Politicians and union leaders say plans in the Budget for £9 billion-worth of efficiency savings a year by 2013-14 will lead to public spending cuts.

Alistair Darling said he had been seeking to find an additional £5 billion of efficiency savings in 2010-11, on top of a total of £30 billion in the current spending review period.

He said he could do this while continuing to invest in public services, but MPs and union leaders said the public sector would suffer.

“Some have argued that we should cut public services immediately, rather than invest and grow our way out of the recession. That would be the wrong thing to do,” Mr Darling said.

“I can confirm that we are able to secure these savings that year, while increasing investment, as planned, for local health services by over five per cent and for schools by over four per cent.”

Reports from five independent reviews Mr Darling set up last year had identified extra efficiencies from 2011 which rise to a further £9billion of additional savings a year by 2013-14, Mr Darling told the Commons.

Unions have been pressing the Government not to cut public spending because of the recession and were anxiously waiting for further details of the efficiency savings.

Labour MP John McDonnell said: “Buried in this Budget is a programme of public expenditure cuts and privatisations never seen before in the history of this country.

“Cutting and privatising jobs in the public sector will simply put more people on the dole, and runs counter to the government’s overall approach of stimulating the economy.”

TUC general secretary Brendan Barber added: “Cuts in public spending – and these are cuts, not efficiency savings – are absolutely wrong at a time when there is a collapse in demand in the private sector.”

The Department of Health said it was contributing £2.3 billion in additional savings as part of the efficiency drive.

The Department’s revenue budget for 2010-11 has been adjusted from £104.6billion to £102.3 billion.

A spokesman said spending was still rising by 18 per cent for the period 2007-08 to 2010-11.

The cuts will be made by the Treasury-led Public Value Programme, better long-term commissioning of services and rolling out new guidance to health organisations on efficiency.

Health Secretary Alan Johnson said: “As well as providing health care and support to those that need it at this crucial time, the NHS is also well placed to help the country through the economic downturn as a major contributor to the overall economy and the country’s largest employer.”

The 1994 Group, which represents 18 universities, said it was concerned that £400 million of efficiency savings to be made by the Department of Innovation, Universities and Skills will have a negative impact on higher education.

Chairman-elect Professor Paul Wellings said: “Cutting higher education funding during a recession is completely the opposite of what the country needs.”