Kiss goodbye to the Lyons' share of jobs

Oct 26 2006 By Ross Smith, The Journal

Plans to shift 20,000 civil servants out of London will fail to benefit the North, a top consultant claimed yesterday.

And even if staff were to move to the region, they would be unlikely to boost the economy unless they held top research posts, Deloitte director Phil Holt said.

The financial services firm's head of regional development told a Northern regeneration conference in Rotherham he did not expect the policy, announced by the Lyons review in 2004, to meet expectations.

"I haven't seen a recent analysis of Lyons relocations, but I'm quite confident the reality will fall short of the intention to provide a boost to the North's economy," he said.

"With the public sector accounting for 60% of GDP in some parts of the region, more civil servants are unlikely to increase wealth generation, said Mr Holt, who has advised on Newcastle's Discovery Quarter, Science City and Great Park projects.

"This could lead us to question the merits of Lyons-style relocation," he said.

"Unless the relocation is of functions which have the capacity to generate wealth creation opportunities because they're in high level research such as health, defence or forensic sciences, they won't generate research and development capabilities across the North."

Newcastle is currently bidding to house a new health research centre. So far, the region's only gain from Lyons is a centre for dealing with Lottery funding applications.

Mr Holt said: "Many ministers' hearts may be in the North, but an awful lot of votes are still in the South." But John Holmes, head of regeneration at regional development agency One NorthEast, said last night it was still keen to attract civil servants. He said: "We're pitching for all sorts of jobs. We'll take anything that comes out of relocation.

"We would like the R&D jobs, but it's important the North-East markets itself as fit for business. We've got a whole range of accommodation that would accommodate those relocations."

Mr Holt said the North-East needed to offer a skilled workforce and good infrastructure to attract companies to invest.

Cash incentives will no longer attract firms in the way they did in the 1980s and 1990s, he said: "Companies don't invest in locations on a `jam tomorrow' basis."

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