International planning consultants RPS has criticised the Government for its "ad hoc approach" to reducing public sector spending.

The company, which earlier this year warned that the weak state of public finances here was putting pressure on its business, said activity during the first quarter was "reasonably encouraging." However, it said it had been forced to reduce costs due to the Government's approach to dealing with the economic crisis.

"As a result of continuing poor economic and financial news, it appears further reductions in public sector are being made by the new Government on an "ad hoc" basis," the company said in an interim management statement.

"In anticipation of this we have reduced our cost base further. This included the reduction of rented office space, which has required one-off exit payments. Whilst we continue to win market share and have a good short term order book, we cannot yet preclude further contraction of this business," it added.

The group's Irish arm has worked on a number of major road-buildings projects in Ireland in recent years including the Dublin-Belfast corridor and the Limerick tunnel.

RPS said that first quarter trading had been affected by the disruptive effect of flooding and cyclones in Australia. The result of this is that first-half profits are expected to be similar to last year, the firm said.

The firm said it balance sheet remains strong. It said net bank debt at the end of March 2011 was £36.6 million after investing some £12.2 million in acquisitions in the first quarter.