Businesses which have contracts with Cornwall Council are bracing themselves for the knock-on effects of £110 million worth of spending cuts.

On Tuesday council leaders said around 2,000 jobs are to go in anticipation of a fall of 30 per cent in central Government funding.

Contracts with suppliers and businesses will also be under the spotlight in a bid to curb costs.

Kevin Lavery, chief executive at the council, said the cut-backs would have a "knock-on" effect on the wider Cornish economy.

Jason Walters, 26, who has helped run family firm Darley Ford Travel in Liskeard, South East Cornwall for the past seven years, fears the firm's contract to supply school bus services could be in jeopardy.

He said: "We're really worried about these cuts. The council is obviously going to be looking for the cheapest option.

"We have 15 people working here and may have to make some redundancies if we are squeezed on price and the business starts to suffer.

"Also if we don't make a reasonable profit, maintaining the vehicles could become a problem."

Tim Jones, chairman of Devon and Cornwall Business Council, said: "These cuts will push Cornwall into a deeper recession.

"The ripple effects of these job losses is enormous because the people affected will not have the disposable income to spend in the village shop.

"The supply chain is definite going to feel the pinch.

"We understand why Cornwall Council has to make these cuts but would ask that in order to cushion to the blow to businesses they carry out the process in phases."

Yesterday council chiefs revealed they had reduced the amount the authority spends on using consultants by millions of pounds.

Over the past two years the council has cut spending on consultants by more than £4m from the £15.4m spent by the former County Council in 2008/2009 to £11.2m in 2009/2010.

Council leaders said the amount spent on consultants would shrink by a further 33 per cent over the coming year.

In the first three months of 2010 the authority spent £1.4m compared with £2.1m in the first three months of 2009/2010.

Mr Lavery, said: "Cornwall Council has gone through a period of massive change over the past two years to merge the former County Council and six district and borough councils into a new unitary authority with 21,000 members of staff and an overall budget of £1.2 billion.

"Delivering this transformation at the same time as ensuring that frontline services continue to be delivered to local people has been an enormous challenge which has required the council to develop new ways of working. Although the council has a highly skilled and committed workforce, it recognised that it would need to bring in specific expert advice to support staff in some key areas."

Mr Lavery said consultants were used when the council could not carry out the work in-house, adding: "It would be very difficult and expensive for the council to permanently employ all the detailed experience and expertise it might ever need."