This week leaders of some of Britain’s biggest businesses gave an emphatic endorsement of the coalition Government’s decision to cut spending immediately in order to pay down the UK deficit.
That of course is the private sector view, however the suggested 25% cuts in the public sector have not engendered the same reaction from those employed in this area or their unions, with a figure mooted of around 600k jobs to be lost in the next few years. The Government expects new jobs to be created in the private sector to cover most of these losses, but there are two factors that show this may not happen and thus push the UK into perhaps a “double dip” recession. Firstly, the public sector relies on supplies from the private sector and so there are bound to be ancillary job losses there. Secondly, many companies have already saved job losses by putting in pay freezes and short-time / part-time working. Any recovery will only mean putting the effected employees back to work full-time and thus not produce additional employment.
There are difficult times ahead but now that the budget has at least provided the benchmark on what to expect – businesses now can plan with some certainty their future recovery strategy.
MW Interim Finance can assist SME’s to develop and implement their strategic and operational objectives, and for further information either call Martin Walby on + 44 (0) 7876 566875 or email firstname.lastname@example.org