Thursday, 21 October 2010

Now comes the hard part.


In Britain the words are over and now the action begins. The Conservative Chancellor of the Exchequer George Osborne now has to turn his promised £81bn in government spending cuts from promise to reality to honour his vow to restore “sanity to our public finances and stability to our economy”.
The Guardian’s page one budget summary
The £46bn cuts to administrative expenses will be the hardest part. It is so easy for a politician to promise to take 25% or 30% off administrative and general expenses but civil servants have a wonderful way when protecting their patch to make it difficult to achieve in practice. Just watch for the ingenious ways where proposals are put forward that the mandarins know will cause the maximum embarrassment and thus put the maximum pressure on a government to relent.
With implementation depending on the continued support of Liberal Democrats where a substantial proportion of members do not favour such a hard line austerity approach there are bound to be many problems along the way.
Perhaps more important is the concern that shedding 490,000 civil servants, with some consultants predicting another 500,000 to go from the private sector as contracts with government are not renewed, will push Britain into another recession Chancellor Osborne should not be cracking the champagne yet.
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