Upcoming Events :
Housing Seminar: Partnerships with the Public Sector – Avoiding the pitfalls
Thu 31 May 2012
Minerva House, 5 Montague Close, London, SE1 9BB
Root-and-branch review of public spending needed, says CBI
Mon 14 Jun 2010
The CBI has said the government needs to undertake a root-and-branch examination of public spending in Britain.
According to the business group, this should be similar to the review that was undertaken by the Canadian government back in the 1990s.
This, it stated, saw the incumbent administration look at all its spending programmes and successfully overcome a large budget deficit.
However, the CBI said the UK government needs to also find a way to bring Britain's deficit under control without damaging the economy's ability to grow.
The group said this could be achieved by controlling spending instead of raising taxes, along with achieving greater efficiency in the public sector.
It also suggested that for every pound that taxes go up by, government expenditure should go down by four pounds.
Richard Tinham, commercial partner at Winckworth Sherwood Solicitors, commented: "It will be interesting to see what such a public spending examination reveals and how it is addressed.
"Public bodies may not be able to walk away from existing contractual relationships without facing termination charges.
"In such scenarios, early termination of contracts will result in the public body going without the goods, works or services contracted for, incurring costs associated with the termination and receiving little, if anything, in return for the time and money invested.
"Where contracts have been procured to replace old or worn systems this could also mean out of date arrangements or assets reach the end of their useful life with no replacement in sight.
"This could lead to a perverse outcome whereby cost saving measures actually lead to more significant costs and inefficiencies in the long run."
This comes after Ian McCafferty, chief economic adviser at the CBI, said he expects the economy to grow "modestly" during 2010.
He added that the Bank of England's decision to leave interest rates on hold is not a surprise, as it is waiting to see how the recovery unfolds.
