Is it right to invest in public sector services at this time?
The UK government is coming under more and more pressure to reduce investment in the UK public sector at a time when the budget deficit is rising, with a £20 billion deficit in November alone, and UK national debt is growing. So is it right to invest in public sector services at this time?
There is no doubt that we will see a reduction in public sector investment in the short to medium term, with the growing budget deficit and growing debt pile both major issues, but there are other factors to consider. Under the Labour government, the UK public sector has grown enormously and is now the largest single employer in the UK. A large-scale reduction in investment in the sector would obviously lead to significant job cuts which would put pressure on the UK state benefits system and see a rise in unemployment numbers.
The UK government appears set to maintain public sector investment in the very short term, at least until the next general election, with the unions threatening wide scale strike action if significant job losses are announced. In many ways the government is stuck between "a rock and a hard place" but in the end this ongoing enormous investment in the public sector will have to be reined in, something which will bring its own problems in the future.
Share this..
Related stories
George Osborne announces £6.2 billion reduction in public-sector spending
George Osborne has today announced £6.2 billion in public-sector spending cuts across the UK with local councils set to bear the brunt of the investment reduction. It was revealed that local councils will receive around £2 billion less in the tax year 2010/11 with all areas of local council services hit hard. There will be a £1.2 billion reduction in local authority grants, £260 million sav...
Read MoreWhat has prompted an increase in alleged tax avoidance prosecutions?
Earlier this week the UK authorities won a high-profile court case regarding offshore trusts and the ability of the authorities to backdate tax demands prior to the 2008 Finance Act. Not only will this see the UK government reclaim hundreds of millions of pounds of unpaid taxes but it has also sent a serious shot across the bows for those who hold funds offshore and have perhaps neglected to decla...
Read MoreUK government set to backtrack on bank share sales
Despite hopes that the UK government would very soon be able to sell off the £70 billion worth of bank shares acquired over the last few months, it now appears as though the authorities are set to backtrack on this initial timescale. As we covered over the weekend, a number of advisers have stepped forward to suggest that the UK authorities may struggle to sell shares with a value in excess of £...
Read MoreScottish Councils Pave Way For Local Income Tax
It has been ridiculed by the opposition parties, it has even been suggested it may be illegal, but whatever the real position the prospect of a local income tax moved closer today. The tax could replace the current council tax system after Scottish councils collectively voted in favour of the idea. This now puts the opposition parties in a very difficult situation and hands the power back to the...
Read MoreDo you receive value for money for your council tax?
As we covered yesterday, more and more taxpayers in UK will see local council tax payments increase significantly in the short to medium term due to a shortfall in local authority pension schemes and further pressure on services. The UK government is set to reduce investment in public services, despite initial denials that this would not happen, and taxpayers will be left to foot the bill for any...
Read More