Government Departments (Decentralisation Target)

Lord Austin of Dudley Excerpts

Tuesday 10th November 2015 Commons Chamber

[Ian Austin (Dudley North) (Lab)]

I beg to move,

That leave be given to bring in a Bill to establish a target for the relocation of central Government functions, offices and staff from London to other parts of the United Kingdom; to make provision for implementation, monitoring and performance reporting against such a target; and for connected purposes.

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 of pounds 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 in which public services are delivered by getting regional, local and central 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 Dudley and the rest of the country.

My proposals would move the vast majority of central Government civil servants and staff of 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 to desperately needed homes for people in London. They would also benefit the taxpayer by saving an initial £10 billion and ongoing annual savings of £725 million.

We live in one of the most centralised countries in the world. According to the OECD, central Government control 72% of public expenditure here, compared with 35% in France and just 19% in Germany. Unlike in most other economies, only 2% of our taxation is raised at a local level. Government, finance, business, broadcasting, the media, culture and the arts are all concentrated here in London. As a result, investment and growth have been concentrated in the capital and stifled elsewhere. 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 outperform the national average. There is a similar picture in Sweden, Italy and France.

The historical north-south divide has been reinforced by the dominance of finance and the weakness of manufacturing, which has benefited the capital and hit the regions hard. Those 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. Hundreds of civil servants moved to Sheffield in 1979 to run the newly created Manpower Services Commission. The MSC, and then the Training Agency, brought many jobs to the city; David Fletcher, who led its inward investment team, said:

“The bulk of those jobs in some way 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 were 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 79,000 civil servants and 63,000 staff of non-departmental public bodies based in London. Despite deep cuts elsewhere in the country, there are now 5,000 more civil servants in the capital than there were in 2013.

The capital’s civil service occupies almost 30 million square feet of space, which is equivalent to 57 London Gherkins. The average annual cost is £867 per square metre, which is more than twice the national average of £406. Worse still, newly created public bodies, such as the Government Digital Service, Health Education England and the Government Communication Service, have all been located in London and have not been joined up with the wider public sector.

When I was a Communities and Local Government Minister in the previous Labour Government, I am sure I had meetings with fewer than 30 of the 1,000 or so civil servants who worked at Bressenden Place. With email and videoconferencing, the rest could have been based anywhere else in Britain. Let us move all civil service posts that do not require regular face-to-face contact with Ministers, as well as all 24 of the newly created non-departmental bodies, all 43 regulators, inspectorates and ombudsmen, and all bodies with a localism or regeneration remit, such as HS2, Visit Britain or the Homes and Communities Agency. Between 7,500 and 10,000 civil servants would remain in London, with flexible working space and meeting rooms available when needed. It would even be possible for all Ministers from different Departments, their private offices and policy people to be 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 should share buildings and work together more effectively. Towns and cities could bid or submit proposals to host Departments, share services and save money. Would it not make sense to move the Department for Business, Innovation and Skills to the black country, this county’s manufacturing heartland; transport to Birmingham in the centre of the country; the Department for Culture, Media and Sport to Manchester, which has the BBC, MediaCityUK, world-beating sports teams and brilliant facilities; and the Department for Environment, Food and Rural Affairs to Norwich?

[Caroline Flint (Don Valley) (Lab)]

Don’t forget Doncaster!

[Ian Austin]

Without forgetting, of course, Doncaster, Grimsby, Barrow, Hull and Chesterfield. Imagine how much easier it would be to improve skills and boost spending on science and technology in the midlands if central Government civil servants, local government officers, universities and industry were working closely together in the same place. Imagine how the quality of policy making would improve if central Government civil servants were based in the regions, seeing daily at first hand the problems they were trying to solve. That should also be seen as part of the devolution debate, which is taking place not just in Scotland and Wales, but in the regions of England. Local authorities, local enterprise partnerships, businesses and MPs in the west midlands are working hard to put together our combined authority bid to negotiate a devolution deal, but imagine 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 way of organising public services in rigid and independent central Government Departments, separate from their local government counterparts, is becoming less effective now that there is less money to spend, an ageing population and more complex needs to respond to, so we need to find new ways of working. For example, the national health service faces a £30 billion funding gap by 2020. Social care budgets have already been hit, and they face a £3 billion 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.

The answer is to empower local people, based on a sophisticated understanding of the local community’s needs, local expertise, and collaboration between central and local government departments and the health service on meeting those needs. That is clearly a much more intelligent way to solve problems that overlap traditional and rigid Whitehall silos such as health and employment. Devolution and decentralisation would put local people in charge and remove layers of bureaucratic rules and prescriptions, so that we can develop a form of government in which flexibility, innovation and adaptation to people’s needs become the norm, not the exception.

Finally, that would also help address the huge problem of disengagement with and distrust of London and Westminster institutions. It makes a massive difference when people can see decisions being made locally to meet their needs; it cuts through the cynicism that many people feel towards politics. My experience as Minister with responsibility for the west midlands taught me that when we listen to local people, when funds are devolved, and when 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.

Birmingham’s brilliant new train station complex is one of the biggest city centre redevelopment programmes in the country. The runway extension in the midlands got built much more quickly than airport development projects elsewhere in the country. We also have the new Jaguar Land Rover plant. All those huge redevelopment and regeneration projects would never have got off the drawing board 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 the regions are capable of doing. Imagine what more they could do to transform the country, if central Government Departments were decentralised and their functions devolved.

Let us transform the way government works, and thereby transform the country, so that as we emerge from the recession and as our economy grows again, we do not make the mistakes of the past or leave any community behind. Let us 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.

Question put and agreed to.

Ordered,

That Ian Austin, Alison McGovern, Mr Nicholas Brown, Mr Adrian Bailey, Andrew Gwynne, Caroline Flint, Chris Evans, Mr Iain Wright, Diana Johnson, John Mann, Liam Byrne and Helen Jones present the Bill.

Ian Austin accordingly presented the Bill.

Bill read the First time; to be read a Second time on Friday 22 January, and to be printed (Bill 94).