Government Budget – who is effect the most?

Gov contracts
Contracts and projects will see the biggest cuts, with savings of £1.7bn targeted.

Around 70 big suppliers to the Government are believed to be expected to renegotiate deals. The Sunday Times reckons large IT suppliers, such as IBM and Hewlett-Packard, have been put on notice to reduce the value of their contracts by 20-30%.

Other companies with big public contracts that could face cuts or contract renegotiations include consultancy and outsourcing groups Capita (LSE: CPI) and Serco (LSE: SRP), security firm G4S (LSE: GFS) and Metropolitan Police vehicles manager VT Group (LSE: VTG).

Recruitment freeze

The civil service recruitment freeze will apply across all Government departments and agencies, saving at least £120m. With the Government targeting a further £95m of savings in IT spending, it's perhaps not the best news for a company like Parity (LSE: PTY), which is not only the number four public sector recruitment firm, but also the leading supplier of IT and Project Management staffing across the public sector.

Other cuts

There may be individual listed companies that will suffer from other cuts, although they don't spring immediately to mind -- or to my mind at any rate.

There are, or are likely to be, cuts in the £1.7bn advertising, marketing and media spend and the £0.5bn+ that the Government spends on taxis, flights and hotels, but with few companies in these areas specialising in public sector provision, these cuts will probably be absorbed across the sectors.

Additional spending

While most of the £6.2bn of savings has been earmarked to reduce public debt, a small proportion -- £500m -- has been earmark for spending.

Business will get £200m. Capital investment for colleges and social housing, are the other main beneficiaries, signaling a commitment that may be some relief to companies involved in these areas such as Kier (LSE: KIE) and Mears (LSE: MER).