Latest Public Sector News

22.08.12

Push for growth expected following rise in borrowing

The Government is reportedly set to reveal a series of measures to promote jobs and growth after a shock rise in borrowing last month.

The coordinated plan for growth is expected to launch in September, with a focus on liberalising planning laws, guaranteeing more house building and boosting infrastructure projects.

Chancellor George Osborne was subject to further criticism when ONS figures showed a £557m deficit in public sector net borrowing for July. This compared with a £2.8bn surplus in the same month last year and was way below the £2.5bn surplus expected by analysts.

The increase in borrowing was largely due to a fall in corporation tax receipts, with the majority of this caused by a drop in North Sea revenues.

The Institute of Directors warned the Government was doing “too little, too slowly” to promote growth.

And Rachel Reeves, shadow chief secretary to the Treasury, said: “This is a damning indictment of a chancellor who promised to secure the recovery and get the deficit down. His failed plan has delivered the exact opposite – a double-dip recession which is leading to soaring borrowing.”

But a Treasury spokesperson said: “It is a difficult environment because the global economy is weak. We have to hold our nerve and stick to our plan.”

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Image c. Eva Ekeblad

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