The Comprehensive Spending Review (CSR) – one year on
Ian Oakley-Smith of PwC has prepared a report, ‘Spending Review one year on’: http://www.pwc.co.uk/eng/publications/spending-review--one-year-on.html and the following forms a summary of its main points.
“There is a persistent feeling amongst the public of uncertainty around the future and an expectation that the worst is still to come, particularly as public sector recession hampers the recovery of the labour market and with continuing global volatility.
The good news is that, as we expected, there have been private sector employment job gains which had more than offset public sector losses over the 18 months to June 2011, although the gains were most evident for part-time jobs. However, in the second quarter of 2011, when the public spending cuts started in earnest, this pattern was reversed – with public sector job losses overtaking private sector job gains.
The construction sector has been hard hit (as we anticipated last year) whilst the growth in business services overall suggests that the opportunities we foresaw last year for some sub-sectors like outsourcing may have outweighed the losses in other areas.
Public sector job losses appear to have been more front-end loaded than expected, with particularly severe losses early on in local government, whilst the regional impact so far has been more varied than we originally expected.
Although the Chancellor’s room for manoeuvre is limited, our analysis indicates that there are options to fine-tune the pace of the fiscal squeeze, but these are not easy or costless. Some re-phasing of capital spending cuts is the most attractive of the options available.
So how are your customers likely to be impacted by sluggish growth and continuing government cuts? Below we have set out some key questions that you can ask your customers:
Author: Ian Oakley-Smith
Ian Oakley-Smith is director of business recovery services and a member the charities team at PriceWaterhouse Coopers LLP.
He is a chartered accountant and licensed insolvency practitioner, specialising in the non-profit sector.
Ian is also a member of the ICAEW charities SIG committee.
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