Headlines: June 20th, 2003

Chancellor Gordon Brown’ s announcement in the Budget that some public service activities and staff would be moved from London and the South East to the regions and nations of the UK has been put into effect with the launch of the study phase. Sir Michael Lyons, Director of the Institute of Local Government Studies and Professor of Public Policy at the University of Birmingham, has started work on the independent review into the scope for re-location. His remit is to look at ways of modernising Government and improving delivery of public services while, at the same time, securing good value for money and quality outcomes for the taxpayer.Sir Michael wants to hear the views of interested parties on the advantages and disadvantages of decentralisation and of re-location of public sector jobs. Past re-locations led to over 10,000 jobs being transferred out of London and he wants to learn lessons from those exercises. Many businesses have been particularly successful in re-locating out of high cost of living areas, particularly by taking advantage of advances in modern technology and electronic communications to allow people to be based away from the operational centre. He wants the views of businesses that have been involved in re-location. He would also like to hear about the strengths of locations outside London and the South East. Contributions should be sent to lyons.consultation@hm-treasury.gov.uk

It is estimated that it might be possible to re-locate some 20,000 jobs.

Moving activities away from high cost areas is part of the two pronged approach by the Chancellor to reduce the cost of public services. The other measure, also announced in the Budget, is to make public service pay more responsive to the regional labour market. This will be done by requiring Pay Review bodies to take account of regional and local factors. In many areas of the country private sector pay levels, unlike the public sector counterparts, are substantially below those of the South East. Some 40% of the public sector are covered by Pay Review bodies. This move is likely to create a regional pay system which the public service unions strongly oppose.