§ Motion made, and Question proposed, That this House do now adjourn.—[Mr. Peter Lloyd.]
10.39 pm§ Mr. James Cran (Beverley)I am pleased to have the opportunity of a short debate on the relocation of Government Departments and the dispersal of civil servants, not simply because I think that it is an important policy objective but because the Government share that view.
In 1979 the Government made a commitment to relocate civil servants and Government Departments. They said that they would relocate 5,900 posts. I cannot criticise the Government in that regard because to date they are on course to meet that target. As I understand it, 5,500 posts have already been dispersed and the remainder of the process is in train.
In addition, 6,000 posts have been dispersed on Departments' own initiative. It would be interesting to know how they exercise their initiative in this regard. That means that over the past nine years about 11,500—shortly to be 11,900—posts have been dispersed, out of a Civil Service consisting of more than 500,000 individuals. My question is whether the progress to date is satisfactory. I say that because, even though the target will have been achieved, it was an exceedingly modest one in the first place. Given that it was a modest target, perhaps it could have been achieved more quickly.
It is said—especially by civil servants—that four fifths of the Civil Service is located outside Greater London. I have checked the facts, and that is absolutely true. However, as with all statistics, one needs to look behind the figures to find out exactly what they mean. While those statistics are factually correct, an analysis of the number of staff by economic planning region gives a wholly different picture. I considered non-industrial Civil Service staff in England, although I readily agree that I could have chosen the whole of the United Kingdom.
I found that the south-east has the considerable total of 46.6 per cent. Dear old Yorkshire and Humberside—the House will understand why I call it that—has 7.2 per cent.; the west midlands has 7.1 per cent.; the north 7.4 per cent.; the east midlands 4.8 per cent., the north-west 12 south-west 11.3 per cent., while East Anglia comes up tail-end Charlie with about 3.2 per cent.
§ Mr. Timothy Devlin (Stockton, South)I am sorry to interrupt my hon. Friend in mid-flow. Is he not appalled that out of about 600,000 civil servants in the United Kingdom, only 33,600 are in the northern region? Does that not show a signal failure on the Government's part to sell the northern region, with all its strengths, to civil servants, who should be moving north and making a valuable contribution to the local economy?
§ Mr. CranMy hon. Friend makes his own point in his usual eloquent fashion, although he perhaps uses rather more extravagant language than I would use. I heard what he said, and there is no doubt that others did.
Let us move on to consider industrial civil servants, again in England. I shall not go through the figures, but essentially they are no different from those for non-industrial civil servants. When one puts the two 125 together, one finds that the south-east of England is way ahead in its ability to attract and keep civil servants at the total of 46 per cent.
I have not mentioned Scotland, Wales and Northern Ireland because in a sense those three countries prove the point. They have their own Departments of State, and Scotland has almost 10 per cent. of the total number of civil servants in the United Kingdom. What is good for Scotland, Wales and Northern Ireland might be good for some of the other regions apart from the south-east. The gist of my remarks, therefore, is that the south-east is doing well and the other regions are doing extremely badly.
I am not one of that band of people who believe that we should disperse civil servants for the sake of doing so. If it is not cost-effective and does not increase or maintain efficiency, we should not do it, but there is no iron rule to suggest that if greater numbers of civil servants were distributed throughout the other regions either of those criteria could not be met. Indeed, cost-effectiveness can be measured. Inner London weighting cost the taxpayer the fairly substantial—some would say staggering—total of £675.5 million in the five years from 1983–84 to 1987–88. If I am correct in assuming that in the Government's view more civil servants could be dispersed, a considerable proportion of that sum could have been saved.
In saying that, I pay tribute to the fact that this Government of all Governments have been extremely careful in their management of public expenditure. I believe that the same could be equally true in this area. In addition to inner London weighting, there are intermediate and outer London zone costs, London pay additions, inner London secretarial allowances and London allowances for lawyers, accountants and those whom we have all learnt to love—tax inspectors. In other words, a myriad costs of this kind have grown up in an extremely tight labour market. That is another reason why relocation policy should perhaps be more aggressively considered.
There are other reasons. For some reason that is not entirely clear to me, it seems that in London civil servants work 41 hours per week whereas outside London they work 42 hours. Clearly, if more of them were outside London they would produce an extra hour's work each, which would again save taxpayers' money.
Resignation rates are an important consideration for any employer, and in this context the Government are the employer. For reasons that we all understand, resignation rates are far higher in the south-east than in any other region. That, again, entails additional and, in my view, needless costs to the taxpayer.
In addition to the manpower costs, there are office costs. It costs not far short of £300 million per annum in rent, rates and maintenance for all our buildings in Greater London. The Treasury guide to office rental values which has been laid in the Library shows that considerable savings could be made if offices were opened in other regions. To give the House the flavour of the situation, new office accommodation per square foot costs between £25 and £57 in City—my right hon. Friend the Minister will no doubt say that we do not have many offices there, and I take the point—£18.50 to £40 in the west end, in the London suburbs £7.50 to £17, in dear old Yorkshire and Humberside £4.75 to £7 and in the west midlands £3 to 126 £8.50. It does not take a chartered accountant to work out the savings that could be made if we had a more aggressive policy.
