A UK woodworking industry chief has expressed concern at the scale and speed of the government’s prospective cuts to public sector capital spending following the chancellor’s pre-budget report.

As well as a 50% decrease in capital investment over the next four years, Alistair Darling’s pre-budget report also contained a 0.5% national insurance increase from April 2011, a shelving of a 1% rise in corporation tax for small firms and a household boiler scrappage scheme.

“Everyone knows it was going to be difficult,” said British Woodworking Federation chief executive Richard Lambert.

“What is quite disappointing is the real reining back in capital spending. It was quite a surprise to see how fast it’s being reined back. Public sector is what has kept the construction industry afloat.

“There’s a real worry that things will get worse and that public sector spending is cut quicker than the private sector can catch up.

“By mid/end of 2010 and into 2011 the private sector should really start to feed through, but it’s going to take time. The majority of joinery companies saying they are doing well at the moment is because their prime markets are in the public sector.”

Mr Lambert said the national insurance increase would increase the cost of employment for employers. “Everyone accepts that you have to increase tax revenues but making it harder to employ people in the current climate does not help.”

He also thought the government underestimated the contribution made by the construction industry to the economy, citing Construction Products Association figures which say for every £1 of capital spending cut, an additional £2.84 would have been generated in economic activity.

Mr Darling forecasts growth of 1-1.5% next year and 3.5% in 2011/12.