mr. Chancellor has shown his interest in spending these funds on fresh development projects over the next two years including new schools, roads and other infrastructure with the expected plans to build 100 new academies and free schools in the next couple of years.

The Lib Dem Chief Secretary to the Treasury, Danny Alexander has carried out a mid-term review of government spending and found that departments had underspent by a total of £3billion over the last couple of years, recommending there is still more scope for efficiencies.

The cuts are settled to apply directly to England only, but there will be knock-on effects for Scotland, Wales and Northern Ireland under the complicated formula which determines central funding for the different parts of the U.K.

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