George Osborne briefed the Cabinet this morning on tomorrow’s Autumn Statement, giving ministers some good news and some bad news.

The good news is that he is launching £5 billion of extra capital spending spread over three years as part of the fiscally neutral package tomorrow. That package will fund new schools, science and transport schemes, the Prime Minister’s official spokesman said this morning. He told journalists:

‘The Chancellor and the Chief Secretary have told Cabinet that they will announce at Autumn Statement over £5bn of capital investment to invest in the economy and equip Britain for the global race.’

But the bad news is that this money has to come from somewhere, and Osborne is funding it with a spending squeeze on Whitehall departments, which will be expected to save an extra 1 per cent next year, and then 2 per cent the year after. Significantly, the Health Department will be one that will be unaffected by these cuts.

Sticking with the positive, this is quite good news for Michael Gove, not least because he is getting an extra £1bn for 100 new free schools and academies. But he has also led the way on squeezing his own department, something Fraser detailed in his column a few weeks ago. Gove was cited as an example this morning of a minister who has made savings in his own area, including 1,000 civil service jobs, and yet again ministers will be wanting to follow his lead as they obey George Osborne’s spending squeeze.

Tags: Autumn statement, Michael Gove, Spending cuts, UK politics