Ian Austin MP

Labour MP for Dudley North

  • Home /
  • News / Austin: Move government departments to the regions

Austin: Move government departments to the regions

Presenting a new Bill to the House of Commons, Dudley MP Ian Austin calls for thousands of civil service jobs to be moved to the regions.

Click the picture above to watch Ian's speech.

Mr Speaker, this Bill would ensure more balanced economic growth across the country, bring new jobs and greater prosperity to areas that have struggled to replace traditional industries they have lost, reduce pressure on the overheated London economy and save billions to help reduce the deficit.

These proposals should also be seen as a central part of the debate about devolution and improving public services because they would improve policy making and reform the way public services are delivered by getting central, regional and local government working more effectively together, bringing government closer to the people and enabling civil servants to find out what life is like for people in places like Dudley and the rest of the country.

My proposals would move the vast majority of central government civil servants, and staff from non-departmental public bodies and quangos from London, transferring 100,000 jobs from the capital to the rest of the country.

They would distribute wealth more fairly across the country and make a huge contribution to the regeneration of 50 city and town centres

They would benefit London by making more than 20 million square feet of central government real estate available for the private sector, for new business start-ups in the capital or for conversion into desperately needed homes for people in London.

And they would benefit the taxpayer by saving an initial £10 billion and ongoing annual savings of £725million.

Mr Speaker, we live in one of the most centralised countries in the world.

According to the OECD, central government controls 72 per cent of public expenditure, compared with 35 per cent in France and just 19 per cent in Germany.

Unlike most other economies, only two per cent of taxation is raised at a local level --- and Government, finance, business, broadcasting and the media, culture and the arts are all concentrated in London.

As a result, investment and growth has been concentrated in the capital and stifled elsewhere, so the economic outputs of seven out of eight of the UK’s largest cities consistently perform below the national average, whereas in Germany all eight of the largest cities outside Berlin outperformed the national average, and there’s a similar picture in Sweden, Italy and France.

The historical North-South divide has been reinforced with the dominance of finance and the weakness of manufacturing, which have benefitted the capital and hit the regions hard.

These factors have distorted government policy for decades, exacerbated the decline of the UK’s traditional industries and hampered the regions’ abilities to attract new investment and new jobs to replace them.

Since the 1940s there have been six attempts to decentralise government departments, most recently the Lyons Review in 2004 and the Smith Review in 2010. For example, hundreds of civil servants moved to Sheffield in 1979 to run the newly-created Manpower Services Commission. The MSC and the Training Agency brought many jobs to the city and David Fletcher, who led their Inward Investment team, said "The bulk of those jobs in some shape or form are still here. Some jobs do come and go but it's given us a platform to build for growth."

Elsewhere there have been successful transfers to Bootle, Bristol, the North West and the Midlands so there were some successes, but my proposal is much more radical.

The proportion of the country’s civil servants located in the capital actually increased every year between 2010 and 2015 – there are now 79k civil servants and 63k staff from NDPBs based in London. Despite deep cuts elsewhere in the country, there are now 5000 more civil servants in the capital than in 2013.

The capital’s civil service occupy almost 30 million square foot of space – equivalent to 57 London Gherkins! And the average annual cost is £867 per square metre - more than twice the national average of £406.

Worse still, newly created public bodies like the Government Digital Service, Health Education England and the Government Communications Service have all been located in London and have not been joined up with the wider public sector.

When I was a CLG minister in the last Labour government I’m sure I had meetings with less than 30 of the thousand civil servants who worked in Brassenden Place. With email and video-conferencing, the rest could have been anywhere else in Britain.

So in the civil service, let’s move all posts that don’t require regular face-to-face contact with ministers, in addition to all 24 of the newly-created non-departmental bodies, all 43 regulators, inspectorates and ombudsman and all bodies with a localism or regeneration remit like HS2, Visit Britain or the Homes and Communities Agency.

