In March 2023 , the UK Government announced the latest Spring Budget . Many businesses anxiously held their breath as it was released during the height of the country ’ s cost-of-living crisis .
The Budget claims to “ build upon the action taken at the Autumn Statement 2022 to halve inflation , grow the economy and get debt falling ”, with the immediate aim of supporting businesses and households , while guaranteeing the UK ’ s affluence in the long term .
Financially , it also acknowledges that the UK has been struggling , narrowly avoiding a recession in the second half of 2022 . As a result of this , the public sector ’ s output remains below 2019 ’ s levels – falling by nearly 40 % in the second quarter of 2020 . The Budget cites healthcare as a key reason why the public sector ' s output levels remain so low , with the aftermath of the pandemic still being felt widely across this sector .
This , combined with high inflation , is putting an unprecedented amount of pressure on businesses within the public sector and many are struggling to stay afloat . The Budget notes that while debt is forecasted to fall , in the near term the public sector
The government ’ s continued disciplined and responsible approach to public spending will continue to support the fall in debt .
The UK Government has recently announced the new Spring Budget , in keeping with the country ' s fiscal year . The Budget claims to ' halve inflation , grow the economy and get debt falling .' However , many businesses feel it will not meet these objectives . We hear from two industry experts about how this
Budget will affect financial services in the public sector and what the government can do to help these businesses .
WHAT SHOULD THE UK GOVERNMENT BE DOING FOR FINANCIAL SERVICES IN THE PUBLIC SECTOR ?
is “ expected to borrow £ 152.4 billion ” in 2023 – “£ 30 billion higher than 2021 – 22 ”.
However , the Budget firmly believes that “ the government ’ s continued disciplined and responsible approach to public spending will continue to support the fall in debt at future fiscal events .”
This is backed by The Charter for Budget Responsibility , which aims to reduce the country ’ s debt sustainably by responsibly managing the public sector ’ s balance sheet . So , there is hope for companies in this sector .
On top of this , Jeremy Hunt , Chancellor of the Exchequer , confidently announced changes in childcare , employment , enterprise and localised growth . With a particular focus on a simpler tax system for small businesses – freeing up both time and money for the 5.5 million SMEs across the UK .
“ The OBR report that inflation in the UK will fall from 10.7 % in the final quarter of last year to 2.9 % by the end of 2023 ,” said Hunt .
In the same speech to Parliament , Hunt also predicted that , with a buffer of £ 6.5 million , the country ’ s underlying debt / borrowing was destined to fall significantly by 2027 – just down to 1.7 %. Subsequently , Hunt determined that this meant there would be “ more money for our public services and a lower burden on future generations .”
In response to the Spring Budget ’ s bold objectives , we asked two experts for their thoughts and posed the question : What should the government be doing for financial services in the public sector ? They offer their insights below . . . .
E D I T O R ’ S Q U E S T I O N