ROOF Blog

Councils are considering plans to reduce their spending including by cutting up to 170,000 public sector jobs in anticipation of a dramatic downturn in their budgets. Dame Margaret Eaton, chair of the Local Government Association, said that local authorities were being hit by a ‘perfect storm’ in the recession with increased pressure on their services and a squeeze on their budgets. Privately, councils are looking at how to slash their budgets by 15% over the next three years, using projections on the cuts necessary to reduce the £178m public deficit drawn-up by the respected Institute for Fiscal Studies.

Applications to build houses across the UK rose in the last quarter of 2009, according to the NHBC. It said applications to build new homes between October and December 2009 rose 64 per cent from 15,879 to 26,078 compared with the same period in 2008. This was driven by the private sector, where applications surged 113 per cent, from 8,646 in the last quarter of 2008, to 18,393 in 2009. Public sector demand saw a six per cent rise, from 7,233 to 7,685. Imtiaz Farookhi, chief executive of the NHBC, said: ‘Our house building colleagues across the industry have shown cautious optimism as they reveal their predictions for 2010. Now the nation’s housebuilders need support from the government as they see their way out of this downturn and try to meet the need for new homes.’

Another £70 billion should be shaved off public spending to rebalance the budget, The Confederation of British Industry (CBI) has told the Treasury. The Treasury is planning to borrow £703 billion from 2009/10 to 2013/14, an unprecedented run of deficits that will push the national debt to £1.4 trillion. However, even that stark estimate may be too low because the economy will not rebound as fast as ministers hope, business leaders said. ‘With a lacklustre recovery in prospect and a structural loss in output, the CBI estimates that borrowing could even exceed this projection by £50 billion,’ the group said in a submission to the Treasury. In addition, another £70 billion will be needed over the following two years to balance the budget by 2015-16, the CBI said. The CBI has drawn up a detailed plan to significantly shrink the public sector, cutting costs and handing over many tasks to private companies. The group also wants public sector staff pay and benefits to be curbed.