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.
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.
The cuts would have been less painful had the coalition not ring-fenced some large departments. So where does that leave everybody else?