Israeli government spending on West Bank settlements has increased by 38% under prime minister Binyamin Netanyahu, according to official figures disclosed as the cabinet voted to implement an austerity package of tax increases and budget cuts.

According to data from the Central Bureau of Statistics, obtained by the business newspaper Calcalist, spending on Jewish settlements in the West Bank was 1.1bn shekels (£160m) in 2011, up from 0.8bn the previous two years. The overall state budget increased by 2.7% in 2011, Calcalist reported.

Last year's figure was well below a 2003 high of 2.1bn shekels, but since then there has been a steady decrease in settlement spending until 2011.

The money mainly goes on housing, education and services, such as transport and utilities. It does not include security costs.

According to a spokesperson for the Settler Council quoted by Calcalist, the Jewish population in the West Bank has grown at a rate of 5% a year, almost two and a half times the population growth of Israel.

In one area of West Bank settlements alone, "there has been a rise of 10-15% in the number of children entering the first grade every year," said the spokesperson. "That requires additional infrastructure, kindergartens, schools and transportation. The rise in the budget stems from the rise in the size of the population."

In a separate report, Peace Now, an Israeli organisation which monitors settlement growth, said the Israeli government could make savings of 1.6bn shekels if spending per capita on settlers was equal to that spent on citizens of Israel.

Figures from Israel's population registry, released last week, showed a 4.5% increase in Jewish settlers in the West Bank in the past 12 months, to a total that exceeds 350,000 for the first time and which has almost doubled in the past 12 years. There are additional 300,000 Jewish residents in settlements across the pre-1967 line in Jerusalem. All settlements are illegal under international law.

The Israeli cabinet approved a package of cuts and tax increases on Monday in a move intended to "protect the Israeli economy and citizens' jobs," according to Netanyahu. Last summer there were widespread protests in Israel over the cost of living.