Business and finance leaders in Shropshire today predicted a tough road ahead for the county, saying it would be “naive” to assume public sector cuts could be separated from the private sector.

Despite the majority of cuts announced today affecting Government spending, businesses in Shropshire are being warned they will not be immune.

Ian Davies, of Tranter Lowe Chartered Accountants in Wellington, said today’s review contained unprecedented measures and reforms to services.

He said: “The impact of the cuts on consumer confidence and the increased 20 per cent VAT rate will make the first quarter of 2011 very difficult.

“The assumption that 490,000 job losses in the public sector can be absorbed presents a huge challenge to the private sector.”

Geoff Parkes, of ASC Finance for Business in Shropshire, also believes the increase in VAT from January together with reduced disposable income from the public sector, means retail also needs to brace itself for a difficult few months.

He said: “The outlook is very uncertain and I would suggest even the Chancellor will be less than sure of the real economic outcomes of today’s cuts.”

Samantha Jones, of Morris Cook Accountants, added: “Many private sector businesses rely heavily on government contracts of one kind or another and it must be remembered that these cuts will have an effect on all sectors of business.

“For many years, money has been free flowing into the public sector.”

Jan Minihane, Shropshire small business advisor, said: “The huge swathes of public sector job cuts will lead to a significant increase in the number of start-up businesses and home workers.

“Many, if not all, will need help and support to succeed and so the upside for business support providers is more work should be available but probably more service providers fighting for the same work.”