Gordon Brown has kicked off the general election campaign with a pledge to deliver "substantial extra resources" for frontline services.

But the spending comes with the loss of over 100,000 civil service posts - a move which will spark anger amongst some MPs and trade unions.

Implementation of the Gershon review of Whitehall, he said, would lead to £21 billion in savings - allowing cash to be spent in areas such as education and health.

But in a sideswipe at the Conservatives, who have pledged larger savings, Brown said going further could put public service delivery at risk.

Despite the cuts, Brown insisted he would deliver "more investment not less, now and into the next parliament".

Priorities

The chancellor told MPs that he wanted to deliver "rising investment for Britain" to achieve "our priorities and the country’s priorities".

"By insisting on further reform we are able to do even more to get more money to the front line and raise public investment substantially in all our priority areas," he said.

Brown said he would increase spending on public services by an average of 4.1 per cent between now and 2008.

The chancellor told MPs that by the end of the spending review period, the Treasury would hand out £340 billion a year for schools, hospitals and other public services.

Departmental spending - which is £279.3 billion this year will rise to £301.9 billion next year, to £321.4 billion in 2006/07, and £340.5 billion - in 2007/08.

Health boost

More money was announced for health, schools and combating crime.

And he announced more cash for defence, international aid and homeland security.

The aid budget will increase from £3.8 billion this year to £5.3 billion by 2008 - an average annual real terms increase of 9.2 per cent.

But the armed forces, which face a tough time following the Iraq war, have secured an increase of just 1.4 per cent in real terms.

Following intense lobbying the home secretary secured an additional 2.7 per cent - with a new effort to tackle the causes of crime and anti-social behaviour.

Job cuts

Speaking in the Commons, Brown warned that Whitehall would face a dramatic review to reduce the costs of government.

At the centre of the review will be the loss of 104,150 jobs.

Brown said the civil service was set to face a substantial "rationalisation and relocation".

Any future civil service jobs would be based on "a presumption in favour of location in the regions".

And he warned that the culture of sick leave within the civil service would be tackled by a revamp of the system of self-certification.

He said the overhaul would be "ambitious" but was necessary to deliver more cash for frontline public services.

The chancellor also told MPs he planned to implement a substantial sell-off of government assets and land – yielding £30 billion over the next four years.