Cabinet Secretary Sir Jeremy Heywood Warns of 20-Year Battle To Fix Britain's Economy

Cabinet Secretary Sir Jeremy Heywood has warned the government that it will take two decades to restore the UK economy to pre-recession levels.

Speaking at a Civil Service Live event in west London, Heywood added that the British economy will also have to endure "at least" four more years of austerity measures as it fights a "20-year generational battle" to bolster financial stability.

"This is not a two-year project or a five-year project. This is a 10-year project, a 20-year generational battle to beef up the economy in ways that we have not seen for many, many decades," said the UK's senior most civil servant.

Last week, Chancellor George Osborne announced that the government was slashing £11.5bn (€13.6bn, $17.7bn) in spending.

"Five years on from the bottom of the recession we have still not even near recovered all the output we lost in that terribly deep recession that we suffered in 2007-08. Those are really daunting numbers that just show the size of the challenge; there is no alternative," said Heywood.

He also warned that rebalancing the economy away from financial services and towards manufacturing was "much easier said than done."

"All the civil servants in the room will be well aware that the last three or four years have been tough. There have been years of austerity, years of pay freezes, of pay restraint; every part of government has been told by ministers - and rightly so - to hunt out waste and tackle inefficiencies," said Heywood.

"But despite all these efforts we have made over the last three years... our debt/GDP ratio is still rising, debt interest payments are rising. There is still an enormous amount of work to get that deficit down to a balanced level to get the debt/GDP level falling rather than rising."

However, Heywood praised the "remarkably smooth" spending review for 2015-16.

Osborne said there would be £50bn of capital investment in the 2015/16 fiscal year, including on roads, the rail network, and building new schools and homes, to help boost the beleaguered economy.