HISTORIC PRESS RELEASE : 20,000 Civil Service jobs should move from London with more to follow [March 2004]

The press release issued by HM Treasury on 15 March 2004.

Sir Michael Lyons challenges Government to mainstream decentralisation of public sector activities out of London as a means for improving public service efficiency, regional competitiveness, and devolution. The final report from his Independent Review of Public Sector Relocation,  – ‘Well Placed to Deliver? – Shaping the Pattern of Government Service’ was published today.

In his report to the Chancellor, Gordon Brown and the Deputy Prime Minister, John Prescott, he confirmed that departments have identified some 20,000 jobs that could move out of London and the South East and recommended that they should urgently take forward their relocation plans in the context of the forthcoming Spending Review. A further 7,000 posts would no longer be required, as a result of efficiency measures.  Potentially, over £2 billion could be saved over 15 years as a result.

Sir Michael made ten key recommendations. As well as departments’ moving quickly to implement their relocation plans, some of the recommendations were that:

• Government should be prepared to make the necessary investment;
• there should be a strongly enforced presumption against London and the South East for new activities and many other functions;
• London headquarters should be radically slimmed down;
• there should be greater coordination between departments in relocating activities; and
• Government must take responsibility for the whole pattern of its locations.

Full details of Sir Michael’s recommendations are attached at annex a.

Commenting on his report, Sir Michael Lyons said:

“I am grateful to departments for their cooperation.  I believe that a new pattern of government service will contribute significantly to Government’s policies for the reform of public services, improving regional growth, national competitiveness and devolution.  Government needs to take firm action to recast the pattern of its business in a way that better meets the needs of the nation in the new century.  I am certain that Government can meet that challenge.”

Sir Michael argues that the pattern of government has to be reshaped.  The concentration of national public sector activity in and around London is no longer consistent with Government objectives. It does not reflect the large cost disparities between London and the rest of the country. Neither does it correlate with the benefits of dispersal for the efficient delivery of government business or for the regional economies.

Sir Michael acknowledges that as the capital, London needs a governmental core supporting ministers and setting the strategic policy framework.  However, in every other respect, the status quo is open to challenge.  And, if Government wishes to make a significant impact on the pattern of its locations across the country, it will need to take firm action in the coming years.

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1. In April 2003, the Chancellor and Deputy Prime Minister asked Sir Michael Lyons, Director of the Institute of Local Government Studies at the University of Birmingham, to conduct an independent study into the scope for relocating a substantial number of public sector activities from London and the South East to other parts of the United Kingdom.

2. Departments have identified about 27,000 posts which could go from London and the South East.  Of these, 19,700 are candidates for relocation, whilst 7,500 are expected to disappear as part of efficiency improvements.

* The Chancellor has indicated since the review that he expects some 5,000 posts from his departments to be relocated