Cautious welcome for Brown spending plans

Brown’s decision to slash 84,150 civil service jobs in an attempt to cut waste was applauded by lobby groups, as was the devolving of business support groups and other services to a regional level.

Although overall public spending will rise by £61 billion over the next four years, the chancellor claimed that that by reducing waste, the economy would save £21.5 billion a year.

There was also business praise for the extra £2.4 billion investment in the UK’s creaking transport system, which is blamed for hampering small firms by delaying employees.

However, lobby groups warned that the chancellor must see through his promises and implement real reform if companies and the economy were to benefit.

Digby Jones, director-general of the Confederation of British Industry (CBI), said that Brown had taken a big step in the right direction.

“Companies will breathe a sigh of relief that growth in public sector investment is not going to become profligate pre-election spending.

“Business applauds a radical and courageous efficiency plan that will involve implementing decisions that have been ducked for far too long.

“But while this is encouraging, we have heard big promises before. Business will adopt a we’ll-believe-it-when-we-see-it attitude.

“Mr Brown still has to face down vested interests in the trades unions and civil service. He must introduce a credible system for measuring efficiency transparently if business confidence is to be maintained.

“We welcome the extra spending on transport over the next three years. But we will need to see the detail in later announcements to determine whether the new money will address out priorities on roads as well as rail,” he said.

David Frost, director general of the British Chamber of Commerce (BCC), welcomed the new finance for transport and the relocation of business support services.

“However, plenty of funding has gone into transport in recent years, but businesses are not yet seeing anywhere near the level of improvement that they need. Alistair Darling (the transport secretary) must now make sure that this money is targeted where it will make a real difference.

“We are encouraged by the devolution of business support funds to the regions. At the national level, we want to see more funding streams directed away from costly tiers of administration and instead going straight to businesses in the form of training, support, and innovation funding,” he said.

Graeme Leach, chief economist at the Institute of Directors (IoD), said that we are still a long way from genuine structural reform in our public services.

“Targets for tackling waste are all very well, but the real test will be implementation.

“The chancellor needs to go much further than today’s pre-election rhetoric. We need real reform, not just relocation,” he said.