Business leaders are calling on the government to start cutting public services as soon as possible in an effort to reduce the budget deficit.
In news that will alarm many interims working in the public sector, the Institute of Directors (IOD) says the argument that lower public spending in the short term will threaten the recovery are flawed and too simplistic.
Launching its Business Manifesto 2010, the IOD also states its belief that fiscal tightening based on lower public spending and not higher taxation will be good for the economy and kick-start recovery.
A recent survey by the Institute found that 86% of respondents believed current levels of public sector spending need to be reduced, whilst 72% said that the cuts should start in 2010.
Commenting on the figures, Miles Templeman, Director-General of the IoD said the organisation was convinced of the need for swift action to tackle the budget deficit and this means making significant spending cuts in 2010.
The argument that early cuts would jeopardise the recovery is mistaken and the IoD believed that lower spending is likely to trigger a whole series of positive developments that will assist growth.
Graeme Leach, Chief Economist and Director of Policy at the IoD, said the manifesto sets out an ambitious plan to transform the UK's competitiveness. If implemented in full the UK could become the best place in the world to do business by 2020.