Chancellor Gordon Brown has outlined plans to axe more than 104,000 civil service jobs across the UK as he set out his three year spending plans.
This is Mr Brown's fourth spending review
He told MPs 84,150 Whitehall jobs would go - plus 20,000 from English councils and the devolved Scotland, Wales and Northern Ireland authorities.
The money saved will be freed to be spent on education, health, defence, housing and overseas aid, he said.
Unions predicted "carnage" for public services and warned of strike action.
The 84,150 Whitehall job cuts come out of a current total of 465,700.
Public and Commercial Services union general secretary Mark Serwotka said: "When this government was elected they imposed the windfall tax to pay for initiatives like the New Deal, now they are using their own workforce to pay for their policies."
Jonathan Baume, general secretary of the First Division Association, which represents senior civil servants, said the job cuts risked "seriously damaging" civil service's ability to develop and implement new policies.
Conservative shadow chancellor Oliver Letwin branded Mr Brown's plans a "manifesto for fat government and fake savings" which would lead to more bureaucracy, more targets, more initiatives, more taskforces, more regulation, more borrowing and more taxes.
Mr Brown said that 20,030 civil service jobs would be relocated from London to the regions, including 5,000 treasury staff.
He also pledged a crackdown on absenteeism and sick leave without a doctor's note.
The Department of Trade and Industry will see its running costs cut by 15%, while the Department of Work and Pensions will see its fall by 9%.
Mr Brown will also order government departments to sell off £30bn worth of buildings and other assets.
PLANNED JOB CUTS
Education - 1,960
Health - 720
Transport - 700
ODPM - 400
Home Office - 2,700
Constitutional Affairs - 1,100
Law Officers Dept - 50
Defence - 15,000
Foreign Office - 310
International development - 170
DTI - 1,280
DEFRA - 2,400
DCMS - 30
Work and Pensions - 40,000
Northern Ireland - 130
Chancellor's Depts - 16,850
Cabinet Office - 150
UK Trade and Investment - 200
The job cuts include the 40,000 redundancies already announced by Mr Brown in his budget earlier this year.
Mr Brown told MPs: "I can tell you it is a painful process. We regret the fact that people have to lose their jobs. We are helping people get new jobs.
"It is really does nobody any good for the Conservatives to suggest that big change that is taking place and has to take place is not actually happening."
Mr Brown said the cuts, plus other efficiency measures would help save £21.5bn a year for frontline public services.
In addition, savings made from low unemployment and debt payments meant spending on services would increase by 4.2% above inflation over three years, Mr Brown said.
Mr Letwin, for the Tories, said: "When will the chancellor admit he has been spending beyond his means and that that policy will mean third term tax rises under Labour?"
OTHER SPENDING PLEDGES
A 5.8% rise in science funding, in real terms
2.3% increase in culture spending
Extending pilot scheme for free nursery school for two-year-olds
1.4% above inflation increase for BBC World Service
A £20m fund for crime victims
£100m for children's care centres
For the Liberal Democrats, Vincent Cable contrasted Mr Letwin's "slash and burn" tactics with Mr Brown's "more cautious trim and singe approach to public finances".
He said both relied upon the "magic ingredient" of cutting waste.
"If this waste is so easily available, why hasn't it been dealt with already?" he added.
The government has already unveiled big increases in spending on health and education.
Measures set out by the chancellor on Monday include:
- A bigger than expected increase of 1.4% in Defence and
Foreign Office budgets
- A 9.2% increase in real terms in foreign aid, with £1.5bn devoted to combating the "scourge" of HIV/Aids in the developing world
- A 10% increase in security spending
- A 2.7% increase in Home Office spending, with more cash for community wardens and to combat anti-social behaviour
- A 4.5% increase in transport spending in real terms, a faster increase than originally envisaged in the government's 10-year transport plan
- A 2.7% increase in cash for social services. with extra care for the elderly a top priority
Mr Brown also pledged more cash for housing, with about £800m to go on social housing and regeneration projects in the north and Midlands, with the rest to go on subsidising commercial building in the Thames Gateway, Ashford, Milton Keynes and the London-Stansted corridor.
In addition, there will be a £150m fund to provide infrastructure around new housing developments.
The chancellor's spending review - which covers the period 2005/06 to 2007/08 - sets the priorities for Labour's general election manifesto.
The chancellor delivered his fourth spending review following a weekend of speculation about Tony Blair's future.
The prime minister faces a particularly challenging week, with the Butler report into intelligence on Iraq to be published on Wednesday and by-elections in Leicester South and Birmingham Hodge Hill a day later.