Should we move public sector jobs out of London?

The BBC's move to Salford brought jobs to MediaCityUK, but its impact was limited across Greater Manchester

Briefing published on 10 August 2017 by Paul Swinney and Gabriele Piazza

Summary

This briefing looks at the impact of two notable cases of high-skilled publicly-funded jobs that have been moved out of London in recent years – the consolidation of the Office for National Statistics (ONS) in Newport and the move of part of the BBC’s national activities to Salford in Greater Manchester.

The relocation of public sector jobs is one of the most direct tools that policy makers can use to move jobs around the country. There is precedent for doing this already in the UK – for example through the opening of HM Revenue and Customs offices in Liverpool, Department for Work and Pensions in Newcastle and the Driver and Vehicle Licensing Agency in Swansea.

And political interest continues on this front. As part of its industrial strategy and rebalancing agenda, the 2017 Conservative Party manifesto pledged to move significant numbers of civil servants out of London and the South East to other cities in the UK.

Findings

The briefing sets out three key findings which have important implications for these ambitions

The move of the BBC has clearly had an impact on MediaCityUK. The presence of at least 2,000 jobs in national operations, and a further 600 in local ones, is in itself considerable. And there has been a wider impact – removing the estimated national and local moves of the BBC suggests that there were around 1,400 additional jobs in other businesses in the media sector. Given the industry had little presence in the area before the BBC’s move, it is highly likely that their location was the result of the BBC relocation. This is also likely to have supported growth in the hotel and hospitality sectors, though it did not increase the total number of jobs in retail.

However, much of the growth in media was down to displacement, particularly from elsewhere in Greater Manchester. Around 1,200 of the new jobs at Media City were in businesses which moved to Salford from other parts of the city region before 2011. Outside of MediaCityUK, the number of jobs in media in Greater Manchester declined between 2011 and 2016. While this may ultimately make the sector in Manchester more productive by concentrating jobs in one place and facilitating knowledge spillovers, it means that job creation figures should be handled carefully.

Beyond the MediaCityUK, the impact was limited. Between 2011 and 2016, in the one mile area around MediaCityUK, there was no growth in media jobs and growth in other industries is unlikely to have been linked to the BBC’s relocation. At the combined authority level, the contribution of the employment growth in MediaCityUK to Greater Manchester’s economy was fairly small.