The Government unveiled a raft of measures to boost infrastructure, support the housing market and cut the deficit in chancellor George Osborne's Budget, which was announced today.

Government department underspends will be used to fund infrastructure projects in plans unveiled by the Chancellor in his budget speech. George Osborne told parliament that government departments are expected to underspend by more than £11bn this year.

‘By using our extra savings from government departments, we will boost our infrastructure plans by £3bn a year from 2015-16. That's £15bn of extra capital spending over the next decade.'

Public sector debt is forecast to increase from 75.9% this year to 85.6% in 2016/17 before slipping back to 84.8% the next year.

Borrowing will be around £61bn higher than originally predicted by the Office for Budget Responsibility over the next six years, decreasing steadily from £114bn this year, £108bn in 2014/15, then £97bn, £87bn, £61bn, £42bn by 2020.

He added: ‘Both next year and the year after, we will reduce resource departmental expenditure limits by the equivalent to a 1% reduction for most departments.' However, local government allocations are pre-set and will not be affected.

The Chancellor announced he would limit public sector pay increases by an average of 1% in 2015-16. While he has no control over local government pay, the allocation of cash from central government for pay rises will be limited. He said: ‘Local government and devolved administration budgets will be adjusted accordingly in the spending round.'

Local government workers will also face the extra burden of increased national insurance contributions toward their pensions – although they will be rewarded with a larger pension on retirement.

As local government continues to face further cuts to budgets to staff, the Chancellor pointed out: ‘For every job lost in the public sector, six jobs have been created in the private.'

Other measures in the Budget included: