Local government is bracing itself for a further squeeze on its budgets when the chancellor announces his spending plans later today.

George Osborne’s Spending Review will outline the government’s overall financial plan up to 2020, with the chancellor still needing to scale back public spending significantly to hit his target of a budget surplus by 2020.

With health, education and defence spending protected, local government, as well as the police and justice, is expected to bear the brunt of the cuts, with the Treasury warning of a 25% to 40% reduction.

The Department of Communities and Local Government (DCLG) has already accepted a 30% cut in its departmental budget, leading to speculation that local government cuts could be higher.

This is on top of the 40% cuts taken out of the sector since 2010/11.

However, speaking to the County Councils’ Network conference in Surrey last week, communities secretary Greg Clark hinted that social care could be protected.

Further news reports have suggested the chancellor could allow a 2% increase in council tax for authorities facing a social care squeeze in a bid to prevent extra pressures being put on the health service.

The chancellor is also expected to announce how much he will put forward for the Better Care Fund after the DCLG and Department of Health announced it would continue into 2016/17.

Devolution is also likely to be prominent in the Spending Review. Despite already announcing several large deals, further announcements are expected today.

Local Government Association chairman, Lord Porter has warned central government will have to step back if it wants devolution to work.

He said: ‘You can’t give me a bunch of responsibilities and then tell me how you want them done, then tell me I’ve got less money to do it.

'If Government really wants to do better for less, the only way to do it is locally.’

Housing is expected to be another key part of the chancellor’s plans as he attempts to boost supply.

However, the plans are expected to focus on housebuilders and home ownership - rather than social housing and local authority supply.

In addition, housing benefit is expected to take a hit as the chancellor attempts to scale back the benefits bill in the aftermath of the tax credits fiasco.

There is also like to be more cash for transport infrastructure, with £300m expected for Crossrail 2 and HS3.