Additional Information


Countdown to the spending review

The government's spending review is published today at 12:30pm; new research from RAPP looks at the possible impact it will have on brands and whether the potential cuts could damage hopes for the 'Big Society'.

Share this article

Much has been made of the impact of the Government’s spending review (unveiled today) on the public sector, but little on what the knock–on effect will be on the private sector.

Research carried out on behalf of marketing agency RAPP by the Trajectory Partnership paints a pessimistic picture of what consumers believe will be the fall-out from cuts estimated at between £60bn and £85bn.

The poll of a representative sample of over 2,000 people found that the majority of the British public believe the cuts will damage consumer confidence, result in an overall reduction in consumer spending, and see their own spending fall.

Attitudes to the cuts

It’s a gloomy prognosis for brands and retailers still struggling to recover from economic turmoil and fearing the prospect of a double dip recession.

The top line findings show that 62% of those polled believe the level of cuts will be too much; over half the population (55%) think the cuts will damage consumer confidence. And an even greater number, 67% believe the cuts will result in an overall reduction in consumer spending.

Given this, it’s not surprising that 64% say the cuts will see them reduce their own spending. And only marginally less - 58% - think the cuts will mean they have less money to spend.

What this means for brands

There is now clearly the real prospect of the UK entering a new age of austerity where people will rethink – or rather re-feel - what’s absolutely necessary to them personally and what’s not.  ‘Re-feel’ because we shouldn’t expect these decisions to be logical after a decade of free-wheeling consumer spending. New Austerity will pit the HDTV against the new Hoover, the premium FMCG brand against high street fashion like never before.  

People will refine and re-define their own priorities in order to protect their own sense of self, developing new coping strategies along the way. And it’s not going to be about brands that shout the loudest but brands that deliver the highest practical and emotional utility to their customers – they will be the ones that will form bonds strong enough to weather the storm.  

It’s also probable that groups of people making exactly the same set of choices will become smaller and smaller – putting the onus like never before on the marketer to really sweat the detail and target budgets with laser precision to win traction, influence and advocacy.

Much is rightly made these days about the importance of data and consumer insight and how vital it is to really understand consumer behaviour. What this research shows is that this will never be more crucial for brands wishing to prosper than in the post spending review environment.

Forget the Big Society – it’s all about the big self

The research also shows that, rather than breeding a sense of camaraderie in adversity, the potential cuts seem only to have fostered a greater sense of self interest. Look at the areas where consumers would cut most - the budget for international development would be slashed by over 30% if the public had their way.

Similarly, culture, media and sport would lose nearly 27% of its budget, with climate change and energy being hit by over 22% - all areas clearly not deemed "essential" and not impacting dramatically on the individual.

Suggested cuts to departments (%)

At the other end of the scale, areas that would be cut least by the public are schools (2.7%); health (also 2.7%) and pensions (2.5%) - all clearly going to impact more fundamentally on day to day life.

Age also plays a part when it comes to self interest. Young people (16 to 20 year olds) who are less likely to need the NHS are willing to make much bigger cuts in health spending than older people. Similarly, the young would double the cuts in pensions compared to older people.

And what about national prejudices? The English and Northern Irish would cut Westminster funding for Scotland by over £4bn whereas the Scots would subject themselves to only £1bn in cuts. The English would cut funding for Wales by £1.9bn while the Welsh would only cut spending by £0.6bn.

The impact on popularity

 Pre-election, many warned that winning could well be a poisoned chalice given the scale of the country’s economic woes. This is reflected in varying degrees in the research results when consumers are asked about how they voted in the last election and how they might vote in the next.

Voting Intentions

The Conservatives have seen a decline. Some 31% voted Tory last time and only 25% would vote the same way in the next election. Labour has edged up marginally - 20% having voted for them last time, 22% suggesting a Labour vote next time round.

But it’s the Conservatives’ coalition partners who really suffer, down from 21% to 7% - a clear indication that many votes believe they have "sold out" in the post election period.

Ultimately it is clear that the post spending review environment will provide new challenges for marketers - how they fare will depend largely on how close they can keep to their customers.

View of public spending

Gavin Hilton, director, consumer experience, RAPP London

Before commenting please read our rules for commenting on articles.

If you see a comment you find offensive, you can flag it as inappropriate. In the top right-hand corner of an individual comment, you will see 'flag as inappropriate'. Clicking this prompts us to review the comment. For further information see our rules for commenting on articles.

comments powered by Disqus

Additional Information

Latest jobs Jobs web feed


The Wall blogs

The Power of Colour External website

by Ardi Kolah, 17/04/2014


Forget about the BRICS External website

by Dan Foreman, 17/04/2014


Back to top ^