Spending Review Survey – Majority support tough cuts

THE majority of business leaders back the Government’s spending decisions despite concerns about the effect they may have in the short term, according to a survey by TheBusinessDesk.com in association with leading law firm DWF.

More than 60% of those in the North West who took part in the survey said they agreed with the steps taken by the coalition that will see £81bn cut from public spending.

However, the same number expressed concern that the results of the Spending Review will have a negative impact on their business and described themselves as “less confident” about the economy since Chancellor George Osborne set out his plans.

Economists have predicted that 500,000 jobs could be lost in the private sector as a result of the cuts and 44% of respondents expect staff numbers to be reduced although one-in-five forecast jobs growth.

And the survey results expose significant concern that the private sector will not be strong enough to absorb people left without work as the Government cuts 490,000 public sector posts.

David Pickering, executive partner in DWF’s Manchester office, said: “The aim of the

 survey was to present an insight into how North West businesses feel the economy will be affected by the Spending Review.
   
“The results certainly seem to present a more cautious outlook following the Spending Review but reveal that the majority of businesses support the steps taken by the coalition Government.

“Overall, regional businesses seem to be indicating the Spending Review will in the short term impact on day to day business dealings particularly on staff numbers and recruitment.”

Mr Pickering, pictured, added: “There is a feeling that the private sector may not be robust enough to support public sector job losses. This makes it all the more imperative that Government continues to develop stimulating policies for the economy.

“Growth and entrepreneurialism needs to be made easier by removing restrictive red tape and other barriers to development. This will help the private sector to grow and absorb the job losses in the public sector.  

“These results show that the private sector economy needs to be on its toes and needs to be ready to adapt and diversify. Businesses that are overly reliant on the public sector will find it hard to survive without reassessing their business models.” 

Respondents in the North West were more negative than their counterparts in Yorkshire where 33% of those who took part described themselves as “more confident” following the Spending Review.