Downturn could hit tax receipts take

The economic downturn could have a "significant" effect on the quality of public services as tax revenues fall and demand for social benefits rises, Deloitte has warned.

In its Turning the Tide report, the Big Four firm said central and local government would come under intense pressure to cut costs but urged managers to seize the chance to deliver reforms that could not be made in an easier economic climate, such as sharing back-office functions with other public bodies, clamping down on sick leave and selling assets.

‘Government organisations should make an immediate financial assessment of their own businesses and their partners, the sustainability of existing risk management processes, and likely changes to revenue streams as customer behaviour changes,’ Deloitte said.