The HM Treasury courtyard, Whitehall, London.

UK Chancellor George Osborne today outlined the coalition government's initial plans for £6.2bn in spending cuts, saying "urgent action" was necessary to address the budget deficit. Today's cuts are one-tenth of the total of £60bn of cuts that is required for an elimination of the £80bn structural deficit. The balance will be made up of tax rises.

Osborne said there would be a civil service recruitment freeze, as well as cuts to IT programmes, property and quangos. Child Trust Funds would be abolished by January but funding for schools and Sure Start would be protected. Osborne's predecessor Alistair Darling said he  must "come clean" on the details and how many jobs were at risk.

Chief secretary to the Treasury David Laws said Child Trust Fund payments would be cut by January and eliminating £250 payments to newborns from the end of the year - -  and the £250 top-up payments at age seven from August  - - would save £320m during the current year. He acknowledged there would be "disappointment to some parents" but said Child Trust Fund money which would have gone to disabled children would instead be used to provide respite care  - - amounting to 8,000 week-long breaks for severely disabled children.

Of the £6.2bn of cuts identified, £500m is to be reinvested in further education, apprenticeships and social housing, leaving a net spending cut of £5.7m. The savings, according to the government, are broken down as follows:

• £1.15bn in "discretionary areas" such as consultancy and travel costs, £95m through savings in IT spending, £1.7bn through delaying/stopping contracts and projects and renegotiating with suppliers

• There will be £170m from reducing property costs, at least £120m from a civil service recruitment freeze and £600m from reducing quango costs and £520m from other "lower value" spend

• The biggest cuts by department are £683m at Transport, £780m at Communities and Local Government, £836m at Business, £670m at Education and £325m Department for Justice

• The devolved administrations in Scotland, Wales and Northern Ireland would have to save £704m although they would have the option of deferring savings until the following year

• And local authorities, which will be expected to save £1.165bn, will be given more "flexibility" to find savings as "ring-fences" around government grants are being removed.

Osborne and Laws did not say how many public sector jobs were expected to go but said the bulk would come from not filling posts as people left them.

Public servants will be stopped from travelling first class and ministers from having a dedicated car and driver - - instead they will be expected to walk, use public transport or pooled cars.

Laws said the cuts were designed to send a "shockwave" through government departments and discourage waste but he said they would protect "as far as is possible" key front line services and protect those on the "lowest incomes."

He will chair an "efficiency and reform group" with Cabinet Office Minister Francis Maude to help push through the savings.

Laws said: "The years of public sector plenty are over, but the more decisively we act the quicker and stronger we can come through these tough times.

"We also promise to cut with care, we are going to be a progressive government even in these tough times."

The years of public sector plenty are over, but the more decisively we act the quicker and stronger we can come through these tough times

- - David Laws, Chief Secretary to the Treasury

Chancellor George Osborne said that unless the government tackled huge public debt, it could derail the economic recovery.

"We need to take urgent action to keep our interest rates lower for longer, to boost confidence in the economy, and protect jobs to show the world we can live within our means.

"We need to tackle the deficit so that our debt repayments don't spiral out of control. And the more we do now the more we can spend on the things that really matter in the years ahead."

The Chancellor told a press conference at the Treasury on Monday that Britain was already spending as much on debt interest as it did on defence, transport or policing. If urgent action was not taken, this sum could rise to the same level as the education budget.

Analysts pointed out it is a small first step in deficit reduction, equivalent to just 0.4% of GDP. The Treasury’s most recent estimate was the UK deficit, under the Maastricht definition, would amount to 11.2% of GDP in this 2010/11 fiscal year.

Former Bank of England Monetary Policy Committee member David Blanchflower in a BBC radio interview said deficit cutting at a time of weak growth “seems to me to be really pushing us towards the death spiral.”

The UK structural deficit  - - that is the borrowing the government has to do to finance spending even after the economy has recovered - - is about 6% of GDP (gross domestic product) - - £80bn in cash terms which has to be found from a combination of spending cuts and tax increases, or the equivalent of the UK’s entire education budget for last year.

As a rule of thumb, the Conservatives have said they plan to achieve the fiscal consolidation four fifths through spending cuts and one fifth through tax rises. In practice, the proportion shouldered by spending cuts is unlikely to be as high, but even so, we could be about  £60bn of cuts. In other words, today’s measures are just a tenth of the pain to come.

The UK's new finance minister outlined plans to cut the country's spending by $9 billion this year. "The key thing for governments and deficits is credibility," Geoff Kendrick from UBS said. "What we're seeing just now is relatively credible." Michael Izza, CEO of ICAEW, and Michael O'Sullivan from Credit Suisse joined the discussion.