Spending Review 2015: What we know so far

George Osborne's Autumn Statement and Spending Review will detail some of the deepest cuts to public spending in recent memory.

Here's what we know so far.

The Chancellor will set out how he intends to slice £20 billion from spending and £12 billion from welfare – as well as raising £5 billion in a crackdown on tax avoidance – to meet his commitment to balance the nation's books in five years.

With budgets for the NHS, defence, schools and international aid protected, the Department for Work and Pensions is among a group of Whitehall ministries facing the brunt of cutbacks – alongside the Home Office, Foreign Office, Justice, Business, Environment, Local Government, Transport, Energy and Culture.

Osborne announced at the weekend that he had reached settlements with all of the non-protected departments, which had been asked to provide plans to deliver savings of 25%-40% towards the £20 billion cuts pencilled in by 2020.

Exactly how those reductions are shared out will be at the heart of the Spending Review and will determine the shape of Britain's public sector in the years to come.

There have been warnings of redundancies – including as many as 20,000 police – closure of government offices, cuts to arts funding and green energy subsidies and the abolition of a number of quangos.

Tax credits

Osborne's task is made all the more difficult by last month's House of Lords defeat over plans to save £4.4 billion from tax credits.

He has agreed to tweak the proposals to soften their impact on claimants – many of them low-paid workers – but no firm details have surfaced on what relief he can offer or how he will fund it.

The Chancellor reportedly rowed with Work and Pensions Secretary Iain Duncan Smith over suggestions he could achieve savings by making universal credit less generous instead, while there has also been speculation he could plug some of the gap by targeting housing benefit or putting a squeeze on tax reliefs.

Meanwhile, union Unison said the economy could lose £3.5 billion a year if the Government presses ahead with its cuts to tax credits.

The average loss per household affected – almost three million, according to Unison – would be £1,300.

Unison general secretary Dave Prentis said: "The Lords might have forced a reluctant Chancellor to think again, but we're not out of the woods yet. Tax credit cuts have not gone away, far from it. Even if the Chancellor announces a pause to their introduction today, it will only be delaying untold financial misery for working families.

"Tax credits are not a luxury, but are quite simply a lifeline for hardworking families. Taking away a large proportion of the tax credits they rely upon will turn their already precarious finances upside down.

"Nearly three million low-income families across the UK will be hoping that the Chancellor has good news for them today. They will want to hear that he's decided against grabbing billions back in tax credits from working parents who are trying to provide a decent start in life for their children."

Borrowing

With borrowing remaining higher than expected, Osborne may be forced to admit he is set to miss his deficit target of £69.5 billion for the current financial year, and the Office for Budget Responsibility could scale down its forecast of a £10 billion surplus by the end of the parliament in 2020.

The Centre for Economics and Business Research (Cebr) said not only will the Chancellor narrowly miss this year's deficit target of £69.5 billion, but he will also fail in his goal to return the UK to a surplus in 2020.

Weaker-than-predicted growth will mean that the UK remains in the red by £20.8 billion in 2020, instead of the Office for Budget Responsibility's forecast in July for a £10 billion surplus, according to the Cebr.

And it believes the deficit will remain at £18.4 billion in 2021, rather than the £11.6 billion surplus predicted in July – effectively leaving Osborne with a £30 billion gap in the finances.

Reducing borrowing

The Chancellor could look to reduce borrowing, in the short term at least, by selling off certain state-owned assets.

Reports last week claimed Osborne had already revived plans to privatise the £1.2 billion Land Registry.

New analysis by the Press Association showed the registry made a profit of £136 million in the 2013/14 financial year, so would likely prove attractive to buyers.

The protected departments

In the protected departments, it is a different story. The weeks leading up to the Autumn Statement and Spending Review have been peppered with announcements of largesse for priority areas.

Prominent among them have been:

A £3.8 billion cash injection for frontline NHS services in England for 2016/17, by which time the Government will have delivered £6 billion of the £10 billion real-terms increase promised by 2020.

A £12 billion hike in funding for military equipment, bringing the total to £178 billion over the next decade.

Spending on counter-terrorism to hit £15.1 billion over the next five years – a 30% increase on what was spent in the previous five.

The SAS and other special forces units to get an additional £2 billion to improve their equipment. An additional 1,900 intelligence staff to be recruited.

Basic state pension to rise 2.9% to £119.30 a week from April, an increase of £174.20 a year.

A new national funding formula for schools in England, to be introduced from 2017/18 to close "arbitrary and unfair" gaps between areas.

Funding for the pupil premium to be held at its current rate of £2.5 billion a year.

£150 million to create a new Dementia Research Institute.

Funding to fight cyber crime doubled to £1.9 billion a year by 2020.

Doubling of spending on aviation security to more than £100 million.