The independent Institute for Fiscal Studies (IFS) has warned that further welfare cuts and tax rises are "on the cards" if the Chancellor is to meet the debt targets set out in Wednesday's Autumn Statement.
The respected thinktank says that if school and NHS budgets are to continue to be protected then by 2018 other government departments will have to face real term cuts of 16%.
This is equivalent to cuts of 30% since 2010, which the IFS describes as "inconceivable".
Chancellor George Osborne and Danny Alexander, Chief Secretary to the Treasury
In order to protect departmental budgets, the government would have to raise £27bn from welfare cuts and tax rises.
The IFS describes the announcement that austerity will now last up to seven years as "unprecedented, itself superseding the unprecedented five years originally announced."
It adds: "There are big choices on health and welfare, crucially surely including benefits for pensioners, still to be made.
"And it is hard to believe that there won’t be more tax rises to come."
The IFS was highly critical of the protracted decision to finally "lay to rest" the planned fuel duty ris: "this is no way to make policy".
Its report also highlights that this year's predicted fall in the borrowing is heavily reliant on the one-off injection of cash from the (as-yet-uncompleted) sale of the 4G mobile phone spectrum.
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