The jobs freeze will be a severe setback for students who are due to graduate this summer and were looking towards a civil service career, but the future is equally bleak for about 300,000 public employees who could face the sack as the coalition Government slices into what it regards as wasteful public spending.
The proposed cuts will be set out in an emergency package which Mr Osborne and his Liberal Democrat deputy, David Laws, will publish today. They have calculated that banning recruitment of new civil servants will save £163m a year, on top of £513m worth of cuts to be found by abolishing or reducing government quangos.
Almost the only state employees who can feel safe from the Chancellor's axe are the police, who will receive a promise that their numbers will not be affected. Troops stationed in Afghanistan also received a promise yesterday that they would be fully equipped, and that the Tories would keep a promise to double their tax-free operational allowance, currently worth around £100 a week. The promises were made by the Defence Minister, Liam Fox, who was in Afghanistan.
Treasury staff have been trawling through government departments hunting for examples of extravagance which can be eliminated without harming core public services. Civil servants' perks, inefficiently run call centres and helplines, a strategy for helping children learn to play, and a government magazine that is distributed worldwide by airmail all feature on the target list, though not all are going to be addressed in today's announcement, either because the money has already been spent or because they have only just been uncovered.
Restricting the numbers of civil servants who travel first class by rail alone is expected to save £10m a year. Government employees spend more than £3bn a year on travel, including £125m on taxis, and £70m on flights. The Home Office alone spends £11m a year on flights, and the Cabinet Office £7m. Another £320m a year is spent on hotels. Mr Osborne wants to see all these figures drastically cut.
Many of the 271 offices run by HM Revenue and Customs, where members of the public can walk in and ask for help with their tax returns, are to be closed. Some are reported to be receiving as few as 11 visits a week.
Revenue and Customs will also be told to end its practice of employing a fixed number of people to answer telephone enquiries all year round. Instead, it must take on casual staff towards the end of the tax year, when the number of enquiries reaches a peak, and dispense with them in April.
Two other departments that take a large number of calls from the public will also be told they have got to close down hundreds of underused telephone lines. A study has found 573 telephone numbers belonging to the Department of Health and the Department of Work and Pensions that are never used by the public at all.
Consumer Direct, the telephone advice service run by the Office of Fair Trading, will have to cut back on its network of 68 regional call centres, and the Department of Education is expected to be told to close down its £5m-a-year Play Strategy which "outlines the short, medium and long-term objectives in bringing to life children's right to play".
Regional government offices will be told to scrap the networking meetings where officials from different departments get to know one another, which costs £1m a year. Central and local government will have to cut the amount they spend on consultants and temporary staff, which cost the Government £2bn, and local councils £2.5bn.
The International Development Department will be told to find a less costly way to produce and distribute its in-house magazine, which costs more than £500,000 a year. Sending it out worldwide by airmail put the postage costs alone above £60,000.
Mr Osborne and Mr Laws will face an angry House of Commons after Parliament officially resumes business tomorrow. They will be accused by Labour of threatening to plunge the country into a "double dip" recession by imposing job cuts at a time of high unemployment.
With the Department of Business, led by the Liberal Democrat deputy leader Vince Cable, expected to bear the heaviest share of the cuts, Labour's Treasury spokesman Liam Byrne warned yesterday: "Cuts to regional development agencies, university places and research risk putting Britain in the slow lane to recovery."
The general secretary of the TUC, Brendan Barber, issued a similar warning. "Taking any money out of the economy at the moment is dangerous as there is a real risk of a double dip recession, which will only damage the state of the public finances further."
But Digby Jones, the former director general of the CBI who served as a trade minister in the Labour government, wanted Mr Osborne to range wider over government departments in the search for cuts. He claimed that "we all know" there is inefficiency within the NHS, which is not having its budget cut. He also claimed people would be "incandescent" if they knew what happened to some of the money spent on overseas aid.
Mr Laws will also face accusations that he is collaborating in an exercise which the Liberal Democrats opposed when they were fighting the election. In their election manifesto, they warned that making heavy cuts immediately could harm economic recovery.
And there will be questions about a leaked draft of the Queen's Speech in The Sunday Telegraph. Rosie Winterton, Labour's shadow Leader of the Commons, said: "If it is right that details of the Queen's Speech have been given to Sunday newspapers before it has been submitted to Parliament, the new Government will have to explain their apparent attitude of disregard."
Counting the savings
£163m The amount George Osborne thinks he can save in a year through a freeze on civil service recruitment
£513m Amount to be saved by cutting quangos
£6bn The target for the total savings package
573 The number of phone lines operated by two departments that no one ever uses
300,000 Whitehall and public sector workers who may lose their jobs
£11m The bill for flights last year made by officials from the Home Office
2011 The earliest that the cuts could begin, according to the Lib Dem manifesto
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