Government departments are already looking at how to make efficiency savings this year, Transport Secretary Philip Hammond has said.
Speaking on the Today programme, Mr Hammond praised the creation of the Office of Budget Responsibility, which will provide independent forecasts for economic growth, meant the government could no longer "fix the parameters of the forecast" to fit their own spending plans.
"We know that there is a huge black hole in the public finances," he said.
"Of course there will have to be further reductions in public spending in coming years... The challenge for this government... is to make those spending cuts while protecting frontline services".
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