A Treasury spokesperson said: "The chancellor has asked all departments to deliver savings and efficiencies of 5% of their current budget as part of the first zero-based spending review in seventeen years and every pound of government spending is being interrogated, to root out waste and get the best value for taxpayers.
Some government departments have been asked to make savings which would amount to a 11% cut in spending - as the prime minister faces calls to raise defence spending.
Mr Healey would not say how quickly defence spending would rise but said conversations over the past week with the US defence secretary Pete Hegseth were about the need to go further.
Sky News has been told that departments which do not have their spending protected have been asked to model two options - "flat" spending, which, adjusted for inflation, amounts to a cut; and a deeper reduction amounting to 11% in real terms.
He said the message was "not new", adding: "We know as European nations we need to step up on European security, on defence spending and on Ukraine, especially over the last year we've been doing just that.
