George Osborne makes £2.5billion more cuts to Whitehall departments That will please Theresa May, the Home Secretary, and Eric Pickles, the Local Government Secretary, who have both railed against the cuts to their budgets while other Whitehall departments, such as Health, are spared. Philip Hammond, the Defence Secretary, who has warned that the Armed Forces cannot sustain further cuts, will be spared from the full impact of the latest Treasury demands. The Ministry of Defence will be given special flexibility to roll over unspent money, which the Chancellor believes will more than compensate for the cumulative savings demanded from the department in December's Autumn Statement and tomorrow's Budget. Alongside Vince Cable, the Business Secretary, Mr Hammond, Mrs May and Mr Pickles were all members of the so-called "national union of ministers" vehemently opposing cuts to their departmental budgets. Mr Cable's department has not been spared from the latest round of cuts. Mr Osborne told Cabinet colleagues at this morning's weekly meeting in 10 Downing Street that the savings were made possible because departments have under-spent their budgets this year by more than the historical average, according to forecasts to be published alongside the Budget tomorrow. The Chancellor has decided to take account of this under-spending when setting departmental budgets for the next two years, Cabinet was told. But departments such as environment, energy, transport and justice will have to find the 1 per cent annual savings to day-to-day "resource" budgets in full. In total, Mr Osborne expects the change in spending plans to save the Treasury £2.5 billion over two years. The savings will be a "down payment" on Mr Osborne's Spending Review for 2015/16, to be unveiled in June, delivering around £1.2 billion of the £10 billion spending cuts which he is looking to make in that year.