Banking expert uses Stoke Rochford summit to warn Government its austerity programme is too fast

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“Slow down, you are going too fast” was the message from a leading economic expert to the Government on its austerity programme.

This came from David Llewellyn, a professor of money and banking at Loughborough University, during a summit at Stoke Rochford Hall last Tuesday, organised by South Kesteven District Council and Lincolnshire County Council.

Delegates from across the public sector attended the summit, which aimed to address the big issues facing Lincolnshire’s economy as the local authorities prepare for the next round of budget cuts.

Prof Llewellyn said: “I am certainly not as pessimistic as some and I do believe there are rays of hope in the economy with tentative green shoots appearing. But I think the Government needs to slow down its austerity programme. It’s not working as planned. Timings are important and so is a clear and coherent plan. The more the Government presses ahead the less effective it’s going to be.

“No-one disputes that the level of debt must be reduced but we need to take a much longer term view. We now have negative rates of interest and should be encouraging capital spending because the cost is negative in real terms and over time will yield a positive return. If we don’t take advantage of this I fear we will miss the opportunity of a life-time.”

Another speaker at the summit was Local Government Association finance director Stephen Jones, who said councils were moving into a world of uncertainty and risk previously managed by Government.

He added: “Core funding for 2013/14 will be lower than this year and I think it will be between zero-six per cent less. The following year it could mean between £250,000/£500,000 less per district. Councils need to challenge some of the changes being made by Government.”

Meanwhile, the county is “faring well” in the recession according to LCC’s head of enterprise Justin Brown.

Speaking after the summit, leader of SKDC Councillor Linda Neal said all councils would need skill and imagination to overcome the challenges ahead. She added that the recent Gravity Fields Festival was typical of SKDC’s “new approach” to bringing prosperity.