Public Sector Reform Vital to Boost Productivity, Bosses told

24 November 2005

A concerted effort to improve productivity in the public sector is required to help close the UK's overall productivity gap, business chiefs will be told today. In a speech to 1,000 business leaders in Central London this evening, Miles Templeman, Director General of the Institute of Directors, is expected to call on the Government to focus on several key policy issues to help the UK close the productivity gap with its G7 peers.

Mr Templeman will highlight skills, transport and particularly the public sector as being in need of major improvements.

"One of our biggest concerns at the moment is the growth of the public sector, particularly in certain regions, and the need to focus productivity improvements as much in this part of the economy as competition forces ever-increasing efficiency in the private sector," he will say.

Continuing, Mr Templeman, will say:

"There was such anger over the preservation of the public sector retirement age of 60 not just because of the massive divergence between this and the realities we are facing in the private sector as we try to address our own pensions deficit, but the whole impression that the public sector is protected from the often harsh realities of the modern world. This cannot continue."

The audience at the IoD's Annual Dinner - which will also hear form Chancellor, Gordon Brown - will be told of growing business frustration with transport infrastructure and the skills agenda.  Mr Templeman is likely to call on the Chancellor to make transport in particular a Government priority.

Looking ahead to 2006 to conclude his speech, Mr Templeman will say:

"It is clearly a tough time and for many it could be a cold, tough winter. Businesses will need all the help they can get, particularly in the short term. Underneath the spirit of enterprise that I know the Chancellor endorses, we need a government that is business-orientated.

"We also need a government that will do its very best to remove restrictions that harm our ability to grow, whether in the form of excessive tax, regulation, administrative burdens or international trading restraints. Give us that freedom, take that risk, and we'll do the rest."