Government departments have been ordered to prepare for cuts of up to 40% as George Osborne fired the first shot in the latest Whitehall spending review.
The Chancellor warned ministers in unprotected departments would be expected to deliver “more for less” in the Government’s drive to save £20 billion over the next four years.
However, the SNP slammed plans to cut infrastructure spending as part of his “misguided plans”.
Treasury Chief Secretary Greg Hands is writing to departments to set out plans to achieve savings of 25% and 40% by 2019-20, a repeat of what happened at the start of the last parliament in 2010.
As part of the efficiency drive, Mr Osborne has signalled that he wants departments to draw up plans to sell off billions of pounds worth of land and other public sector assets.
A document setting out the scope of the spending review, which will report on November 25, confirmed additional investment in the NHS and defence.
However, officials pointed out that the Ministry of Defence alone currently owns around 1% of all the land in the UK.
Mr Osborne said the further savings which follow the £12bn in welfare cuts and £5bn from tackling tax avoidance announced in the Budget will complete the Conservatives’ plan to eliminate the deficit.
He said: “We have shown with careful management of public money we can get more for less and give working people real control over the decisions that affect them and their communities.”
SNP finance spokesman Stewart Hosie said: “The success of any economic plan, long term or otherwise, and the potential to improve future productivity is driven in part by sustained infrastructure capital investment.
“It is therefore very concerning that the Chancellor has chosen to cut capital expenditure every year from 2015-16 through to 2019-20, rather than invest for the future.
“George Osborne is also undermining the potential for improved productivity, and even his own economic plan, by reducing vital capital expenditure every year in his misguided plans.”
The Chancellor said the Scottish Government would soon be able to raise taxes to pay for additional spending.