Philip Hammond must find an extra £5bn in this year's Whitehall spending review to reverse planned cuts and meet his claim of ending austerity, a leading thinktank has revealed.
The chancellor will have to find billions of pounds in next month's spring statement if he is to spare public services another brutal squeeze and deliver on his promise to end austerity, the Institute for Fiscal Studies (IFS) has warned.
The Institute for Fiscal Studies told the chancellor that funds pledged in last year's budget to boost NHS spending, defence and worldwide aid failed to safeguard local councils and some of the worst-hit government departments from further shortfalls.
"This would slow the pace of the cuts experienced by those areas since 2010, but would by no means represent an "end to austerity".
The IFS report says: "The provisional totals set out in the Autumn Budget imply that day-to-day public service spending will increase by 6.1% (£18.2 billion) between 2018-19 and 2023-24", the IFS report says. And defence and foreign aid spending are protected.
"The chancellor has said that the Spending Review will take place in 2019, and that is the right moment for government to make long term funding decisions", they said.
"We have made clear that health is our number one spending priority by announcing a five-year settlement which will provide an extra £34bn a year for the NHS by 2023-24".
Meanwhile, the IFS said a no-deal Brexit would mean lower growth, requiring either spending cuts or higher taxes.
And it said in the short term the government might need to borrow more to fund a stimulus package to mitigate the impacts for the hardest-hit areas of the economy.
But the IFS said any spending boost to spending would be temporary, and more austerity would eventually be required.
Ben Zaranko, a research economist at the Institute for Fiscal Studies and an author of the report, said there could be more years of austerity for many public services.
Last October the chancellor declared that "austerity is coming to an..."
Brexit uncertainty over the coming weeks is likely to make the situation worse, while the population continues to expand at around 1m people every four years, heaping further pressure on Hammond to find extra funds to meet his promise of ending the austerity programme which began nearly a decade ago.