Between 7,500-10,000 civil servants would remain in London with flexible working space and meeting rooms available when needed

You could even have all ministers from different departments, their private offices and policy people in one building – imagine what that could do for cross-departmental working and getting ministers and departments collaborating more closely.

Across the country civil servants and local and regional government officers could share buildings and work together more effectively too.

Towns and cities could bid or submit proposals to host departments, share services and save money, but wouldn’t it make sense to move BIS to the Black Country, the country’s manufacturing heartland; transport to Birmingham in the centre of the country; DCMS to Manchester where you’ve got the BBC, Media City, world-beating sports teams and brilliant facilities; and DEFRA to Norwich, for example.

Imagine how much easier it would be to improve skills and boost spending on science and technology in the Midlands if you had central government civil servants, local government officers, universities and industry working closely together in the same place.

And imagine how the quality of policy-making would improve if central government civil servants were based in the regions, seeing at first hand and on a daily basis the problems they were trying to solve and working with the people their decisions would affect.

This should also be seen as part of the devolution debate taking place not just in Scotland and Wales but in the regions of England too.

Local authorities, LEPs, businesses and MPs in the West Midlands are working hard to put our Combined Authority together and negotiate a devolution deal, but think how much more powerful the regions could be if central government departments were playing their full role.

According to analysis by the New Local Government Network, the traditional ways of organising public services in rigid and independent central government departments separate from their local government counterparts is becoming less and less effective when there is less money to spend, an ageing population and more complex needs to respond to, so there is a real need to find new ways of working.

For example, the NHS faces a £30bn funding gap by 2020. Social care budgets have already been hit and face a £3bn funding gap by 2020. The centrally-managed Work Programme is failing to get sustainable jobs for nearly 70% of people who go through it but we still face serious skills shortages in specific sectors and many parts of the country.

Devolution and the introduction of pooled budgets is painfully slow, but where it has happened – like giving Greater Manchester a bigger role in the NHS - it has been based on a sophisticated understanding of local peoples’ needs and local expertise and collaboration between the NHS and central and local government to design services to meet them, which is clearly a much more intelligent way to solve problems that overlap traditional and rigid Whitehall silos like health and employment.

Devolution and decentralisation would put local people in charge, remove layers of bureaucratic rules and prescriptions so we can develop a form of government where flexibility, innovation and adaptation to people’s needs become the norm not the exception.

Finally, this would also help address the huge problem of disengagement and distrust of London and Westminster institutions

It makes a massive difference when people can see decisions being made locally to meet their needs, cutting through the cynicism that many people feel about politics.

My experience as minister for the West Midlands taught me that when you listen to local people, when funds are devolved and central government, local authorities, business and universities work together and are empowered to implement the answers, decisions are taken more quickly and the solutions are more effective.

Look at Birmingham’s brilliant new train station complex – one of the biggest city centre redevelopment programmes in the country.

Look at the runway extension built at Birmingham airport, a complex and difficult project to design and engineer and fund, but which we put together much more quickly than airport development projects elsewhere.

The new Jaguar Land Rover plant at i54 has brought well-paid and highly-skilled jobs to the Black Country and the redevelopment of Fort Dunlop was the largest regeneration project in Europe.

All of these were huge complex projects to improve the region’s economy that would never have got off the drawing board and for which finance would never have been found without government departments letting local authorities, the private sector and others in the West Midlands exercise their leadership and use their expertise to transform the region.

Those projects show what we’re capable of in the West Midlands

Imagine what more we could do to transform the regions of England if central government departments were decentralised and their functions devolved.

So Mr Speaker, let’s transform the way government works to transform the country, so that as we emerge from the recession and as our economy grows again, we won’t make the mistakes of the past: We won’t leave any community behind - we’ll build a stronger economy right across the country, with better skills, new industries and new jobs, and open up opportunities for people in all parts of Britain.

The Labour Party will place cookies on your computer to help us make this website better.

Please read this to review the updates about which cookies we use and what information we collect on our site.

To find out more about these cookies, see our privacy notice. Use of this site confirms your acceptance of these cookies.