Sarah Green column

Feb 13 2007 By Sarah Green, The Journal

Yesterday's uproar at Newcastle City Council's leaked internal document "A 30 year economic vision, strategy and plan for Newcastle" illustrates exactly the narrow-minded and defensive mindset we need to change if we are to have a sensible debate based on fact about what our city needs.

The report's author was branded a "right wing neo-liberal" for proposing that the scale of public sector employment in our region may not be sustainable and that we should grow the private sector.

I speak to hundreds of businesses and most would agree - public sector pay and conditions make it difficult for the private sector to compete.

Let's stick to fact - the government will reduce spending on the public sector. Public sector spending has been growing at approximately 5% for the last five years, Gordon Brown has said this will cut back to 2% from April 2008. So any planning relating to the economic growth of our city needs to look at how we reduce dependence on the public sector and grow the private sector.

Second, let's stop the sensationalism - Newcastle City Council are looking at a 30-year strategy, not a three year plan. What is being discussed is a strategic approach to managing the economy long term. Public policy is often criticised for being short-term and based on political need and therefore we should support Newcastle City's strategic approach.

Furthermore, there is clear evidence that moving some public services to the private sector creates choice and competition which benefits the taxpayer. As a taxpayer, I want the best service from my local authority.

Third, most citizens of Newcastle would agree that most of the report's recommendations - stronger links with Gateshead, investment in transport, better housing, improved language education and quicker office development - were very sensible. Cannot we as a city welcome those recommendations we agree on, before ridiculing the report over one controversial recommendation?

The truth, however unpalatable it is for some, cannot and should not be avoided. Public sector investment will diminish. We need to have a mature debate about this. On behalf of the business community of this region, I applaud Newcastle City Council and look forward to a sensible debate.

Sarah Green is regional director of CBI North-East.