Magazine article Public Finance

Road to Recovery

Magazine article Public Finance

Road to Recovery

Article excerpt

Christmas cheer is in very short supply at the moment Unemployment is up, inflation is morphing into deflation and the pound is heading inexorably towards parity with the euro.

Pain is all around, but it is the private sector that is really feeling the heat

Jobs in retailing, banking and construction are disappearing quicker than mince pies at the office Yuletide party.

It might not feel like it to those on the front line, but public services will have a small breathing space as ministers put their faith in the £20bn short-term fiscal stimulus. Capital projects have been brought forward, while health and education funding has remained relatively buoyant.

But, as Tony Travers (pages 16-19) and Colin Talbot (opposite) point out, the public sector will be sharing everybody else's pain sometime very soon. In 20 1 1 - 1 4, spending growth will becutto 1.1% in real terms, leavinga £37bn black hole.

During this period of uncertainty it is vital that the public services continue to improve their performance levels. Sadly, this week was not one to remember with much affection. …

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