IT’S going to be a painful time for the public sector. You can expect to hear loud squeals as the bad news about where the public spending cuts will fall is announced in a few days’ time.
For the past two years, the nation’s civil servants, local authority workers, social workers and numerous quangocrats have found the public sector a refuge from the worst effects of the recent recession.
The previous government chose to keep public spending high in a bid to offset mounting job cuts in the private sector.
As a strategy, it clearly worked, with unemployment rising far more slowly than previously feared. Many forecasters had predicted that unemployment would top 3m by the end of 2008, but it didn’t. It hasn’t reached that figure even yet, which is not to say it won’t once the new coalition government’s cuts take hold.
It’s no use Liverpool council leader Joe Anderson and other Labour politicians berating Messrs Cameron, Clegg and Osborne, because the cuts would be happening whichever party had won the election. Britain can not afford to continue to run up a £160bn-plus annual public spending deficit, for fear of suffering the same fate as Greece.
According to some experts, we can already see evidence that the big international lenders are becoming jittery about national debt levels in many countries. There is a genuine concern that any insolvency among states would hit liquidity within the banking sector. That, in turn, would affect banks’ willingness to lend to consumers and businesses, taking us back to where we were a year ago, with weak economic growth and even a return to recession.
So there will be cuts.
The only question is what cuts will be politically more palatable than others. I would have thought the new Royal Liverpool University Hospital will survive the spending axe, as will spending on defence projects like the new aircraft carriers, part of which are to be constructed at Cammell Laird’s shipyard at Birkenhead.
But then you come to other spending decisions where the case for retaining them is less clear. There will be virtually no political damage at all to the Tories, should they choose to scrap the Edge Lane road improvements.
Worse still, business support services could be curtailed without many voters objecting too loudly. It would, however, be a retrograde move in places like Merseyside where there has been so much effort put into trying to improve the region’s business density. At a time when more and more people will be thinking about starting their own businesses as a solution to joblessness, it would be detrimental to cutback business support.
We know the Northwest Development Agency is top of the Tory party’s list of cuts. The question is what other economic development quangos will follow suit. As for those quangos that survive, there is bound to be a question mark over how well resourced they will be.
But we have all voted for the cuts, so we can’t complain.
ON THE subject of Joe Anderson, the council leader has said he will recruit a business leader to his cabinet.
It’s a good idea to allow the voice of business to be heard in council.
But, if it is to be worthwhile, the chosen business representative needs to be somebody who is not too cosy with the council and who is prepared to be openly critical. Too often in the past, I have heard business leaders voice their concerns about the council privately, while being completely unwilling to say anything publicly, for fear of losing business.





