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Speaking in the House of Commons, Osborne provided some details of the Spending Review and promised that it would leave "no stone unturned in our search for waste".
Back office costs, including quango closures and administrative budgets will produce £6bn in Whitehall savings, double what was pledged, and that has included the recent moves by the Cabinet Office to get IT suppliers to cut their costs.
Government departments had been braced for cuts of between 25% up to 40% but as the details emerged the level of budget trimming were not quite as severe.
"Instead of cuts of 20% there will be cuts of 19% over the four years," he said.
The Cabinet Office is losing £55m from its budget, the Treasury budget will fall by 33%, and the Queen sees her costs reduced by 14% in 2012 after a cash freeze on the Civil List next year.
As expected 490,000 public sector employees will be made redundant and councils will see budgets cut.
The Foreign Office is having its budget slashed by 24% but the commitment to aid remained in place.
Closer to home Police spending is being cut by 4% each year, the Home Office will save 6% each year and the Ministry of Justice is also facing cuts at the same level.
Osborne said the changes would benefit tax payers and produce no visible reduction in service for the public.
Next month departments will publish business plans outlining how the cuts will impact their activities.
Osborne said that it was determined to get the maximum amount of tax out of the banks and was strengthening the role of the Bank of England in cracking down on the excesses in the financial sector.
The state pension age is also going up from 65 to 66 by 2020 but Osborne pledged to provide more help to pensioners. At the same time he pledged to crack down on benefit cheats and reverse the situation that made it not worth working for many living off the welfare state.
Turning into his final section of his speech Osborne said that the private sector was key to keeping the economy going.
Osborne said that it had already helped the private sector by cutting business taxes and by promoting economic stability.
The government has protected the science budget and reasserted its commitment to universities despite the recent high profile debate over the way students will pay for their fees.
But where government money is going is into carbon reduction programmes and green schemes and Osborne said the aim was to make "Britain to be a leader of a new green economy".
The Shadow Chancellor, Alan Johnson, said that there was a political motivation behind the cuts and the government had been pedaling myths about the responsibility for the deficit.