Employers' organisation calls on chancellor to put spending on infrastructure projects at centre of spending review
Britain's leading employers' organisation has called for the end of automatic public sector pay increases as it urges the chancellor to make spending on infrastructure projects the centrepiece of this month's spending review.
The CBI said the government had to look for savings if it was to avoid the mistakes it made when coming into power three years ago, when it announced deep cuts in capital programmes.
John Cridland, the CBI's director general warned that failure to act on infrastructure could put the UK's economic recovery at risk, adding that without Whitehall action to draw up a list of priority projects even less public investment spending could take place in the coming years.
George Osborne has hinted that he will respond to the recent call by the International Monetary Fund for more investment in infrastructure when he announces the Treasury's 2015-16 spending plans on 24 June. Vince Cable, the business secretary, has also been pushing the chancellor to reverse some of the infrastructure cuts made when the coalition took office in the spring of 2010.
Cridland said: "With more than half of government spending ring-fenced and £11.5bn of cuts required, the government has to walk a tightrope of making substantial savings, without harming fragile growth.
"The chancellor must prioritise areas that could propel a fledgling recovery and infrastructure investment should be in pole position.
"If the government doesn't act now even less infrastructure could be built in the years ahead, as cuts from the last spending round continue to feed through and decisions on major projects remain up in the air.
"To bridge the gap, the chancellor needs to press ahead with short-term action to improve roads and boost the supply of housing. He also needs to identify a pipeline of transformational projects and make sure their red ribbons are cut at the earliest opportunity."
The CBI said there was a need for ministers to draw up a list of priorities that they wanted to see built first – including expansion of the A14 connecting Felixstowe port, the M4 relief road and improving surface access to airports. It also called for an all-party commitment to implement the findings of Sir Howard Davies' review into airport capacity, due to published after the 2015 election.
The employers' body said savings could be made by ending salary increases in the public sector based on tenure, by integrating the NHS and social care, and by greater use of outsourcing to the private sector.