The Chamberlain News

Move 25,000 civil servants from London to ‘turbo charge’ city region devolution

Moving 25,000 civil servants out of London to new offices in English city regions including Greater Birmingham will “turbo charge” devolution by bringing decision-makers closer to the people, a think tank report has claimed.

Policy Exchange argues that well-meaning attempts by Governments to devolve powers and budgets “have not gone anywhere near far enough” and challenges Prime Minister Theresa May to use opportunities afforded by Brexit to deliver serious reform to public services.

The paper says there is an inherent tension between Westminster’s desire to get something done and the lack of simple, one-size fits all solutions to issues such as unemployment, housing, increasing wages and addressing mental and physical health issues.

Redistributing the civil service throughout the country will boost devolution, bring decision-makers closer to the people and provide local communities with the additional capability they need to manage their new financial and administrative powers, according to the paper.

Proposals to relocate the civil service away from London are hardly new.

In 2004, the former chief executive of Birmingham city council, Sir Michael Lyons, was commissioned by the Government to examine how this might be done and the advantages a shift would bring. Sir Michael concluded there should be “significant dispersal” of civil servants away from London and the south-east and added that the move would help to regenerate city region economies.

Twelve years on, and the re-location of the civil service has never really taken off with the machinery of Government remaining firmly in central London.

Promises to speed up relocation were made in the 2016 Budget. Under plans outlined by Ministers, the number of buildings occupied by Government departments is set to fall sharply, from 800 to under 200 by 2023.

Departments will increasingly be expected to share office space under a plan for so-called “Government Hubs”, which the Cabinet Office has said will enable “easier cross-departmental collaboration as well as having important benefits for recruitment and retention”.

The Policy Exchange report says that the Government will only ever achieve effective reforms to the public sector if it similarly encourages change to develop locally and from the bottom-up. A key element of achieving this new approach is to ensure that every part of the country has talented civil servants who can innovate and drive efficiency improvements.

The report sets out a number of other ideas to deliver a more productive state including:

• Separating the Treasury’s budgeting function from its economic and financial responsibilities, ending the current system of top-down and short-term budgeting, as well as introducing new budget flexibilities that allow local places to experiment with ‘invest to save’ financing models.
• Public sector organisations such as schools and prisons should be able to set their own budgets, opt-out of national guidelines or contracts and set their own delivery models
• Local areas should be given full autonomy over public sector pay so they can alter national terms and conditions.
• The Government should pave the way for a Public Sector Innovation Bill that creates a new legal basis for experimentation in policy to minimise the number of delays and failures in Government projects.

The report warns:

Our current system of Government has reached the point of diminishing returns. Compared to the pace of change in business, technology and community life, Government appears dysfunctional and slow.

Standard policy making will simply not deliver the required level of performance improvements without much wider changes to the system. In short, we need to adopt a radically different mind-set when instigating change and use a different set of management tools when implementing new reforms.

Leaving the European Union will clearly have far reaching consequences for many areas of Government policy. Outside of EU regulations, there may be advantageous alternatives to pursue, particularly around public sector procurement.

But if the new Government is not to be defined exclusively by the process of withdrawing from the EU then serious domestic reform, including change in our public services, needs to be at the forefront of their agenda. This new political landscape is a once in a generation period in Britain’s history to go further and faster than ever before with domestic reform.

The report quotes the economist Frederick Hayek who observed that centralised planning has severe limitations because the knowledge of people, local conditions, and special circumstances can be more socially useful than the theoretical or technical knowledge of a central planner.