POLICE chiefs breathed a collective sigh of relief after the Chancellor announced a surprise real terms increase in funding.

It had been widely reported that George Osborne would cut the policing budget, leading to fewer frontline officers, but instead overall spending will rise by £900m by 2020.

North Yorkshire Deputy Chief Constable Tim Madgwick said the move was “very welcome”, while Durham Police and Crime Commissioner Ron Hogg said he was pleased the Government had responded to the calls from Commissioners, Chief Constables and the public.

Julia Mulligan, the North Yorkshire Commissioner, said she was very pleased and Mr Osborne had “done the right thing in backing our police service”.

All warned, however, that the police still faced tough challenges – including the funding formula review, which is currently suspended.

DCC Madgwick said: “There has been a great deal of concern about the potential impact of the Spending Review on the police service in recent months, and it is good that some of that uncertainty has been removed.”

Mr Hogg said Durham Police was the most efficiency force in the country and well placed to cope with changes ahead, but must work with other agencies, who face “major changes” from today’s (Wednesday) Spending Review.

There was also relief the planned £4.4bn cuts to tax credits was abandoned. Tom Blenkinsop, Labour MP for Middlesbrough South and East Cleveland, said the U-turn would come as a relief for thousands of families across Teesside, although he feared it may only be a transitional measure.

James Wharton, the Conservative MP for Stockton South and Northern Powerhouse minister, welcomed several announcements from his Chancellor, saying the Statement showed “the support is there” after a “difficult few months on Teesside”.

However, Stockton North Labour MP Alex Cunningham said the problems facing Teesside had been “all but ignored” and Redcar MP Anna Turley dismissed a “desperate statement by a desperate chancellor”.

She accused the Chancellor of an “assault on public services” and of “smoke and mirrors” on police funding, as it would depend on locally raised precepts.

However, Schools North East welcomed the introduction of a National Funding Formula for schools, while saying the demise of the Education Services Grant and other protections would hit school budgets in other areas.

Skipton and Ripon Conservative MP Julian Smith welcomed Government help for schools to become academies and a pledge to open 500 new free schools and University Technical Colleges.

Dr Laurence Ferry, from Durham University Business School, warned delivering a budget surplus alone was not a “panacea for a sustainable nation” and called for accountability and transparency to ensure public services were achieving value for money.