Away we go: More civil servants to leave Whitehall

Approximately 15,000 civil servants will be relocated from London to the provinces over the next five years if measures included in this week's budget are realised. In a move designed to slim Whitehall down to an "irreducible core" and break the hold of the "London Magnet" the plans will also make organisational changes that will cut across traditional departmental divisions and could drastically shift civil service culture. Although long expected as a further phase of the relocations that stemmed from the review by Sir Michael Lyons in 2004, the latest proposals have been formulated by former Reed Elsevier and Taylor Woodrow chief executive Ian Smith in an independent review commissioned by the chancellor and published simultaneously with the budget. Smith points out that about 16% of civil servants are currently based in London – 65% of them in close proximity to Whitehall - but they occupy offices that cost £600m a year, about a quarter of the national total. A more streamlined and tightly knit Whitehall Smith envisages a more streamlined and tightly knit Whitehall centre comprising just ministers and the activities needed to support them. The proposed relocations will liberate more than 2 million square feet of London offices which, because both property and salaries are markedly more expensive in London than the provinces, will save an estimated £160m annually. Furthermore, Smith believes that the government should aim for a longer term reduction of London's civil service workforce to around two thirds of the current 85,000 jobs. More efficient working practices would enable property reductions to be more severe than that. Major cultural changes can also be expected. The Smith review not only sets out numerical targets but recommends a dramatic, strategic and cross-departmental rethink in the way that government departments regard the property that they occupy. The review recommends that government offices in London are managed as an integrated campus. Perhaps envisaging resistance the review says management will need to be more "directive" to foster greater co-ordination between departments. Joined-up thinking is also required in the provinces and Smith says that each government region would develop a property asset management strategy working with local government on the Total Place model. Saving tax pounds Smith says his recommendations would save tax pounds by reducing the central London estate and lowering operational costs but he acknowledges that the high cost of relocating staff makes the economic case hard to prove without taking into account the wider benefits. He says the moves will stimulate economic vibrancy in the regions by developing clusters of international competitiveness, bring government closer to the people, and promote efficient and fit-for-purpose public sector campuses in the regions. Reacting to the proposals Stuart Morley, head of research at property consultant GVA Grimley, says, "the question remains as to which regional business hubs will be best equipped to attract this new influx of relocations. "Greater Manchester, Merseyside and the West Midlands will be among those regions that are likely to feature strongly during the relocation programme. We don't believe the smaller towns are supported by the demographic profile required to capture the larger relocations such as the Ministry of Justice regional hub. However, Swindon and Derby have a strong offer to make for smaller requirements." Meanwhile an analysis by another property consultant, Cushman & Wakefield, concludes that Belfast and Cardiff provide the best value with cost savings over 10 years in excess of 40%, taking into account employment costs and the expense of relocation.