The government is seeking another £16bn in spending cuts of current or “resource” spending by 2020, according to an IFS analysis of its plans.

Separately from that, the Treasury is seeking £12bn in cuts to welfare spending, from tax credits managed by HMRC and other benefits administered by the Department for Work and Pensions. Capital spending on big-ticket investments such as road and rail improvements is protected.



A number of departments, including health, international development and defence, as well as part of the schools budget are also ringfenced. This means other departments are facing cuts of up to 40%, which are likely to lead to large reductions in Whitehall staff numbers.

Cuts agreed

Treasury

Osborne’s own department oversees HMRC, which is responsible for tax credit spending. The department has already agreed to resource spending cuts of 30% but is still working out how to reduce the impact of a plan for £4bn of cuts to tax credits that was rejected by the House of Lords.

Communities and Local Government

DCLG has agreed to cuts of about 30% over the next four years. This is separate to funding for local government, and is likely to involve the closure of what the Treasury refers to as “low-value programmes”.

George Osborne at Manchester Victoria Station, on the Manchester to Liverpool line where electrification has recently been completed. Capital spending is protected. Photograph: Stefan Rousseau/PA

Transport

Cuts of 30% have been agreed to the DfT’s current budget over the next four years. It could affect sustainable transport and funding for buses, walking and cycling programmes. Capital spending is protected so big investments in road and rail will go ahead as planned.

Environment, Food and Rural Affairs

Cuts of 30% have been agreed, with the department expected to scale back the extent of its footprint while trying to prioritise spending on flood and disease prevention.

Still negotiating

Education

The Conservatives promised to protect spending per pupil at the general election. This leaves a slim amount of spending available for cuts, including post-16 learning, early years and universal free school meals for infants. David Cameron has already indicated he wants the meals to remain because it was a Conservative manifesto pledge.

Free school meals. David Cameron has already indicated he wants the meals to remain. Photograph: Graeme Robertson/The Guardian

Business, Innovation and Skills

There are potentially rich pickings for the chancellor at BIS, which has a resource budget of around £13bn. There had been talk of abolishing BIS altogether, but business secretary, Sajid Javid, has said that would be a backwards step. However, he has identified areas for savings in consolidating the BIS estate, which has 80 sites. Higher education, further education, research funding and grants for business could all be in the firing line.



Home Office

The department has a big resource budget of around £10bn but police chiefs have been warning of dire consequences if this leads to a need to reduce the number of officers. Theresa May, the home secretary, has said she believes there is more scope for collaboration between forces but it is said she has been fighting hard behind the scenes against accepting the scale of cuts due to hit most departments.



Justice

Michael Gove, the justice secretary, has struck a deal to build nine new prisons and sell off the old estates for housing. The level of cuts to his resource budget of around £6bn is not yet public but Gove has signalled he would like to save money by reducing the number of people in prison.

Foreign and Commonwealth Office

The FCO budget is only small at around £2bn so cuts at the pace of other departments could bite hard. Philip Hammond, the foreign secretary, is said to be trying to hold out against the prospect of having to close embassies.



Energy and Climate Change

The department has a small resource budget and it is likely to find remaining subsidies for green energy – such as the renewable heat incentive – coming under pressure or scrapped altogether.

Culture, Media and Sport

The department could further cut grants for the arts, with lottery money potentially expected to make up the shortfall.

Ringfenced

Health

The department is ringfenced and its budget will grow, but it will still have to make efficiency savings because of rapidly rising demand for services thanks to an ageing population. The chancellor has pledged to spend an extra £8bn on the NHS by 2020.



Spending on foreign aid is ringfenced at 0.7% of GDP. Photograph: Neil Bryden/RAF/EPA

Defence

Cameron has committed to the Nato target of spending 2% of national income on defence, meaning the budget will rise over the parliament.

International Development

Spending on foreign aid is ringfenced at 0.7% of GDP. However, it might be possible for some spending from other departments, particularly on climate change, the FCO or conflict prevention, to creep into overseas aid spending.

