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Business leaders urge radical response to cuts

Business leaders have urged the Executive to undertake a “radical” strategic review of the way public services are delivered as it responds to the latest round of budget cuts.

The Institute of Directors said the province needed a “coherent, well-considered” response to the pressure to reduce UK public expenditure while maintaining services to the public.

The Treasury yesterday outlined details of £6.2bn in public spending cuts to be made this year, including £128m in Northern Ireland.

The IoD said it was crucial the response avoided hasty decisions that could further damage the economy.

“There is wide agreement that the balance between public and private sector employment in Northern Ireland needs to be changed. There has been no consensus about how to achieve such a step-change within a |realistic timetable and there is little understanding of how such a shift could open up scope for creating more jobs,” said IoD chairman Joanne Stuart.

“The IoD believes all these circumstances combine to provide a new range of opportunities for more effective use of resources in Northern Ireland. The key is the realisation that public services do not have to be provided only by public bodies. Indeed many public services are currently delivered by private companies and not-for-profit organisations.”

The IoD chairman said there was scope for private sector money and expertise to be used more widely, possibly to develop new joint ventures between the sectors.

“The result could be the growth of a new public-private capability in Northern Ireland,” she said.

PwC Northern Ireland chief economist, Esmond Birnie, said the £128m of savings for Northern Ireland were less than had been expected but still significant when added to the £370m in cuts already announced by Finance Minister Sammy Wilson.

“The dilemma facing the Executive is whether to take the cuts now or defer the pain in the hope of finding further economies and additional sources of finance in the intervening months. Whatever they decide, hard choices lie ahead.

“This current spending crisis offers the Executive an opportunity to demonstrate leadership and forge partnerships between the public, private and voluntary sectors to develop imaginative policies to regenerate the economy and maintain strategic infrastructure investment.”

Glyn Roberts from the independent retailers’ organisation NIIRTA added that wrong decisions now could stall the still fragile recovery.

“We would urge ministers to ring-fence funding on economic regeneration projects as it is local businesses which will help steer us out of recession by contributing more jobs and more taxation to the exchequer.

“If ministers are looking for savings, the best place to start is with the quangos we have in Northern Ireland. Axing or merging a number of them could result in significant savings.”

RICS Northern Ireland director Ben Collins said the Executive could save millions by better managing its property assets. “This could be done potentially through the sale of some government buildings and the more efficient use of others,” he said.