Spending review: Osborne prepares to unveil cuts

Whitehall street sign and George Osborne Mr Osborne's announcement comes after months of negotiations with Whitehall departments

Chancellor George Osborne is preparing to reveal the biggest programme of cuts in the UK for decades, in his long-awaited spending review.

Average budget reductions of 25% to most Whitehall departments are expected alongside welfare cuts, following months of negotiations with ministers.

Reports suggest nearly 500,000 public sector jobs will go by 2014-15.

On Tuesday 8% cuts to the defence budget were outlined separately in the strategic defence review.

Overall 42,000 jobs - in the Ministry of Defence and in the armed forces - are to go by 2015.

On Wednesday Mr Osborne will outline cuts in other departments which could range between 25% and 40% - with the exception of health and international development - in addition to welfare cuts.

Mr Osborne has already announced plans to stop child benefit payments to higher rate taxpayers.

There had been reports it could be cut altogether for children once they reach the age of 16, rather than 18 as at present, but sources have told the BBC that will not happen.

Chief Secretary to the Treasury Danny Alexander was photographed carrying the spending review on Tuesday - two pages of which were visible to photographers. It stated that tackling the deficit was "unavoidable" and there would be an "inevitable impact" on state workers.

Summer negotiations

While it said the wage freeze and flexibility over hours would help minimise redundancies, it suggested a forecast that there would be 490,000 fewer public sector workers by 2014-15 had been adopted by the government.

Chief Secretary to the Treasury Danny Alexander Danny Alexander's documents suggested a 490,000 cut in the public sector workforce by 2014-15

Thousands of protesters gathered in Westminster on Tuesday to lobby MPs ahead of the announcement. Dave Prentis, general secretary of the Unison union, said the coalition government was "taking a chainsaw to our public services ... not because of a deficit, but because of an ideology".

The chancellor and Prime Minister David Cameron finalised the spending review package in a series of meetings with deputy PM Nick Clegg and Danny Alexander at Chequers at the weekend.

It follows lengthy negotiations with cabinet colleagues over the summer.

BBC political editor Nick Robinson said Mr Osborne would outline percentage cuts in certain departments and there could be some illustrations of projects that have had to be abandoned and details of overall numbers of prison places to be cut.

But he said details of which specific jobs and services could be axed were unlikely.

The document Mr Alexander had been photographed with had shown that if there were voluntary agreements on public sector pay and hours, job losses could be reduced.

'Very clear promise'

Further speculation suggested the BBC might be made to cover the cost of free TV licences for the over-75s - currently covered by the government - but it is understood this will not happen.

Instead it has emerged the BBC licence fee will be frozen for the next six years - and the corporation is to take over the cost of the World Service, currently funded by the Foreign Office, and the Welsh language TV channel S4C.

Union worker protesting against spending cuts Unions held a mass rally ahead of the Spending Review announcements

There have been several reports that winter fuel allowance, free TV licences and bus passes for the elderly could be curtailed - David Cameron has said he wants to stand by his "very clear promise" during the election campaign, in which he pledged that a Conservative government would keep all three.

The BBC understands that the schools budget in England will be spared large cuts but the social housing budget in England is to be halved and organisations representing rank-and-file police officers fear thousands of jobs will go.

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

But Mr Osborne has pledged funding for big infrastructure projects like London's Crossrail project and the Mersey Gateway road bridge between Runcorn and Widnes - as well as the Synchotron scientific facility in Oxfordshire.

Deputy PM Nick Clegg told Lib Dem MPs on Tuesday that the spending review has involved "difficult decisions" but that it "provides the best evidence yet of why we are in government".

He said the decisions taken were the right ones "to build a fairer and more liberal Britain".

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