Cuts a 'chance for private firms'.

LOOMING spending cuts in the public sector could be a "private sector opportunity", an economic think-tank said today.

The Centre for Economics and Business Research (CEBR) said private firms had the chance to show they could make public sector savings without hitting services.

CEBR chief executive Douglas McWilliams said many private suppliers to the public sector faced lower spending levels.

But he added: "It is quite possible that public sector cuts are a private sector opportunity. What would be dangerous would be if the public sector tried to protect its own when making economies by cutting back on the external spend disproportionately to save public sector jobs.

"This would risk making the impact of the cuts on the services provided to the public much more severe than is necessary."

The CEBR said cutbacks were a "certainty", whoever wins the election.

The Prime Minister used the "cuts" word for the first time this week, official figures showed a further surge in public borrowing to pounds 65.3bn for the year so far, and Children's Secretary Ed Balls this weekend outlined plans to cut pounds 2bn from the country's education budget.

The think-tank expects pounds 60bn in cuts and pounds 40bn in tax hikes from Labour, and pounds 80bn in cuts and pounds 20bn in tax rises from an incoming Conservative administration.