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Forum Brief: CSR - Corporate response
Gordon Brown has unveiled plans which will see the public sector spending more than the value of entire economy of the continent of Africa over the next three years.
Revealing the details of his comprehensive spending review, Gordon Brown played "money god" to schools, hospitals, transport, crime and agriculture.
A total of £61 billion in extra spending will be given to public services over the next three years, Brown told MPs.
Forum Response: British Retail Consortium
Mark Bradshaw, deputy director of the British Retail Consortium, told ePolitix.com: "Retailing in the UK is world-class innovative sector that has supported the economy during a period of global instability. However, the government needs to be mindful of cumulative burdens on business, both in terms of taxation but also in terms of policy failures such as crime and transport, which impact directly on the retail industry.
"Retailers don't operate in isolation from society and its trends. Although often forced to tackle the symptoms of under-funding and government failure - such as in the case of retail crime - business alone cannot offer a cure to deep-rooted problems.
Forum Response: Institute of Directors
Ruth Lea, head of the policy unit at the IoD, told ePolitix.com: "There were few surprises in the Comprehensive Spending Review. April's watershed 'tax 'n' spend' Budget had already announced huge public spending increases that are largely to be funded by higher taxes on the business sector.
"Now whilst we recognise the need for better public services, we are deeply sceptical that the requisite improvement in public sector services will be achieved whilst the providers are so restricted by government diktat and 'consumers' have so little choice. This applies, in particular, to health and education.
"In addition, there are risks that the private sector will be crowded out by the burgeoning public sector and higher business taxes will undermine business's competitiveness. The chancellor in his zeal to tax 'n' spend must be careful not to kill off the goose that lays the golden egg."
Forum Response: Construction Products Association
Michael Ankers, chief executive of the CPA, told ePolitix.com: "The UK is bottom of the European league when it comes to the level of investment in the infrastructure and the rest of the built environment. The increases, building as they do on the last CSR, are absolutely crucial and long overdue."
"Making funds available is, however, only half the story and much greater emphasis needs to be placed on ensuring the delivery of projects on the ground: improved school buildings, better transport systems and new hospitals, as well as more and better quality affordable housing. The government is already behind the programme it set itself as part of the last Comprehensive Spending Review, and much more effort must be put in to ensuring that government's new targets are met.
"We welcome the resource based budgeting for each government department, making them fully accountable for delivering these ambitious spending programmes, and with clear remedial measures for those that fail. What we must ensure is that these are more than words, and that the government really does act when necessary."
Forum Response: The Work Foundation
John Knell, director of research at The Work Foundation (formerly The Industrial Society), told ePolitix.com: "The chancellor has rightly made a commitment to devolve power and responsibility in the public services to the front line.
"Without significant devolution to the front line, true customer focus in our public services will remain an abstract concept. Those who are delivering in the front line are often in a better position to know what the customer needs and how best to deliver it.
"The missing pieces of the jigsaw in the quest for better public services remain reward and motivation. This means better pay for some, but also organisation, incentivisation and leadership. Only when these pieces are in place will we see the increases in productivity and performance we all desire.
"The question that remains is whether Whitehall can develop enough trust to reduce their over-reliance on target setting and allow public sector managers the autonomy they need to innovate and develop creative workforce solutions to meet the challenges ahead."
Forum Response: Federation of Small Businesses
A spokesman for the FSB told ePolitix.com: "We are pleased to see increased funding for the small business sector.
"We are particularly pleased to see that the funding will be directed through the Regional Development Agencies who we feel will be able to react to local trends and developments."
"However, we also want to see the increased public spending in bite sized chunks in order to allow small businesses to bid for them."
Forum Response: GMB
John Edmonds, general secretary of the GMB, told ePolitix.com: "Gordon Brown has demonstrated that the public services are safe in his hands.
"What the government must now demonstrate is that these services will remain in his hands and not be dumped into the greedy clutches of the private sector."
Forum Response: Barclays
A spokesman for Barclays told ePolitix.com: "Over all it was a bit of a non-event as we knew all the figures prior to the announcement.
"The CSR represents some real Keynesian economics at work. At the moment the economy is going through a slight recessionary phase, but hopefully, the increased public spending in areas such as housing will help move the UK into stronger waters.
"As long interest rates and debt remain low, the chancellor and the prime minister's strategy should pay off."
Forum Response: Timber Trade Federation
"The government are running a risk that their return to tax and spend economics at a time of major global economic turmoil could lead to higher taxes and borrowing if the economy fails to achieve its target growth rate and if the public sector continues to resist reform."
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