Government departments told to find cuts of up to 6% under £3.5bn savings plan

Whitehall departments have been told to find cuts of up to 6% under plans to shave billions off public spending, the Government has said.

Savings in local government will be used to help meet pressures in over-stretched social care services, according to the Treasury.

NHS and school budgets will remain untouched in the latest round of cost-cutting and the Government will continue to spend at least 2% of national income on defence.

It is also legally obliged to spend 0.7% on overseas aid.

Ministers have ordered departments to draw up proposals for savings of 3% and 6% as part of the "efficiency review" announced last year to find £3.5 billion of savings by 2020.

Treasury minister David Gauke said: "We are committed to a modern, high-quality public sector that delivers the services people need in the most efficient way possible.

"There has been considerable progress, but there is further to go and the whole of Government is working together to consider how we can live within our means while delivering maximum value for every pound of taxpayers' money."

Shadow chancellor John McDonnell said: "For all Hammond's talk of 'resetting' the Tory Government's economic policy last summer, it is now beyond doubt that Hammond represents more of the same Tory austerity.

"Sneaking out an announcement asking departments to model cuts of 3% and 6% for 2019/20 is no way to manage public spending.

"Hammond urgently needs to explain why this announcement was made in the way it was and why, after seven years of failed austerity, he thinks more of the same will now work."