Business Groups Expect in the Spending Review

The Spending Review is due imminently, so what is expected for small businesses?

Spending Review 2013On Wednesday 26th June we will see the Government Spending Review for 2013 to see the spending budgets for each Government department for the tax year 2015-2016.

It is critical for the economy as a whole that the spending review moves the country in the right direction and small businesses are particularly interested in what the spending review might hold.

The Forum of Private Business (FPB) has called for "clarity, commitment and reassurance." for small and medium-sized enterprises (SMEs) with CEO Phil Orford saying:

“Growth will no doubt be the buzzword in the announcement, but growth against the backdrop of shrinking public funds means only one thing: private sector investment.”

“Clearly government is depending on private investors to grease the wheels of economic recovery, but businesses will want to hear the right noises from the Chancellor if they are to put their hands in their pockets.”

The CBI were equally keen to see an injection of private investment, saying that the Government needs a "project pipeline" and to fix its "slow pace on taking big decisions".

In addition to the proposed pipeline of major projects the CBI want to see short-term projects such as road improvements and house-building to kick-start the economy.

John Cridland, the CBI’s Director-General said:

“The Chancellor must prioritise areas that could propel a fledgling recovery and infrastructure investment should be in pole position.”

“If the Government doesn’t act now even less infrastructure could be built in the years ahead, as cuts from the last spending round continue to feed through and decisions on major projects remain up in the air.”

As well as encouraging private investment, the projects, both short-term and long-term, could see the involvement of small businesses tendering for and taking on vital work. In particular the FPB identified local investment and projects as a way forward.

Phil Orford added:

“Devolving key central funds as part of Growth Deals to the 39 Local Enterprise Partnerships will signal to employers that the government is committed to local growth driven by the private sector. But the funding will have to be meaningful. Anything less than what Heseltine suggested will be just a half-hearted gesture and pointless.”

“Despite the spending round’s single year focus, the government must use it to make a clear commitment to the private sector before it can expect the private sector to dig deep.”

The FPB’s Orford refers to the Heseltine Report published in October 2012 and containing 89 recommendations from the former MP and deputy PM Lord Heseltine. The Heseltine plan was adopted in March this year.

The Government Spending Review is on Wednesday 26th June.

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