Deputy first minister John Swinney has highlighted social housing as an area of concern as Chancellor George Osborne prepares to deliver his Autumn Statement later this week.

The UK government will publish its joint Spending Review and Autumn Statement on Wednesday to set out exactly how it will invest in priority public services and deliver a further £20 billion of savings, something Mr Swinney believes can be achieved without the need for huge public spending cuts.

However, in a letter to the Chancellor, the Scottish finance minister said that it would be “unacceptable” for Mr Osborne to expect the Scottish Government to deliver a similar level of Housing Benefit cuts to the 1 per cent per annum reduction commitment made in England.

The letter reads: “In your Summer Budget, a commitment was made to a 1 per cent per annum reduction in Social Rents in England over the forthcoming Spending Review period which was designed to reduce Housing Benefit costs. Subsequent communication from the Chief Secretary to the Treasury to me indicated that ‘As rent policy in the social rented sector is a devolved matter, we will need to determine a fair way of resolving the cost implications of any difference in approach, ensuring that proportionate savings can be delivered across the UK’

“Since then, Scottish Government officials have had initial discussions with officials in your department, which seem to imply that in the absence of similar change to Social Rents in Scotland, HMT could seek to recover a similar saving from our DEL budget. Social rents in Scotland are already substantially lower than the UK average. Scottish Government housing policy decisions have been a significant factor in maintaining those lower social rents, already driving considerable savings to the Housing Benefit budget over a number of years. It is not possible for the Scottish Government to deliver these cuts in the same manner as in England and a move to seek such a saving would be unacceptable.

“Despite several attempts by the Scottish Government to discuss this proposal, HMT have been unable to provide any further detail on what is being proposed, so I remain unclear on when or how these reductions may apply and I have also not had the opportunity to set out a clear case as to why applying any equivalent reduction in budgets for Scotland is not appropriate. I would welcome the opportunity for Scottish Government officials to have detailed discussions with HMT before any proposal is developed further.”

The Convention of Scottish Local Authorities (Cosla) has also warned that councils could face a half billion pounds of cuts, savings and spending pressures in the coming year.

The local government body said councils were in a “financial straightjacket” and already faced difficult decisions.

Cosla’s finance spokesman Councillor Kevin Keenan said: “I feel it is vital that as Cosla’s finance spokesperson I make both the chancellor in London and Mr Swinney in Edinburgh fully aware of the financial pressures we in local government are up against.

“Scottish local government is already facing nearly half a billion pounds of spending pressures for next year and this is before George Osbourne or John Swinney even have their pencils out.

“For the sake of communities throughout Scotland I can only hope that neither of their pencils are particularly sharp because Scottish local government and the communities we represent cannot really take any more pain.”

He added: “We are already operating within a financial straightjacket in terms of the tools we have at our disposal with things like the council tax freeze restricting our ability to operate.

“Make no mistake councils are going to be faced with making very difficult decisions but this time around we are talking about more than soft targets - we are talking of severe cuts in vital services and job losses in communities and undoubtedly these will impact on the most vulnerable in our society.

“No one in local government wants to see that happen so it is imperative that this message is not only heard by those who control the purse strings but is acted upon.”

Deputy first minister John Swinney said: “In years to come, the additional responsibilities we will get through the Scotland Bill will enable this, and future Scottish Governments, to take a distinctive approach to the challenges we face, to design policies and programmes that align with our vision of a stronger, wealthier and fairer society. When we set out our plans on December 16 they will be driven by our principles of establishing a system that is fair and progressive.

“Despite the positive economic outlook in both Scotland and the UK, it is imperative that the UK government’s Autumn Statement sets out measures to support economic growth and protect households from further austerity.

“With growing opposition – on both sides of the border – to the UK government’s plan for further cuts to public services and social security, and the subsequent impact that will have on families across the country, I have written to the Chancellor of the Exchequer urging him to change course and relax his fiscal mandate.

“I remain extremely concerned over planned tax credit cuts. Such cuts are unacceptable, not only do they cut the incomes of working families across Scotland, on average £1,500 each, but will damage work incentives and inhibit future economic growth.

“We will continue to mitigate the impacts of tax credit cuts using the full powers and resources at our disposal, but we want to use our powers and resources to lift people out of poverty not just continually mitigate as best we can. It is therefore essential that the Chancellor uses his statement to scrap the planned cuts to tax credits.”