Terry Murden: Slaying sacred cows is not on but some judicious surgery is needed

ONE certainty in tomorrow's comprehensive spending review is the protection that will be afforded to the National Health Service. Ring-fencing the NHS budget is guaranteed, though the coalition government will demand greater value for money in return, including better ways of working and improvements in productivity and spending practices.

Speaking against the ring-fencing policy is not popular in political circles, but business groups have questioned the wisdom of continuing to pour money into this mother of all public-sector budgets while all else must play second fiddle.

The Institute of Directors Scotland goes so far today as to say that the government is making a mistake and should instead be protecting what it terms strategically important transport, energy and IT infrastructure spending, the argument being that this would boost the supply side of the economy.

Although a little late in the day, given that the big decisions were taken over the weekend, its concerns play well to those who believe the CSR should be a balanced attempt at reducing the hole in the public finances while encouraging growth.

The IOD stresses that it supports the coalition's plans for cuts rather than higher taxes to reduce the deficit and follows the call from a group of business leaders yesterday for the government to cut deeply and decisively to avoid paying later in higher interest rates and further tax rises.

There are echoes in the IOD statement of earlier demands. Last month the CBI warned the government that it risked damaging Britain's economic prospects "for years to come" if it slashed spending on transport and building projects, urging ministers to find 20 billion of extra savings by making deeper cuts to the welfare budget and running the public sector more efficiently. The CBI argued that the treasury could divert this money into building roads, rail and building projects and remain on target for eliminating the deficit by 2015.

It looks as if at least some of those calls have been heeded. The welfare budget is being tackled.

But the NHS remains the sacred cow, never to be slain. Of course everybody wants to retain front-line services.

But essential services, not the cosmetic treatments that can be paid for through private care, or the inefficiencies in the system that even those who work for the service admit exist in abundance.Speculation grows over changes in MPC members' stances

TOMORROW may be a key day for the public finances but it is also when the minutes of the last meeting of the Bank of England's monetary policy committee are published.

The focus of the monthly gatherings has switched from what members will do with interest rates to whether or not there will be more quantitative easing, or buying of government bonds which could impact on the pound.

There has been an assumption that the MPC is split three ways with one member demanding more QE - Adam Posen, pictured right - one calling for a rise in rates - Andrew Sentance - and the seven others preferring the status quo.

Market analysts will be eager to find out if any of this latter group have shifted to either of the two other camps which will set the scene for the next meeting in November which is expected to be the first at which a change of direction could be implemented.

By then the MPC will have the benefit of Chancellor George Osborne's spending decisions and the latest figures on GDP and inflation.

TV companies tuned in to the latest technological moves

FOR a long time it looked as though ITV was on the way out, squeezed by the threat of multi-channel television and a bust business model.

STV took a huge gamble by selling assets in cut-price deals and reinventing itself as a pure television and digital media play.

But both now seem to be thriving. ITV's massively successful X-Factor has rejuvenated the channel while STV's commissions with the BBC suggest it can compete on the periphery of the television jungle.

KBC Peel Hunt has initiated coverage on both companies and UTV with a broadly positive stance. It is more cautious on UTV because of its exposure to a weak Irish economy, but sees a strong rebound in television advertising next year that should benefit all three companies. It predicts national advertising revenue growth of around 3 per cent next year and a conservative 4 per cent in 2012.

The broker is particularly taken with attempts to develop multi-media platforms that allow viewers to watch content where and when they want and on whatever device they choose.

Because of developments such as next-generation HD sets, viewers are watching more television in 2009 than in 2004 when the picture looked a little more hazy, although the figures may mask a dip in STV viewers caused by its controversial decision to opt out of ITV programmes. Viewers and advertisers will decide whether it is right or wrong to persist with this policy.