Government cuts to benefits and education will be more severe than expected says IFS

Government cuts to benefits and education will be a lot more severe than originally outlined because of increased spending on the NHS and things like foreign aid, according to the Institute for Fiscal Studies.

Because of increased spending on the NHS, the government will have to trim more from the likes of education, housing benefit and disability and incapacity benefits.

In advance of the extra summer budget on 8 July, Carl Emmerson, the deputy director of the IFS, said cuts promised by the government will be a lot more severe than they seem on the surface.

"Keeping to these, perhaps seemingly benign, spending totals will actually require deep cuts to some areas of government," he said. "This is because underlying pressures are increasing spending in other areas."

The statement comes one day after the Organisation for Economic Co-operation and Development (OECD) urged Chancellor George Osborne to spread out the planned cuts over a longer period of time.

Catherine Mann, head of economics department of the OECD, gave the global economy a B- in its latest economic outlook and said the "top grade" was in reach and could be achieved by higher investments.

"Stronger investment is needed to revive labour productivity, wages and competitiveness, and to balance the housing market," the report read.

The axe is most likely to fall in social security spending, where the government has to cut £12bn (€16.3bn, $18.5bn), according to the study by the IFS.