Teachers' leaders reacted angrily to the news that education would not be spared from contributing its share towards the average 25 per cent cut in departmental spending. They immediately raised the question of where Education Secretary Michael Gove would find the extra cash necessary to fund the network of Swedish-style independent "free" schools he plans to set up around the country.
Plans for the schools, which would be run by teachers, parents or charities, were unveiled by the Government last week.
In his speech, Chancellor George Osborne exempted only the National Health Service and international aid from an average 25 per cent cut in spending during the next four years. He did concede, though, that education would not necessarily face that percentage of cuts.
Christine Blower, general secretary of the National Union of Teachers, said: "The new Government has acted to undermine its predecessor's achievements in boosting funding levels for schools when it should have acted to invest in education.
"The education department expenditure limits beg the question of where the Government will find the funding for its free schools and academies programmes."
Teachers will also face a two-year pay freeze if they earn more than £21,000, in line with other public sector workers. However, a previously agreed rise of 2.3 per cent – due this September – will go ahead.
Universities are worried they will be singled out for the lion's share of cuts – having already been told they face cuts of £1.3bn this year.