How Private Sector Business can counter the cuts to UK plc

The 20th October saw the Chancellor, George Osborne, deliver the Comprehensive Spending Review Statement which was billed as the defining moment of the Coalition Government. After five months of discussion and brinkmanship between Whitehall departments and the Treasury, the Chancellor announced that public spending will be cut by £83bn over a five year period in order to tackle the huge budget deficit.Immediately, the markets picked up as their belief was that if cuts were slower, or not as far reaching, it would mean more borrowing and that would put market confidence and the UK’s triple-A credit rating at risk. This could have potentially resulted in UK plc going the same way as Greece and Ireland.

However, it was also predicted that some 490,000 jobs in the public sector would have to go. Predictably, the trade unions and the Labour Party claimed that George Osborne’s plans would send the UK economy into a double dip recession. But is this the most likely outcome for UK plc?

Public sector job losses and cuts will not necessarily lead to little or no growth, or even a double-dip recession. Indeed an Institute of Directors blog recently observed that between 1991 and 1997 public sector employment fell by around the same amount as we are likely to see following the CSR, but that this did not prevent a sustained upturn in economic growth.

Any recovery will, quite clearly, have to be Private Sector led, with spending cuts the only credible option. The alternative, higher taxes, would stunt growth and damage the Private Sector at just the time the country needs it to fire on all cylinders. Thus, the government’s plans should provide a stable economic platform from which to build a recovery. Furthermore, data suggests that between 250,000 and 300,000 Private Sector jobs have been created in the previous quarter, so business is more than capable of making up for job losses in the Public Sector.

Every cloud has a silver lining, so the saying goes, and the current situation should be looked upon as an opportunity for Private Sector businesses and not a threat. As the government looks to shrink the Public Sector, many opportunities may present themselves for the outsourcing service providers across the UK. The point is, services won’t necessarily be reduced but transferred from Public to Private Sector providers (along with the associated risk and reward).

Furthermore, in the CSR, the Chancellor retained a lot of the infrastructure projects across the country and this too must be seen as a boon to business (along with the Public Sector pension reforms which appear to be fair and equitable when compared to pensions in the Private Sector).

Recent “first cut” figures showed that the UK economy had grown by 0.8 per cent in the last quarter, which was double the 0.4 per cent growth predicted. Although this was a drop from the 1.2 per cent in the previous quarter, one has to remember that the previous quarters figures were totally unexpected and were the result of many non-normal economic factors. In summary then, the 0.8 per cent growth was a pretty strong performance given the current circumstances. It’s a given that growth will almost certainly be relatively subdued for some time, and one question doing the rounds is whether the Bank of England may have to inject more money into the economy soon. To counter this, it is also fair to say that inflationary pressures have also been with us for some time (with the Bank of England Governor, Mervyn King, writing regular letters to the Chancellor for some months now) and this may ultimately head off further quantitative easing.

Overall then, from a business perspective, the Comprehensive Spending Review has probably given the country the best chance of a sustainable, private sector-led, period of growth. It’s now up to the business sector to get out there and make it happen. Let’s get to it!!!

Professional Services Company Award 2010

Intervallum Limited was a finalist (top 4) in the Professional Services Company of 2010 category, sponsored by Chantrey Vellacott DFK, at this year's Business Awards Ceremony.

In this photograph, Paul Hooper-Keeley of Intervallum Limited (centre) joins Chantrey Vellacott DFK partners Paul Fenner (left) and Nick Simkins (right).

Photo courtesy of Diamond Edge Events Limited

Business Entrepreneur of the Year 2010 - Highly Commended

Paul Hooper-Keeley of Intervallum Limited received a "Highly Commended" certificate in the Entrpreneur of the Year 2010 Award category.

Photo courtesy of Diamond Edge Events Limited

Winner of Business Networker of the Year 2010

Paul Hooper-Keeley of Intervallum Limited is presented with the Business Networker of 2010 Award by Louise Panayides, Director of Edge Creative Limited (sponsors of this award) at The Business Awards 2010 held at Aston Villa FC on Friday 19th November.

Photograph courtesy of Diamond Edge Events Limited

Intervallum Wins at the Midlands Business Awards 2010

We are delighted to announce that the Midlands Business Awards 2010 Dinner and Ceremony, held last night at the Aston Villa FC Conference Centre, was a night of great success for Intervallum Limited.

Nominated in 3 categories, Paul Hooper-Keeley won the Business Networker of the Year Award and collected the "Highly Commended" certificate in the Entrepreneur of 2010 category.

Furthermore, Intervallum Limited was one of the four finalist companies in the Professional Services Company of 2010 Award.

It is a great tribute to the work and dedication of the Intervallum team to be recognised by the Midlands Business community at such a prestigious and high profile event.

Intervallum receives 3 Awards Nominations at the Midlands Business Awards 2010

Paul Hooper-Keeley, Managing Director of Intervallum Limited, commented, "I was absolutely delighted to be informed this week that Intervallum Limited has been nominated for 3 awards at this year's Midlands Business Awards in the categories of Best Professional Services Company, Best Small Company and Networker of the Year. This comes on the back of the 2009 nomination of Intervallum as Best New Company, and is a reflection of the hard work and dedication of the Intervallum team in creating and providing high quality Interim Finance Director services to industry and commerce".

The 2010 Midlands Business Awards ceremony and black tie dinner will be held at Aston Villa FC on Friday 19th November in the prestigious Holte Suite.

Business Networking Diary Dates

Although there is little of the year left before the Christmas break, there are still a few good business networking opportunities to be had: -

Tuesday 16th November - Delivering more with less, a CIMA event focusing on the Public Sector post Comprehensive Spending Review. This free event commences at 6.30pm at the Haughton Hall Hotel, Shifnal, Telford. Contact julie.witts@cimaglobal.com for details.

Friday 19th November - The Midlands Business Awards & Black Tie Dinner, Holte Suite, Aston Villa FC. Contact Jo Bailey at info@diamondedgeevents.com for more details of this gala evening.

Friday 26th November - Alexander Daniels are holding a Private Equity Breakfast Event (8am to 9.30am) at Baskerville House, Birmingham. Contact them via the Alexander Daniels website to book your place.

Thursday 10th December - CIMA Social Media Workshop with guest presenter, Liz Cable. This free event commences at 6.30pm at the Hatheton House Hotel, Penkridge. Contact julie.witts@cimaglobal.com for more details.

Tuesday 14th December - Cooper Parry Corporate Finance Breakfast, Pride Park Stadium, Derby. This excellent bi-monthly event costs £15 and runs from 8am to 9.30am. Contact them via the Cooper Parry website to book your place.

See you there!!!