Diana Johnson: Move London jobs to North– and Hull – in a shift of power

Whitehall departments, non-departmental public bodies and quangos would move to “public service hubs” around the country and share space with other public sector bodies. 

Only the small number of civil servants who need regular face-to-face contact with Ministers would stay in the capital, in more cost-efficient shared offices.

Not only would shifting these jobs out of London help regeneration in parts of the country that need it most, but taxpayers would save £10bn from leaving expensive London office space and benefit thereafter from the cheaper property and staffing costs outside London.

Currently civil servants occupy almost 30 million square feet of office space in and around London – equivalent to 57 London Gherkins – at an average annual cost per square foot that is more than twice the national average. Redistributing civil service jobs would free up 20 million square feet of central Government real estate for business start-ups or for conversion into desperately needed social and affordable housing.

Above all, this measure would promote more balanced economic growth across the country – relieving pressure on the congested London economy.

Alongside economic benefits, it would bring decisions closer to local people, with greater ability for regional, local and central government to work together more effectively. Civil servants would find out what life is like in places like Hull or Doncaster.

The plan poses a key test of how serious the Government is about devolving power to regions and transforming the way the British state operates. This is a test of whether talk about a “Northern Powerhouse” is serious, and whether rhetoric about “rebalancing the economy” is matched by deeds. In the digital age there is less excuse to concentrate so much of the government machine in one city.

At the moment, Ministers are suspiciously quiet on devolving jobs. Hull has even been losing existing locally-based central Government jobs in the Insolvency Service and HMRC.

The UK is one of the world’s most centralised countries, with central Government undertaking 72 per cent of public expenditure. This compares to 35 per cent in France and just 19 per cent in Germany. Unlike most other economies, only two per cent of UK taxation is raised locally.

Key institutions of the state, finance, business, broadcasting, media, culture and the arts are all concentrated in London. Given this imbalance, it’s no wonder that London is first in the queue for investment in so many areas from transport infrastructure to arts funding.

However all eight of Germany’s largest cities outside Berlin outperform their national average. It’s a similar picture in Sweden, Italy and France. In contrast, the economic outputs of seven out of eight of the UK’s largest cities consistently perform below the national average.

The historical North-South divide is reinforced by the increasing dominance of financial services and the weakness of manufacturing.

Six attempts since the 1940s to decentralise Whitehall departments have come and gone. For example, hundreds of civil servants moved to Sheffield in 1979 to run the newly- created Manpower Services Commission. More recently we saw the Lyons Review in 2004 and the Smith Review in 2010, but the logjam on the UK’s over-centralisation was never broken. Indeed, the proportion of civil servants located in London increased every year between 2010 and 2015.

There are now 79,000 civil servants and 63,000 staff of non-departmental public bodies based in the capital. Despite austerity, focused most severely on areas like Hull, there are now 5,000 more civil servants in London than there were in 2013.

We also need fairer funding, so that power is devolved – not just blame. This means devolved power to raise revenue and capital finance.

We need more flexibility around structures. Genuine devolution wouldn’t be imposed top-down from the centre, ignoring local factors and geography. What may work within Greater Manchester’s clear boundaries may not work everywhere else.

Real devolution wouldn’t insist on elected mayors, on a “one size fits all, take it or leave it” basis, as a condition for devolving powers.

Instead of consulting communities we’re seeing secretive back room deals, as Yorkshire’s civic and business leaders jump through hoops to satisfy arbitrary deadlines.

Shouldn’t the point of devolution be to make locally-elected leaders accountable to local voters for decisions made locally? Devolving jobs is an important first step, but it is only one aspect of a credible package of real devolution for Yorkshire and the Humber.

Diana Johnson is the Labour MP for Hull North.