Education and health survive Osborne's spending axe

Chancellor also plans to spend on IT in a £900m battle against benefit fraud and tax evasion

George Osborne: The decisions we have taken since May have taken Britain out of the immediate danger zone

Budgets in the education and health sector have emerged relatively unscathed as chancellor George Osborne today unveiled the results of his comprehensive spending review.

Osborne stressed that the government wanted to protect spending in the areas most likely to fuel private sector growth. Other measures designed to benefit UK Plc include what is, according to the chancellor, the largest-ever financial investment in adult apprenticeships. The government has set aside funding for an extra 75,000 places between now and 2014/15.

The coalition has also put an extra £500m into its regional growth fund, which now has a £1.5bn purse over the next four years. Good news for the IT industry arrived in the shape of Osborne's commitment to setting aside £900m to spend on tackling tax evasion and benefit fraud. A sizeable chunk of this will be spent on technology contracts.

Over the course of the review period, local government is facing the need to trim about 25 per cent from its current spending levels. The government is anticipating that almost half a million public sector jobs will be shed during this time.

In defence, annual spending will drop eight per cent over the next four years to £33bn. The police force faces cuts of four per cent a year from its budget, while the Justice Department and the Home Office will be trimming six per cent each year.

But yearly NHS spending will actually increase from £104bn to £114bn by 2014/15. Annual schools spending will also increase from £35bn to £39bn over this period.

Osborne claimed the review had been centred on the principles of "reform, fairness and growth".

"The decisions we have taken since May have taken Britain out of the immediate danger zone," he said.

But shadow chancellor Alan Johnson said: "Today's reckless gamble with people's livelihoods runs the risk of stifling the fragile recovery."