Four government departments including the Department for Transport (DfT) and the Department for Communities and Local Government (DCLG) have provisionally agreed to cut spending by up to 30% over the next four years.
Chancellor George Osborne confirmed the spending plans today but stressed that major infrastructure schemes would not be affected as these cuts did not hit capital budgets.
The DCLG and DfT both help finance transport services across the country and are set to see day-to-day department spending fall by around a third over the parliament. The Treasury and the Department for Environment have also made a deal to cut spending by 8% per year for the next four years.
Mr Osborne said: 'These savings will be achieved by a combination of further efficiencies in departments, closing low value programmes, and focusing on our priorities as a country.
'These provisional settlements apply to the day-to-day resource spending of the central departments - they are not the capital budgets of these departments.'
He added: 'We will continue to invest in the things that make our economy more productive. We will spend £100bn on our infrastructure over the parliament - updating our roads and railways; investing in flood defences to protect our homes and businesses; and delivering superfast broadband across the country.'
Lord Porter, chairman of the Local Government Association, said: 'We hope this is an early indication that DCLG is leading by example by looking at ways to absorb some of the funding cuts it will need to make as part of the Spending Review rather than passing them onto local government. We would encourage other Whitehall departments to follow suit.
'A similar size reduction to core council funding would leave councils facing £16.5bn in funding reductions and increased cost pressures by the end of the decade. This would have a significant impact on the ability of councils to continue protecting the services communities rely on.'