"Hard road leads to a better future" - Osborne sets out cuts
agenda
The Chancellor of the Exchequer, George Osborne, presented the
results of the government spending review to Parliament today. The
review is important to employers, because it sets the tone of the
focus of government activity for the next five years.
His key themes were:
On the subject of reform, the Chancellor said that there must be
a shift in the balance of power from centre to locality and that no
public service could be immune from reform. Along with cuts in
central departments, the role of the centre will be reduced and
schools and family doctors will have more freedom to spend budgets
locally.
To help business, the Foreign Office will have a focus on
helping UK exports and will have fewer UK-based administrators.
On the subject of fairness, Osborne announced an increase in the
state pension age to 66 by 2020. Both men and women will have the
same pension age by 2020, and the increase will be phased in from
2016. The government has already announced that the "default"
retirement age of 65 will be abolished from April 2011, so there is
a strong expectation that people will continue working until an
older age. He also announced that unemployment benefits would be
reformed so that people would always be better off in work than
unemployed and on benefit.
Finally, on the subject of growth, George Osborne announced that
the private sector should lead the recovery and public spending
should be focussed on areas most likely to lead an economic
recovery. There will be a focus on the following sectors:
- Transport;
- Green energy;
- Science;
- Skills and education.
On the subject of skills, 75,000 new adult apprentice places per
year are to be created.
Capital funding will go to carbon capture and offshore wind
technologies and a new green investment bank will be created.
There will be a focus on transport capital spending – although
rail fares will go up – with many road and rail projects given the
go ahead after being put on hold after the election.
Another focus will be on education. The schools budget will
increase and the "free schools" programme will continue. Free
nursery places for 3 and 4 year-old children will continue and will
be expanded to disadvantaged 2 year olds.
While it is clear these announcements will have a direct effect
on UK public services, there are likely to be knock-on effects to
private enterprises, including new opportunities.
What is very clear is the need to ensure you are fully
up-to-date with employment law issues to ensure you can react
effectively to any changes that may filter through.
If you are already a client, remember you have access to our
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