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The Chancellor has made it clear the axe will fall across a wide range of government departments.
ITV News Tyne Tees correspondent, Gregg Easteal, has been looking at more of the detail in George Osbourne's plans:
The biggest cut was made to the department that funds local councils. After three years of cuts, it now faces another 10 per cent reduction.
For authorities like Sunderland, that equates to another £100 million.
Watch Dan Ashby's report here:
The Chancellor George Osborne has been accused of increasing the gap between the North and South as he announced a new round of cuts today, June 26.
In his Spending Review for 2015 he said he would slash the budgets for councils and the Scotland Office by 10 per cent.
But the health service, schools and international aid will not be cut, while there could be new funding for road and rail projects in our region.
Our Political Correspondent Paul Brand watched the Chancellor's statement:
Public sector workers, benefit claimants and expat pensioners were hit as Chancellor George Osborne announced another round of austerity measures.
The Government has announced the department that funds councils is to get one of the biggest cuts in funding, which is likely to affect services right across the region.
Chancellor George Osborne confirmed the Communities and Local Government budget is being reduced by another 10 per cent.
It means councils like Sunderland must save another one £100 million.
The council proposes closing libraries and ending some free school bus services, which has been met with an angry reaction.
The Chancellor has also revealed there will be further job losses by 2016. Around 144,000 more posts are expected to go across the UK. The announcement has been criticised by unions.
George Osborne did stress that for every job lost in the public sector over the last year, five more have been created by private firms.
There will also be a new seven-day wait before claiming unemployment benefits and all job seekers will be required to attend the job centre every week, rather than once a fortnight.
The Chancellor has said there are "three principles to the Spending Round":
- Reform: to get more from every pound we spend.
- Growth: to give Britain the education, enterprise and economic infrastructure it needs to win the global race
- Fairness: making sure we are all in it together by ensuring those with the broadest shoulders bear the largest burden and making sure that the unfairness of the something for nothing culture in our welfare system is changed.
Latest ITV News reports
As the Chancellor announced that councils will be hit the hardest, we went to Wearside to see how people are coping with the cuts.
Find out if you are among the people whose personal finances will be directly affected by George Osborne's Spending Review.