Headlines: May 10th, 2007



Britain’s business leaders have set out a plan to transform the delivery of public services to deal with the issues of the 21st Century. The CBI, the country’s leading business organisation, says current policies are not equipped for the combined challenges of climate change, globalisation, emerging world economies, the increasing age of the population and heightened social and global insecurity.

In a fully costed submission to the Treasury ahead of the Comprehensive Spending Review, the CBI has set out five reforms it believes are needed to transform public services and spending, including the increased use of competition and the market in the provision of services.

It calls for the Government to move from being a provider of public services to becoming a commissioner and for closer public involvement in the design and delivery of public services so they are more responsive to people’s needs. It also wants to see savings made through more sharing and relocation of expensive or overlapping back room functions. Finally it argues that public sector pay and pensions should be overhauled to create better incentives for staff to improve performance levels and to lift “as much of the millstone of the unfunded public sector pension liability from the neck of the Treasury as possible.”

The CBI has also told the Treasury that public spending discipline should be maintained beyond 2011 as this would help create room for economic manouevre allowing the Government to deliver a cut in major business taxes. It says, however, that its tighter spending plans would not compromise frontline services if they were combined with meaningful efficiency savings. Its Deputy Director General, John Cridland, said the challenges of the new century had the potential to change society and patterns of economic activity on a scale unseen since the Industrial revolution. “Making the UK resilient enough to face this will demand a radical new approach from government. It will demand a real determination to tackle our current weaknesses of low skills levels, crumbling infrastructure, public sector inefficiency and only modest productivity growth,” he said.