ACHIEVING large cuts in public spending will be the big challenge facing the Conservative-led coalition government, according to Mark Thompson, chairman of the Institute of Directors in Guernsey.

Prime Minister David Cameron has spent the past couple of days putting together a cabinet, including Liberal Democrat leader Nick Clegg as deputy PM, but now the pressure to follow through on £6bn of promised spending reductions to reduce the budget deficit will start.

Mr Thompson (pictured) said it was a tall order, but that the IoD believed the key test facing the new UK Government was whether it could maintain a stable government over a significant period of time to deliver the cuts, and whether it could generate policies across all areas that genuinely supported business and economic growth.

He said that it would need discipline, something seemingly absent from Guernsey’s government following the publication of the 2009 accounts last week, which showed that States departments spent £29m. more last year compared to 2008, a rise of almost 10% when States policy is to keep expenditure increases at RPI or below. Inflation was 2.2% at year end.

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