Last week, our report Should we move public sector jobs out of London? generated a strong response in the press and on social media. We welcomed this discussion, as encouraging debate on urban economic issues is part of our mission as a think tank.
The response largely focused on our analysis of the BBC’s move to Salford, with a number of people asking us about the rationale of the report and the methodology we used. This blog addresses the most commonly-asked questions we’ve received since the report launch.
Why did we look at the BBC’s move to Salford?
Public sector relocation as a tool to boost economic growth is currently high on the political agenda, with the Conservatives’ commitment to move civil service jobs out of London and the imminent announcement on the future of Channel Four. At least a half dozen places have bid to become the new home of the broadcaster – but as yet, we don’t fully understand what the economic impact of this kind of relocation actually is. In this context, the BBC move to Salford was the ideal case-study to shed light on this question.
What were the findings of our analysis of the BBC relocation, and did they differ from existing studies on this topic?
One of the aims of the BBC’s move to MediaCityUK was to bring economic benefits not just to Salford, but to the wider Greater Manchester economy – including an estimated 15,000 jobs across the region.
We found that there was significant jobs growth in MediaCityUK, with the BBC’s relocation resulting in 4,600 jobs at the site. The new jobs were mostly in the media sector, and more than 1,000 of them resulted from displacement from other parts of the city region. The direct impact on employment in Greater Manchester was small – when we take displaced jobs out of the picture, the total number of jobs resulting from the BBC relocation amounts to around 0.3 per cent of total employment across the city region.
Interestingly, other studies that looked at this issue found broadly similar results. A KPMG report commissioned by the BBC Trust in 2015 estimated that the move to Salford led to the creation of 3,778 jobs (both within Greater Manchester and across the rest of the country). Another study by freelance data analyst Tom Forth also showed that BBC had a positive impact, and that this was so far largely limited to the TV, radio and film industry.
Why did we focus on employment, rather than other factors?
There can be lots of potential reasons to relocate public sector jobs across the country, from raising the profile of a place, bringing cultural prestige and improving regional representation in national public bodies. However, as an economics think tank, our aim is to measure the impact of public sector relocation as an economic development tool.
Ideally this would have involved looking at the impact on both productivity and employment. However, the productivity data available is not particularly fine-grained, and doesn’t allow for analysis at the geographical areas we wanted to examine (see the following point).
We were, however, able to look at the impact on employment using the ONS Business Structure Database. This dataset is very fine-grained as it includes individual records of businesses in MediaCityUK and its neighbouring areas. This allowed us to examine the impact of the BBC’s move on jobs in more detail than in existing studies.
Why did we look at the impact within a 1 and 2 mile radius of MediaCityUK?
Our recent briefing ‘Why don’t we see growth up and down the country?’ shows that firms – especially high-knowledge ones – do not choose to locate and create jobs just anywhere, but instead tend to concentrate in particular places, close to other related businesses.
As such, if the BBC’s move to Salford had an impact on the wider economy, we would expect the broadcaster to not only act as an anchor for the media sector by attracting businesses in this industry, but to also generate more jobs by attracting firms in related sectors.
To measure this, we first looked at MediaCityUK itself to gauge the direct impact of the relocation, and one and two miles radii around the BBC site which enabled us to see whether there was a multiplier effect on the surrounding areas. The result was that jobs in media-related industries did concentrate in MediaCityUK – but the impact in neighbouring areas was relatively small.