Three Reasons Not To Get Excited By A Big Whitehall Relocation

The Government Property Agency is at work on plans to relocate up to 22,000 civil servants out of London, with Birmingham and Manchester believed to be on the shortlist.

According to senior sources the proposals are looking more promising than several decades of previous attempts to relocate a large part of Whitehall away from the south east.

Clearly a large relocation will involve a substantial office requirement: Manchester’s council leaders are readying a site capable of taking a 1M SF development.

Something similar could land in Birmingham, where plans were already in train to relocate 1,700 civil servants to a new government hub at 102 New Street. 

But the history of major government relocations is not good. The wave of 1980s relocations that took the British Council to Manchester was rapidly unwound and other more recent relocations, like that of the Office for National Statistics, have not proved to be happy.

Now analysis from the Institute for Government casts doubt on the economic rationale and the botched decision-making that could leave a large-scale relocation punching below its weight, or eventually being reversed.

Here are three reasons from the Institute for Government report for being cautious. You can read the full report here.

1. The Civil Service Thinks Backward

Instead of figuring out the strengths of regional labour markets, and relocating jobs to the locations most likely to deliver, the civil service decides what jobs it will not miss in London, and moves them instead. This means the local labour market isn’t necessarily well prepared to fill the gap; that relocating staff carry resentment about their new home, or do not relocate, or soon move back home to London; and the selection of jobs moved does not necessarily combine to make a steady career path for new recruits or relocated civil servants.

When the Office for National Statistics relocated from London to South Wales, it lost 90% of its staff. Local skills did not match ONS needs, and in 2014 it partly reversed the move by beefing up its London operation.

“Departments have often relocated roles they thought their headquarters could do without, rather than thinking about how they could build a viable and dynamic regional presence,” the Institute for Government said. “Meanwhile, the career benefits of ministerial exposure, as well as the perceived need to travel, have limited the ability of departments to persuade senior policy officials to head to — and stay in — offices outside London.”

2. Politicians Have Muddled Objectives

Boris Johnson’s government included a large-scale relocation of civil service jobs away from London as a way to “level-up” regional economies. Unfortunately this is something it probably can’t achieve. 

Outposts full of back-office jobs will deliver only marginal boosts to the local economy. A back-office outpost will not create career structures in the regions, or attract well-educated graduates to stay in regional cities, both steps that might boost local economies.

“Success means creating dynamic, vibrant new offices — not isolated outposts — which broaden the range of talent on offer to the civil service, while minimising disruption to departments’ work," the report said. "This is not necessarily inconsistent with ministers’ goals of boosting local economies or injecting more of a ‘northern’ perspective into the civil service. But in most cases, relocating with the primary goal of talent attraction and retention is more likely to improve the quality of the civil service and its work. 

“There is relatively little robust, quantitative evidence of the economic benefits of relocation,” it added.

The good news is that Birmingham and Manchester hubs may include some of the senior, policy roles that help provide career structure.

“The government’s proposed hubs that have a designated policy focus should help bring together relevant civil servants from different departments and build critical mass. These hubs include transport in Birmingham, health in Leeds and culture in Manchester,” the institute noted.

3. The Civil Service Is Already In The Regions

The relocation of 22,000 civil servants from London sounds like a big deal but in context, it is more modest. Today 22,000 civil servants equates to just 6% of the civil service workforce already operating in the UK regions.

Only around 20% of the UK’s 456,000 civil servants are based in London, although policy and senior roles are disproportionately based there, amounting to roughly two-thirds (64%) of civil servants who work on policy. Other professions concentrated in the capital are economics (75%) and communications (53%). Those working on operational delivery are more likely to be outside London.

London not only has more policymakers, but more senior staff. In terms of civil service grades, the higher the grade of the civil servant, the more likely they are to be based in London: 68% of senior civil servants and 45% of grades six and seven are in London.

Today 6% of the civil service is based in the West Midlands, and 12% in the north west (a reflection of regional populations) but just 3% of senior staff are in each region.

If the government relocated the policymakers, and the senior staff, that might be interesting, but this is not currently being proposed on a large scale.