Prime Minister Gordon Brown's Labour government, trailing in opinion polls, says the opposition Conservatives would make big cuts in public services. The Conservatives accuse the government of playing fast and loose with the public finances but have pledged to protect frontline services in schools and hospitals.
The Audit Commission chief said the real choice at the next election was on the balance to be struck between tax rises and spending cuts, and where they should fall.
'First, let's dismiss the notion that the choice facing voters next year will be between cuts and investment in public services,' Mr Bundred said.
'Both parties know that savings are necessary and they may need to be greater than the mooted 10 per cent of current spending levels.' The government is hoping Britain will pull out of its deepest recession in 50 years by the end of the year, boosting voters' morale and making the budgetary arithmetic slightly easier.
Mr Bundred said the government would struggle to meet its borrowing targets even if the economy did pick up.
Public borrowing has exceeded the government's target for most of the past decade and is now running at its highest level since World War Two. Analysts fear further deterioration in Britain's fiscal credibility could push up debt servicing costs.
A report in the Sunday Times said senior civil servants were drawing up secret 'doomsday' plans for 20 per cent cuts in public spending amid fears that politicians were failing to tackle the deficit.
Mr Bundred said health and education workers should not be exempt from the austerity measures, particularly as they had done well over the past decade.
'Don't believe the shroud wavers who tell you grannies will die and children will starve if spending is cut. They won't,' he said. 'Cuts are inevitable and perfectly manageable.' -- REUTERS