Public spending cuts could prolong recession

10 November 2009

10 November 2009 | Jake Kanter

Cutbacks in public procurement spend would extend the UK's "economic agony", the Trades Union Congress (TUC) has said.

Today's TUC report, Speaking up for Public Services, said for every pound invested in services or through third party spend, a further 64p is generated in the local economy. Without this cash the country would struggle to haul itself out of recession, it said.

The report, compiled by the Association for Public Service Excellence, said spending cuts may balance the books in the short-term, but the impact on business and services would increase costs in the future.

It said public sector procurement has a "wide reach" and can be used to support employment and apprenticeships. It urged public sector buyers to read Promoting skills through public procurement, which explains how public bodies can ensure contracts promote skills training.

The government has already committed to using its purchasing power to help create 20,000 apprenticeships over the next three years (news, 29 September).

TUC general secretary, Brendan Barber said: "Sharp cuts in public spending would not only hit the most vulnerable in society, but would also hamper the chances of growth, increase the incidence of long-term unemployment and cause widespread job losses in both the public and private sectors."

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