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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.

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