Rumours are getting ever louder about the Government’s imminent relocation of public sector jobs from London further north: MHCLG to Wolverhampton; DCMS to Manchester or Leeds; and the Treasury’s economic campus in Darlington.
As is the way of these things, the moves have already been branded as ‘transformational’. It’s not public sector jobs that will make a difference though – to level up we need to be transferring power.
There is a long history of governments placing jobs out of London. The civil service campus in Newcastle, which is home to HMRC and DWP, was built after the Second World War. The DVLA has been based in Swansea since it was founded in 1965. More recently a large part of the ONS was moved to Newport and part of the BBC moved to Greater Manchester.
The ONS’ move to Newport was criticised in Charlie Bean’s review of the ONS a couple of years ago. It found that only seven senior staff moved from London, and the quality of the ONS’ work had suffered as a result. Centre for Cities’ assessment of the BBC’s move to Salford was slightly more positive – it showed that five years after opening, it had brought 4,500 jobs to Greater Manchester – around 2,000 from the BBC and up to 1,400 from other businesses co-locating. These figures though were well below the inflated forecasts of the impact (15,000 jobs), and a drop in the ocean compared to the size of the Greater Manchester economy.
While the moves will have some benefit for the lucky few selected, by their very nature they can only benefit a handful of places. There are only so many government departments or other bodies that can be moved, which includes creating new ones, like the National Infrastructure Bank that the Chancellor announced at the Spending Review would be in the North.
It is also worth noting that these decisions appear to be taken without due consideration of the functioning of government. This may not be a priority. But at the very least, given that many civil servants move departments to get promoted, having a single department in a city may make it a less appealing choice.
Giving real power to places comes not from the relocation of the powers of central government, but instead by transferring powers from central to local government. Similarly, the aim of levelling up the economy should not be the transference of a couple of thousand public sector jobs to some places, but the creation of tens of thousands of private sector jobs. An important part of this is to empower local government, allowing it to tailor policy to make the area that it manages become a more attractive place to do business.
What’s more, in transferring these powers there would also be a transference of jobs, which would make positions in the DfT, BEIS and MHCLG redundant. The UK would become more like Germany in this respect. In the UK, central government employs 61 per cent of public sector workers (3.3 million out of 5.2 million). For broadly comparable sectors in a much more decentralised Germany, only 10 per cent of public sector employees (500,000 out of 4.8 million) works for the federal government, compared to the Laender and municipalities.
The relocation of public sector jobs is a headline grabber. But it will not be ‘transformational’. To level up, the government can’t reach for the easy option of the moving of a couple of departments north. Instead, it must publish its Devolution White Paper that sets out how it will reorganise and empower local government.