I said in my leader for the magazine this week that Experian’s latest economic forecast predicting growth in 2011 to 2012 was overly optimistic.
And after yesterday’s announcement from Danny Alexander that £11.5bn worth of projects were being cancelled or put on hold, that’s now even more likely.
It’s worth remembering that even under Labour the budget was planned to be halved by 2014. This would have produced a capital spending reduction of £20bn. Some of those schemes cut like the £450m hospital at Stockton on tees and the £25m Stonehenge Visitor Centre will have already soaked up millions of pounds in fees and wasted design effort no doubt.
Any one with public sector contracts in the balance now must be expecting the worst – or if you voted for the conservatives – the best - as this frankly has always been what they said they would do.
But those with contracts already signed should also start worrying too. I’ve been reading the Cabinet Office Structural Reform Plan – quite a comprehensive blueprint complete with timetable on how spending and procurement can be made more efficient. There are sections on reducing the number of quangos and civil service reform for example. But there’s also a very meaty section entitled Driving Efficiency in Government Operations.
Amongst the key milestones it lists in this section is the renegotiation of key contracts. Under actions, 4.4 it says: Cut the costs of existing government contracts.
It plans to start identifying contracts for renegotiation now with a view to having completed the haggling by March 2011. There’s no detail about what type of contracts this might include, but you can better your last penny this will include those in our sector.
Why on paper should IT be covered and not construction after all. And let’s face it the government would only be doing what the housebuilders did – and many of the supermarkets are now doing – 18 months ago. You can see where the coalition is coming from. If it’s good enough for the private sector then why the public sector shouldn’t be squeezing the pips a little more.
I don’t like to imagine the consequences - untold misery and chaos – and no doubt it would be the poor specialists who’d bear the brunt of it. You might want to get on to your lawyer now.