In the much-trailed statement, the Chancellor will say this investment is to be funded in part by departmental savings over the next two-and-a-half years.

Whitehall departments will be asked to cut day-to-day spending by 1% – around £950m – in 2013/14 and 2% – about £2.5bn – in 2014/15.

Most of these savings will come from cuts to back office functions, a government spokesman said.

Osborne will also update Parliament on the nation’s finances, with expectations high that figures from Office for Budget Responsibility will show growth forecasts pared back.

“We are committed to solving today’s problems, but also preparing for tomorrow’s challenges by investing in our future and equipping Britain for the global race,” a Treasury spokesman said.

The Chancellor is also expected to announce changes to the way Private Finance Initiative (PFI) projects are funded.

The government said changes would mean the new scheme, called PFI2, would be quicker, more transparent, and less generous to private companies.

The plans would see taxpayers take a share of up to 49% in new projects, meaning they would share in profits from public infrastructure projects.