George Osborne will unveil the Autumn Statement 2012 tomorrow which will see the Chancellor announce £5bn funding for schools, transport and science for the next two years, while cutting thousands of Whitehall jobs.

Chancellor’s Autumn Statement will draw inspiration from Education Secretary Michael Gove, who chopped more than 1,000 jobs in his department. In Osborne’s Autumn Statement, he will be seen asking Whitehall departments to cut day-to-day spending by 1% (£950 million) in 2013/14 and 2% (£2.5 billion) in 2014/15.

The new investment will be targeted at transport, skills, science and schools, with an additional £1 billion going towards new schools, funding new places in areas with the greatest need. The autumn budget statement will also see allocations for some 100 new academies and free schools that will be built in the next two years.

The funding for schools comes in addition to the government’s announcement of £2bn Priority School Building Programme, which will fund 261 school rebuilding projects in England over five years. An initial 42 schools, among the most dilapidated, were named in a first wave.

Extra classroom places are likely to relieve some of the increasing pressure on primary schools, particularly in London and the big cities, where a surge in the birth rate has seen primary schools struggling to cope with the rising demand.

Under Autumn Statement 2012, the Chancellor will seek to build more infrastructure by renewing private finance initiatives (PFI) - a Labour government programme that raised money for public projects from businesses.

Osborne has re-designed the scheme as Private Finance 2 (PF2) to offer better value for the taxpayer, with safeguards to make sure companies involved are forced to disclose their profits.

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