Alistair Darling has backed up a pledge by Prime Minister Gordon Brown to abolish around 120 quangos and reduce consultancy fees as part of the pre-Budget report unveiled in the House of Commons.

On 7 December, Brown confirmed that the government will look to save more than £650m by cutting back on work handed to consultancies and around £500m each year by axing 123 of the 752 non-departmental organisations. In his pre-Budget report to the House of Commons, Darling on 9 December also reiterated plans to sell off publicly-held assets, such as the Dartford Bridge river crossing, the Channel Tunnel rail link and the Tote bookmaker.

The report, making reference to the Prime Minister's Putting the Frontline First: smarter government strategy, outlined measures to streamline the number of Arms Length Bodies (ALBs) and axe more than 120 bodies performing advisory roles. A review, which is due to be submitted by next year's Budget, will put forward more options for rationalising the number of ALBs that could see up to a third of DCMS non-museum organisations axed and ten further bodies streamlined, as well as the planned merger between UK Film Council and the British Film Institute.

Around 30 publicly-funded quangos operating in the skills sector could be closed over the next three years, while four existing military museums could be merged to form the new National Museum of the Royal Navy. Darling said: "This week, we announced our plans to deliver another round of savings, amounting to £12bn a year by 2013-14 - abolishing quangos, cutting consultancy and marketing costs, improving procurement and streamlining back-office functions. And we will sell those assets that can be managed better by the private sector.

"We have begun a root and branch review to examine every area of government spending to drive through efficiency, cut waste and cut lower priority budgets." Other plans outlined by the Chancellor for next year's Budget include a reduction in bingo duty from 22 to 20 per cent, although there are currently no plans to alter VAT after it returns to 17.5 per cent on 1 January 2010.

Financial support will be offered to up to 10,000 undergraduate students from low-income backgrounds to receive places on short-term vocational internships, while regeneration spending will be refocused to ensure it is spent where "most needed". Professional services firm Deloitte has welcomed Darling's decision to reduce duty on bingo, which was increased from 15 to 22 per cent earlier this year.

Anbreen Khan, director at Deloitte's Indirect Tax Practice, said: "Although the cut is only two percentage points, it shows that the government is paying heed to a strong campaign from the industry about shouldering a significant burden of taxation." However, Daniel Anning, a partner at property consultants Gerald Eve, said: "While this will be perceived as a positive move by some, it is important to recognise that the rate of tax applied to sport betting, betting exchanges, casino games (in most casinos), internet gambling (including internet bingo) and football pools is levied at 15 per cent."

"Given that more than 100 bingo clubs have recently closed, and that the Bingo Association calculates that four bingo clubs a month have closed since the Budget in April 2009, I would say this tax reduction is far too little far too late." Meanwhile, the British Beer and Pub Association (BBPA) has raised concerns that the forthcoming increase in VAT will lead to six pence added to an average pint of beer and puts further pressure on publicans across the UK.

BBPA chief executive Brigid Simmonds said: "The industry had to endure an 8 per cent increase in beer duty last December, which cancelled out the VAT cut enjoyed by every other sector. Since the Budget of 2008, our tax bill has gone up by £600m in one of the deepest and longest recessions in living memory."