NHS 'should not be ringfenced'

GOVERNMENT spending on the NHS and international development should not be ring-fenced, according to the Institute of Directors Scotland.

In a controversial 11th-hour attack on the coalition government ahead of tomorrow's comprehensive spending review (CSR), the business group called for infrastructure spending to be protected instead.

The IOD said ministers should plough money into the construction of roads, bridges and other public works in order to stimulate long-term economic growth.

Following the general election, Chancellor George Osborne promised not to cut spending on the NHS or overseas aid.

But the IOD warned the UK's "already creaking infrastructure" is going to suffer further because of the coalition's "salami slicing" approach to cutting the deficit.

David Watt, executive director-general of IOD Scotland, said: "The right way to help short-term aggregate demand and boost long-term aggregate supply is to protect infrastructure spending. Unfortunately the June Budget proposes to halve public-sector investment. We urge the UK government to revisit this decision in the CSR."

Watt added: "We are concerned that the coalition seems determined to ring fence NHS and international development spending. This is a political calculation and an economic mistake. Although uncomfortable, they should revisit this decision too."