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Ian Brinkley
Economic Advisor
Ian Brinkley

Cutting the public sector

Authors: Ian Brinkley Ian Brinkley

08 June 2010

In the run-up to the Budget on 22 June the government has opened up the cuts debate to the general public. As The Work Foundation said last week in its policy prospectus, Cut, Tax, Grow? the ideal scenario would be for reductions in public spending and job cuts in the public sector to take place in line with growth and job creation in the private sector.

The government’s invitation to determine public spending priorities is very welcome, but not entirely without precedent. In 1997 the then government set out a number of different scenarios for public spending growth over the next decade and asked for views on which path it should take.
What we don’t know yet is whether the new government wants to consult on the balance between spending cuts and tax and the speed with which the deficit should be reduced, or whether these are pre-determined by the Budget and the consultation is on how best to implement the strategy.

A fast growing economy makes the task of reducing the deficit much easier – as the Canadian experience widely seen as a model for the current approach has demonstrated. A key determinant of spending priorities must reflect the need to support growth sectors and private sector jobs especially in the regions where private sector jobs have grown more slowly than in London and the South East. Innovation, science and technology, skills development, support for entrepreneurship, long-term investment in the physical and digital infrastructure are all priority areas.

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