Move 10,000 jobs North and save £78m

May 22 2008 by Adrian Pearson, The Journal

THE Government could save £78m a year by moving 10,000 jobs from London to the North East, a report will say today.

A damning report by the Commons Public Accounts Committee has warned the Government that “the assumption that staff have to be in London should always be challenged” after revelations £325m a year is wasted nationally on inefficient use of offices.

The Government has previously been told it should move 20,000 jobs out of London, but the committee has gone further by saying spending chiefs are wasting taxpayers’ money on expensive property in London. The North East has been recommended as the cheapest region in which to run an office, with costs per square metre of £133 compared with London’s £507.

Hexham MP Peter Atkinson said the Government had to recognise “what is undoubtedly true”.

He said: “The Government could save a lot of money by moving a lot of back office jobs out of London, and it would go a long way to closing the North-South divide, which they have so far failed to do. They have promised to move jobs before and yet we see figures such as these showing what remains to be done.”

A National Audit Office report, on which the committee based its findings, found that of 877 buildings, 119 were in London and 127 in the South East. Just 8% of Government offices are in the North East. The NAO found the Government could make vast savings on offices, saying if it moved 10,000 posts from the dearest region (London) to the cheapest (the North East) it would cut gross annual costs by £78m.

The report is the latest in a series of reviews over more than six years in which the Government has been told to move more staff. There are still 47,000 in London and Government departments do not know how many need to be there.

Sedgefield MP Phil Wilson, who sits on the Public Accounts Committee, said it was time the Government “started thinking outside the box”.

He said: “What we have told them is that there is no reason why they have to use these buildings. There is nothing that should prevent any department from moving some staff out of London and the South East into places where accommodation and office space is cheaper.”

A Treasury spokesman said: “The Government has already achieved £23bn savings from its efficiency programme. The estate rationalisation programme has realised over £195m during the past four years.

“Departments continue to make strong progress towards the 2010 Lyons relocation target with over 15,700 posts relocated outside London. The Government’s High Performing Property Strategy issued earlier this year will achieve up to £1.5bn annual efficiencies from the civil estate by 2013.”

Timeline

April 2003: Chancellor Gordon Brown to appoint former Birmingham City Council chief executive Sir Michael Lyons to look at relocation as a way to tackle regional economic disparities.

September 2003: The North East Regional Assembly writes to Sir Michael arguing that, with North East unemployment the highest in the UK, the move could do much to close the prosperity gap.

November 2003: Chancellor Gordon Brown admits the review has been delayed because Sir Michael is waiting for the result of a separate efficiency drive.

March 2004: Sir Michael Lyons publishes his review urging the Government to relocate a substantial number of public-sector activities from London and the South East to other parts of the UK.

November 2005: Union leaders claim that since Gordon Brown announced his plans, only 150 jobs moved North.