The government is to announce further cuts to most Whitehall departments of two per cent, in order to fund a £2.5bn boost for infrastructure, it has been reported.
The ringfenced departments – health, schools, HMRC and international development - are said to be unaffected, while local government and police budgets will be protected for the first year.
A No 10 spokesman said the cabinet had reached “unanimous agreement” that the move was “the right thing to do”, according to BBC News.
The government has been under intense pressure to boost infrastructure spending, after several successive quarters poor performance in the construction industry.
Business secretary Vince Cable earlier this month called for “crucial” investment into housing and infrastructure.