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Firms yet to face up to impact of cuts

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Businesses are failing to appreciate the likely effects of the cuts in public expenditure to be announced in the forthcoming spending review.

That is the view of a former government expert.

Vicky Pryce, who is now a private sector consultant but was once an adviser to the Department of Business under the previous government, has said that too many firms that have public sector contracts are behaving as if unaware of the severity of the looming cuts.

Ms Pryce claimed that the process of renegotiating government contracts has already started, and that marketing and consultancy budgets are being reduced under strict efficiency guidelines.

She added: “Cuts in capital and programme spending will have direct implications for many sectors of the economy such as construction, IT and outsourcing, media and the arts and all sectors providing a service or supplying to the public sector.”