Osborne consults workers amid economic gloom

By politics.co.uk staff

George Osborne is pressing ahead with his austerity agenda by meeting public sector workers with bright ideas for spending cuts, as the impact of his emergency Budget hits international forecasts for British economic growth.

The International Monetary Fund (IMF) predicted Britain’s GDP would grow by 1.2% in 2010, a 0.1% fall from its April 2010 forecast. It said 2011 growth would reach 2.1% but this was 0.4% less than three months ago.

Only Canada had such a dramatic reduction for its 2011 prediction among the world’s advanced, emerging and developing economies. The IMF predicted overall world output would increase by 0.4% this year but stagnate in 2011.

Mr Osborne’s emergency Budget included plans to reduce departmental budgets by 25%, with only the Departments of Health and International Development protected.

The Treasury’s ‘spending challenge’, which encouraged public sector workers to contribute their own ideas for efficiency savings, is part of the chancellor’s bid to reduce the political sting out of the moves.

He is spending the morning meeting with some of those who have already made suggestions.

A selection of the ideas already submitted include proposals to cut down on office stationery costs, a call to renegotiate IT contracts “across the board” and switching government computers off overnight.

“The government has said that reducing the deficit is the most urgent issue facing Britain today,” a statement on the Treasury’s website said.

“That is why it has committed to a significant acceleration in the reduction of the deficit over the course of this parliament.”