Alan Downey, KPMG’s head of public sector, said in response to the Budget:

“The chancellor’s ambitious Budget for growth needs to be coupled with an equally ambitious programme of public sector reform.

“Any plan for growth will only succeed if it also involves the transformation of our public services. Over the last decade UK public bodies have fallen well behind private companies in productivity. According to the Office for National Statistics productivity in the public sector declined by more than three per cent between 1997 and 2007, while among service providers in the private sector, it improved by more than 20% during that period.

“This has placed a huge and unnecessary strain on the whole UK economy. It is therefore not enough to reduce public spending – a radical reform of our public sector must accompany the cuts.”