12 September 2003
Many public sector activities may soon be forced to relocate outside London and the Southeast.
This is one of the conclusions of an interim report on government plans to shift more than 20,000 central government jobs out to the regions, trailed in Public Finance last week. The full report is due in November.
Almost a third of 700,000 civil servants currently work in London or the Southeast. Sir Michael Lyons, who is heading the relocation review, said: 'The fact that civil service numbers in London are growing suggests that Whitehall thinking is not as sharp here as it could be and that managers are not reacting sensitively to price signals.'
London is still the 'default location' for many national public sector activities, despite official guidance to the contrary, he notes. Mechanisms may need to be put in place 'to reinforce the presumption against London', the report says.
Chancellor Gordon Brown has made a start by freezing any moves by government departments to renew or take on property leases in London or the Southeast, without first consulting the Treasury.
The cost of accommodating government call centre staff can be several thousand pounds higher per workstation in London than in the rest of the country, says the report. There are also 'significant cost savings' to be made from lower labour costs and improved recruitment and retention.
The chancellor, who commissioned the relocation review in his April Budget, said: 'I am convinced that further decentralisation of public sector activities can lead to improved service delivery as well as provide a good deal for the taxpayer.'
Deputy Prime Minister John Prescott said the report provided 'a good opportunity for departments to consider the regional balance of their activities across the United Kingdom'.
The Office of the Deputy Prime Minister, along with the Department of Trade and Industry and the Department for Environment, Food and Rural Affairs, are believed to be in the frame for large-scale job transfers to the provinces.
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