George Osborne is unveiling the government’s economic forecasts and spending plans for the next four years in the House of Commons.
Health, schools and defence spending will go up – but police, local councils and other areas face big cuts.
The chancellor must also find extra cash after his plans to cut £4.4bn from tax credits were blocked.
He earlier announced plans to hand billions to private developers to build 400,000 new homes in England.
Mr Osborne is using his Autumn Statement and Spending Review to detail £20bn in budget cuts affecting a string of government departments – and £12bn in welfare cuts.
He hopes to raise £5bn in a fresh crackdown on tax avoidance as part of his efforts to balance the nation’s books by the next election in 2020.
Speculation is rife about how he will find the cash to phase in tax credit cuts, after the House of Lords rejected his plans to slash the benefit payments to low paid workers from April.