09 July 2004
The Chancellor and Deputy Prime Minister asked Sir Michael Lyons, Director of the Institute of Local Government Studies at the University of Birmingham, to conduct an independent study into the scope for relocating a substantial number of public sector activities from London and the South East of England to other parts of the United Kingdom. Sir Michael has completed his review and on 15 March 2004 published his report, ‘Well Placed to Deliver? – Shaping the Pattern of Government Service’.
"Well Placed to Deliver? – Shaping the Pattern of Government Service" is available below in Adobe Acrobat Portable Document Format (PDF). If you do not have Adobe Acrobat installed on your computer you can download the software free of charge from the Adobe website. For alternative ways to read PDF documents and further information on website accessibility visit the HM Treasury accessibility page.
Sir Michael confirms that government departments have identified some 20,000 jobs that could move out of London and the South East and recommends that they should urgently take forward their relocation plans in the 2004 Spending Review. A further 7,000 posts would no longer be required as a result of efficiencies. Potentially, over £2 billion could be saved over 15 years as a result.
He concludes that the pattern of government has to be reshaped. The concentration of national public sector activity in and around London is no longer consistent with Government objectives and does not reflect the large cost disparities between London and the rest of the country or benefits of dispersal for the efficient delivery of government business or for the regional economies.
Sir Michael acknowledges that London, as capital, needs a governmental core supporting ministers and setting the strategic policy framework. However, in every other respect, the status quo is open to challenge. And, if Government wishes to make a significant impact on the pattern of its locations across the country, it will need to take firm action.
Full details of Sir Michael’s recommendations may be found on page 3 of the report.
The Government welcomed Sir Michael Lyons’ report and in the Spending Review has now accepted all of the recommendations brought forward by him, and confirmed plans for the relocation of 20,000 posts. Its responses to those recommendations are set out as follows:
1. Take forward relocations - departments have confirmed 20,000 jobs for dispersal from London and the South, which should be completed by 2010.
2. Provide investment and incentives for relocation - the 2004 Spending Review allocates the resources that take account of relocation plans, including contributions from the Efficiency Challenge Fund, which will be deployed, amongst other things, to assist with upfront costs. The Government will continue to review the incentives for encouraging location out of the South East.
3. Align pay with local labour market conditions - the Government recognises that pay flexibility is an important part of achieving its objectives for efficiency and regional development. Departments will address specific recruitment and retention pressures by pursuing pay policies that reflect local labour market conditions wherever possible.
4. Slim down Whitehall headquarters - many departments are fundamentally reviewing the size and functions of their London headquarters. As part of the implementation of efficiency proposals there will be continued focus on this issue.
5. Enforce presumption against London and South East - there will be a presumption against South East locations for all government functions other than face-to-face services. This will be reflected in guidance to departments.
6. Ensure leadership for location decisions - the Lyons Review is being taken forward as part of the overall implementation of the Government’s efficiency programme.
7. Integrate location issues in business planning - the efficiency implementation framework will ensure that locational considerations are mainstreamed in departmental planning. In particular, Finance Directors will be expected to take full account of location in their business strategies.
8. Take responsibility for whole pattern of locations - Government is preparing initial guidance to departments on location choice.
9. Tightly manage office portfolio - the Office of Government Commerce is strengthening mechanisms for coordinating the use and size of the Government’s office estate. The Government will tighten the requirement for departments to consult HM Treasury before taking on any significant new property in London.
10. Coordinate approach to relocation and redundancy - both Lyons and the efficiency programme raise questions of coordination across departmental boundaries about location choice, use of the government estate, and human resources. These issues are being addressed as part of implementation of the efficiency programme.
On the Government’s response to his recommendations, Sir Michael Lyons said:
"I am very pleased to see that the Government has responded so positively to the recommendations contained in my report on public sector relocation. I welcome the clear arrangements for taking them forward in the context of greater efficiency and of improved public service delivery. I will watch progress with particular interest."
The table below summarises by department the number of posts relocating from London and the South East by 2010 as confirmed in the 2004 Spending Review.
|Department or public body||Number of posts|
|Department for Constitutional Affairs||200|
|Department for Culture, Media and Sport||600|
|Ministry of Defence||3,900|
|Northern Ireland Office||8|
|Office of the Deputy Prime Minister||240|
|Department for Environment, Food and Rural Affairs||390|
|Department for Education and Skills||800|
|Foreign and Commonwealth Office||450|
|Department of Health||1,110|
|Department for International Development||85|
|Department of Trade and Industry||685|
|Department for Transport||60|
|Department for Work and Pensions||4,000|
|Total number of posts to be relocated||20,028|
Plans for these dispersals are summarised in the departmental chapters of the 2004 Spending Review White Paper.
Experian Business Strategies were asked to carry out research into previous public and private sector relocations and to assess the economic impact of further decentralisation from London and the South East. King Sturge, property consultants, were also commissioned to research alternative locations outside London and the South East.
The research informed the Lyons Review and is made available to assist public sector organisations which may be considering or are locating activities out of London and the South East.
Specific queries on the Experian Business Strategies research into the lessons to be learned from previous relocations and into the economic impact of further public sector decentralisation should be addressed to:
Experian Business Strategies
65 Curzon Street
London W1J 8PE
Tel: 0870 196 8250
Specific queries on the King Sturge research into alternative locations and methodology should be addressed to:
Dr Angus McIntosh
King Sturge International Property Consultants
7 Stratford Place
London W1C 1ST
Tel: 020 7529 6890
King Sturge assessed towns and cities outside London and the South East with a population of 100,000 or more in order to limit the size of sample selected for analysis. However, departments and public bodies will be expected to look at a wide range of locations including smaller towns and locations with a population of less than 100,000.
Sir Michael is grateful to those who contributed to the consultation, a full list of whom is contained in the final report. The following responses addressing some of the broader issues were received:
Printed copies of the Sir Michael Lyons’ final report to the Chancellor and Deputy Prime Minister are available from:
1 Horse Guards Road
Tel: 020 7270 4558
Enquiries about public sector relocation should be directed to:
Lyons Review Implementation Team
20-30 Great Peter Street
Key documents of the Lyons Review are listed below with the most recent shown first. Some of the documents are available below in Adobe Acrobat Portable Document Format (PDF). If you do not have Adobe Acrobat installed on your computer you can download the software free of charge from the Adobe website. For alternative ways to read PDF documents and further information on website accessibility visit the HM Treasury accessibility page.
Sir Michael Lyons is Director of the Institute of Local Government Studies and a Professor of Public Policy at the University of Birmingham. He leads the Department as part of the wider School of Public Policy on a part-time basis and has a series of other public and private responsibilities.
For further information on Sir Michael and his career, please see University of Birmingham’s website.