Chancellor John Healey has told Cabinet ministers they will have to make cuts as there is no new money to pay for Andy Burnham’s spending commitments.

Confirming that he will deliver his first Budget on 28 October, he said it will “move money and power out of Westminster”

However, the new devolution revolution, cost of living measures and proposed social care service must be financed from within existing budgets.

A pledge to the fiscal rules means a tight rein on borrowing, a move that will reassure the markets that there will be a continuation of tax and spend discipline.

“This government is working fast to restore hope and back Britain’s communities,” he said. “In the past two weeks, we have begun to kickstart growth in every postcode.

“We have backed British jobs, British skills and British businesses and we have provided just a bit of breathing-space for those families and businesses that feel so squeezed, that feel without hope.”

Mr Healey, who is also likely to outline the keenly-watched allocation of funds for defence, added: “Today, I’m confirming the date of my first Budget as Chancellor will be Wednesday 28 October.

“This will be a Budget that moves money and power out of Westminster, and into every postcode around Britain.  

“It will be built on fiscal discipline.  It will meet our fiscal rules. It’ll give businesses and families some of the stability they need to plan for the future. Now, let’s get on with the job.”