The government is to announce further spending cuts in Wednesday"s Budget, with the savings going to large-scale infrastructure projects designed to boost economic growth, reports chartered accountant Harris & Co.
Most Whitehall departments will have to cut 2% of their spending over the next two years, amounting to about £2.5bn.
But health, schools and HM Revenue & Customs budgets will be unaffected.
The cuts come on top of the 3% spending reductions announced for the next two years in last year"s Autumn Statement.
In its 2010 spending review, the government originally announced departmental spending cuts averaging 19% - equivalent to £81bn - up to 2014-2015.
Chancellor George Osborne told his colleagues of the new austerity measures at Tuesday"s cabinet meeting.
Overseas aid will also be shielded from the cuts.