Shadow chancellor says country is ‘sinking in sea of debt’ and outlines plans to raise retirement age, cap pensions and freeze public sector pay to cut costs

The Conservative party will have to save tens of billions of pounds by cutting departmental budgets if it comes to power next year, shadow chancellor George Osborne confirmed today.

Speaking at the Conservative party conference in Manchester, Osborne said the country was “sinking in a sea of debt” and set out plans to cut costs by £23bn over the next parliament.

He said departmental budgets would have “to be set to get more for less across the public sector” through processes including eliminating “failing” programmes and reviewing procurement.

However, Osborne fell short of outlining specific plans for capital spending cuts.

Specific cost-saving measures he mentioned include raising the retirement age to 66, capping government pensions, freezing public sector pay in 2011 and slashing quango and Whitehall administrative costs by one third.