The Confederation of British Industry has said that the Coalition government should protect economic growth in its upcoming Spending Review.
While the CBI said it supported spending cuts in order to avoid major tax rises, the business group called on the government to "protect investment in areas that do most to foster economic growth", such as infrastructure, research and development and education and skills.
As specific examples the CBI said that the government's current transport assets need to be maintained and added that work on the Crossrail project in London must continue. The CBI also said that the government should attempt to attract more private sector funding for transport.
John Cridland, CBI Deputy Director-General, said, "The Government rightly decided to limit public spending. The alternative would have been tax rises and other consequences that would have damaged the economy for years to come.
"Cutting spending means tough choices. We think that the need for economic growth, not the noise of the loudest voice, should determine where cuts are made.
"The Government must improve the efficiency of public services and focus the limited public money available on areas that do most to galvanise growth."
Ian McCafferty, CBI Chief Economic Adviser, said, "Cuts will necessarily affect GDP growth in the short term, but smart choices will give the economy the ability to grow. The Government must use its limited resources to support a healthy private sector recovery so it can pick up the slack from the public sector.
"Given the very high returns that new infrastructure offers, the planned cuts to net public sector investment are a concern. Public sector capital investment should be returned to 2.25% of GDP as soon as possible. We also need to invest in building up our knowledge and skills base as this will help boost our competitiveness.
"At the same time, the efficiency of government must be improved across the board. This twin approach to prioritising public spending will help smooth the path to Budget balance, helping the public finances return to a more sustainable footing."