By Daniel Hunter
Wednesday will see the Chancellor announce details of the 2015—2016 spending round, and the business community needs ‘clarity, commitment and reassurance’ if they are to invest.
That’s the claim from the Forum of Private Business, which is urging the Chancellor to make a ‘clear commitment’ to projects which will require huge private sector investment.
“Growth will no doubt be the buzzword in the announcement, but growth against the backdrop of shrinking public funds means only one thing: private sector investment," Phil Orford, the Forum’s Chief Executive, said.
“Clearly government is depending on private investors to grease the wheels of economic recovery, but businesses will want to hear the right noises from the Chancellor if they are to put their hands in their pockets.
“The announcements therefore must have clarity of message, real financial commitment on the public side, and reassurance that the current policy direction is a long-term aspiration that can deliver in the short and medium terms.
“Government has to adopt a business-like frame of mind; focus less on political cycles and more on making a clear case for investment that is long term and will deliver value for money. If it fails to do that then businesses will rightly be reluctant to invest, and that could have huge implications for the recovery.
“After taxation policy, this is the most important routine task carried out by government and now more than ever, it’s crucial they get it right. The facts are Labour has already pledged it will stick to Osborne’s plan if it’s elected to power at the next election, meaning there will be no going back — this plan is going to be for keeps.”
The Forum said the announcement on funding for the Single Local Growth Fund, the scale of which will also be announced as part of the Spending Review, will be a clear signal on whether government believes in the concept.
“Devolving key central funds as part of Growth Deals to the 39 Local Enterprise Partnerships will signal to employers that the government is committed to local growth driven by the private sector. But the funding will have to be meaningful. Anything less than what Heseltine suggested will be just a half-hearted gesture and pointless," Added Orford.
“Despite the spending round’s single year focus, the government must use it to make a clear commitment to the private sector before it can expect the private sector to dig deep."
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