Chancellor George Osborne primed for more cuts in Budget
George Osborne has insisted "we need to act now so we don't pay later" as he paved the way for fresh spending cuts in the upcoming Budget.
Savings equivalent to 50p in every £100 the Government spends need to be found by 2020, the Chancellor said.
But the cuts are "not a huge amount in the scheme of things", Mr Osborne told the BBC.
"My message in this Budget is that the world is a more uncertain place than at any time since the financial crisis and we need to act now. We have got to live within our means to stay secure and that's the way we make Britain fit for the future."
Asked about claims the Government is facing an £18bn black hole in its finances, he replied: "£18bn is the sum of money that has been revised off our nominal GDP. In other words, that's a number out there last year because inflation was lower.
"It's a real number in the sense that all around the world people are looking at economic prospects and thinking they are not as rosy as they were a few months ago."
Wednesday's Budget will include plans to build thousands of new homes under a "garden suburbs" programme, according to The Daily Telegraph.
Under the move, councils will be encourage to build small settlements on the outskirts of towns, it reported.
Council leaders insisted they have "more than played their part" in the Government's savings drive and called for Mr Osborne to hand down more powers to them in the statement.
Local Government Association chairman Lord Porter said: "Councils have more than played their part in trying to balance the nation's books in recent years and all councils will have to continue to find substantial savings from local services to plug funding gaps over the next four years.
"Extra council tax powers and transitional funding will help some but won't be enough to completely offset the full impact of funding pressures.
"Giving councils the option to fix longer-term funding settlements has been an important step and rightly recognised by government as being essential to give councils the financial certainty they need to protect local services. It would be perverse to then undermine this with further cuts handed down just one month later."
Mark Atkinson, chief executive of disability charity Scope, warned that disabled people were "anxiously" waiting for the Budget after Mr Osborne defended measures that will cut some disability payments.
"In the past week, the Government has confirmed cutting disability unemployment benefits and announced changes that will make it harder for some disabled people to qualify for the Personal Independence Payment," he said.
"At the same time it has also announced that it is considering a longer-term review of disability benefits. With the Chancellor stating he is looking to find further spending cuts, disabled people will be anxiously awaiting Wednesday's Budget."
Jonathan Isaby, chief executive of the TaxPayers' Alliance, said: "While the Chancellor deserves some credit for steering the economy through difficult times, much of the action which was urgently needed to bring spending down and sort out the nation's finances sadly never took place.
"As well as declaring war on waste and lighting the elusive bonfire of the quangos, big decisions should have been taken to reduce spending for the longer term, including getting rid of 'ring-fenced' spending, scrapping wasteful projects like HS2 and abolishing entire departments like BIS and DCMS.
"What's more, there have been too many missed opportunities to reform pernicious taxes like stamp duty and ineffective ones like corporation tax, and the Chancellor should follow through on his talk of tax simplification. There is no longer any room for complacency in a global economy that is far from settled."
Institute for Fiscal Studies director Paul Johnson played down the significance of the expected announcement of fresh cuts.
"The problem is that the Chancellor, because of the rule that he has given and because he is doing these two financial statements every year, needs to make plans all the way through to always ensure it looks like he's in balance by the end of the Parliament," he told the BBC Radio 4 Today programme.
"One of the things I am guessing he is going to do is say that these cuts will be planned to happen in 2017 or 2018 and then, frankly, hope that the numbers move back in his direction before he actually has to implement them.
"What actually turns out to happen I don't think we will necessarily learn this week.
"Things don't have to change very much at all to reverse this again."