George Osborne defends 'progressive' spending review George Osborne has defended the government's spending review from accusations that it was an election call to people who do not wish to help the poorest and most disadvantaged in society. The chancellor said his unexpected package of welfare reforms - including the extension of the current three-day wait before the jobless can claim benefits to seven days - were part of a "progressive" package. He also said it would be possible to achieve £5bn of the sought-after savings through efficiencies. Asked if he was setting out to appeal to those who wished to rebalance the state towards the "median worker" and away from poorer people, Osborne told Radio 4's Today programme: "I don't accept that at all. A Conservative and Liberal Democrat government is undertaking progressive reform to our public services to help low-income people and those from disadvantaged backgrounds to aspire to a better career, better healthcare and education. The Labour party took the view that they would transfer income with the tax credit system. That was a) unaffordable for the country and b) I don't see that it actually increased social mobility in this country. Our approach is very different, which is get into the root cause of the problems - poor educational attainment, dysfunctional communities and families and a social care system trapped between welfare and the NHS. On Thursday, ministers will set out plans for an extra £300bn in capital spending, excluding depreciation, between now and 2020, including £50bn in 2015-16 on affordable housing, roads and rail. There will, however, be no actual increase in capital spending in comparison with 2014's £50bn budget, merely an earmarking of where it will go. In his speech on Wednesday unveiling the results of his spending review for 2015-16 Osborne said the economy was moving from rescue to recovery, but he also set out a fifth, unscheduled year of austerity. Osborne's welfare reforms, and his confirmation that he was ending automatic pay rises for employees in the public sector, were a bid to grab headlines and push Labour into a corner before the 2015 election. He also said he would require jobseekers to attend jobcentres weekly rather than fortnightly, and order lone parents with children aged three and four to prepare for work. Some non-native speakers of English will be required to attend language classes as a condition of claiming benefit, with the Treasury indicating the measure could affect 100,000 people. The total package will save £425m, Osborne said, sidestepping the Liberal Democrat insistence that welfare benefits be cut no further. The shadow chancellor, Ed Balls, accused Osborne of inflicting "more cuts to the police, more cuts to our local services." He said: "This out-of-touch chancellor has failed, and families and business are paying the price for this failure." Pointing out that Osborne had forecast the economy would grow by 6%, Balls said the chancellor had promised that "we are all in this together" but then lowered taxes for millionaires. He told MPs: "His friends call him George, the president [Obama] calls him Jeffrey, but everyone else calls him Bungle!" Critics said the move was a gimmick. Ian Mulhearn, the director of the Social Market Foundation, said: "Welfare cuts already in place mean that in the years ahead spending on working-age benefits will be flat. In a sign that capital spending can bring other problems, it emerged in a separate Commons debate that the cost of the controversial HS2 high-speed rail link had soared by £10bn, or 30%, to £42.6bn. Local government will be the biggest loser in 2015-16 in financial terms, taking a £2.6bn cut. Vince Cable's business department will be required to make £800m of resource savings, the Ministry of Justice £700m, the Home Office £600m, and the Ministry of Defence and Department for Education both £500m. Osborne did, however, promise that the defence cuts would not affect manpower or equipment. In percentage terms, the Treasury, the Cabinet Office, local government, and the culture, transport, justice, work and pensions and environment departments will all suffer cuts of over 7% in 2015-16. Overall local government spending has already been cut by 27%, with at least another two years of even more severe cuts to come in Britain's town halls. Cable, the last cabinet minister to approve Osborne's review, insisted on a combined capital and current spending package and believes he has protected the central mission of the business department, with the science budget protected in cash terms. Osborne also set out a series of long-term radical reforms to the public sector in an attempt to show he was not just salami slicing in the face of lower-than-expected growth and rising borrowing. The chancellor also promised a new national funding formula for schools in an effort to iron out the big differences in financial support between regions, which in some cases amount to thousands of pounds per pupil. Experts, however, warned that the move would inevitably create winners and losers as resources are shifted.