Report recommends shifting 20,000 government jobs from London

A government commissioned report has recommended that up to 20,000 jobs should be moved out of London and the South East to other regions inside the next 15 years saving taxpayers up to £2 billion.

The treasury report, 'Independent Review of Public Sector Relocation', has identified 20,000 jobs that could be moved to the regions and further 7,000 jobs that could be axed.

Sir Michael said: "I conclude that the pattern of government needs to be reshaped. National public sector activity is concentrated in and around London to an extent which is inconsistent with government objectives.

In particular this pattern fails fully to reflect the large cost disparities between London and other parts of the UK and the revealed benefits of dispersal for the efficient delivery of government business and for regional economies."

Sir Michael, who is Director of the Institute of Local Government Studies at the University of Birmingham, has made 10 main recommendations in the review:

• departments identified 27,000 jobs that could be taken out of London and the South East;
• major dispersals are unlikely to offer a quick payback and they incur considerable costs up front;
• departments should implement their relocation plans alongside efforts to align their pay with local labour market conditions;
• Whitehall headquarters should be radically slimmed down;
• a strongly enforced presumption against London and South East locations for new government bodies and activities;
• Cabinet needs to give continuing political impetus to the locational agenda;
• permanent secretaries and other public sector chiefs should ensure the locational aspect of business planning;
• government must take responsibility for the whole pattern of its locations, developing a strategic framework;
• government office moves from London should be coordinated to ensure overall value for money;
• civil service needs a more coordinated approach if it is to minimise the costs and the adverse impacts on staff associated with relocation and redundancy.

Sir Michael said: "These actions will help create a better pattern of government. By setting a good example, the government may also promote more rigorous thinking about location in the wider economy, in the interests of UK competitiveness."

Sir Michael's remit from the Chancellor and the Deputy Prime Minister was to conduct an independent study into the scope for relocating a substantial number of public sector activities from London and the South East of England to other parts of the UK.

Chancellor Gordon Brown is expected to comment on the report in his budget speech tomorrow.

(SP)