That is the cost-effectiveness argument. What about the efficiency argument? Nothing in the Treasury guidelines suggests any major efficiency obstacles; quite the contrary. The hoary old arguments that we have all heard about bad communications between London and offices relocated to Hull, Humberside or Stockton are nonsense. The Government's communications network covers the entire nation and can be adapted in almost any way to meet new technology. The developments in information technology, including visual and document transmission, render the arguments about bad communications completely out of date.
If I had longer, I could outline many other reasons why I believe that we should be more aggressive, but I shall canter quickly over three of them. The first is the contribution to regional economies. That significant reason has been accepted by the Government in the Treasury guidelines. An example is the move of the Manpower Services Commission to Sheffield. There is no evidence to show that that move was not extremely good, and there is plenty of evidence to show how it has affected the local economy.
Secondly, the regions have a stake in the government of the United Kingdom. We must dispel the notion that London-based means London-biased, although we understand why it has occurred. The civil servants who are out in the regions tend not to be the policy-makers. Far from it. They tend to be mainly functional. The further away civil servants are from the south-east, not only are there fewer of them but they are less senior. As one who has spoken to and worked with more regional directors of more Departments than anyone, I can honestly say that most of them believe that being sent to a region is like being sent to Siberia. They always keep their houses in the south of England because they know that they will move back. The simple reason is that most of the Civil Service is here.
The third point is the benefit to civil servants. This is an extremely difficult problem for the Government, but they are no different from other employers who must communicate with their work force. I hope that the Government will communicate aggressively with civil servants to show the advantage of relocation. My right hon. Friend the Minister is my Member of Parliament. When I was elected to the House, I had to buy a flat in Westminster, which cost twice as much as a four-bedroomed house in Yorkshire and Humberside. What a compelling reason for a civil servant to want to be relocated. But the facts must be presented to him.
To give my right hon. Friend the opportunity to reply, I end by saying that I have some anxiety about our relocation policy and the modest achievements that we have had to date. I do not say that we made a promise and did not keep it, because we indubitably did. But the targets were too modest, and there was a propensity to relocate out of Greater London simply to overspill into the south-east and the regions adjacent to it. I am worried that no more central targets will be set. From the experience of all the jobs that I did before 1 came to the House, I know that unless targets are set from on high, it is easy to find reasons not to do what is required. I am worried about that, and, therefore, the passive nature of the policy requires further consideration.
127 I am assuaged in going a little further only by the fact that there will be annual surveys of progress by Government Departments—perhaps my right hon. Friend will tell us when those are due—and that annual efficiency gains will be sought from Government Departments. Perhaps that will act as a spur to relocation.
We need greater progress. If the subject were debated on another occasion, hon. Members would agree that we should not return in another nine or 10 years to find that all we had done was to relocate 5,900 civil servants, plus the other 6,000. The other regions of the United Kingdom simply will not understand such lack of progress.
§ The Paymaster General (Mr. Peter Brooke)I congratulate my hon. Friend the Member for Beverley (Mr. Cran) on his success in the ballot and on his choice of subject for our short debate.
If I had not known before of my hon. Friend's considerable interest in matters of Civil Service location generally and, of course, of his constituency and regional interest in these issues, the large number of pointed parliamentary questions that he has asked me and others over recent months would have left me in no doubt of it.
My hon. Friend's choice of subject gives me a timely opportunity to elaborate a little on the Government's policy on the location of Government work, to provide some further background on the new phase of that policy that I announced to the House in March, and to assure my hon. Friend of the Government's continuing commitment to relocation, wherever that is efficient and cost-effective.
As my hon. Friend has rightly said, in 1979, we announced a programme for dispersing 5,900 Civil Service jobs out of London. As he acknowledges, that programme has been a success and is all but complete. Some 5,560 jobs have already been relocated as a consequence. The locations to which they have gone are widespread and include Sheffield, Glasgow, East Kilbride, Southend, Salisbury and Norwich. Planning is in hand for the small balance of 340 jobs remaining for dispersal under the 1979 programme.
Over and above that centrally run dispersal programme, individual Departments have, at their own initiative, relocated a considerable number of jobs, or created new ones, out of London and the south-east. In all, those amount to well over 6,000. They include, for example, a new office with 150 posts created by Her Majesty's Land Registry in Hull, and increases in the number of Department of Health and Social Security jobs in North Fylde, Lytham St. Annes and Preston of almost 1,200. My hon. Friend and the House will also be aware of the recent decision to relocate the Patent Office to Newport, which should create at least 500 new jobs locally.
In all, therefore, since 1979, some 12,000 Civil Service jobs have been located or created outside London and the south-east, about half through the centrally managed dispersal programme and half at the intitiative of individual Departments.
That has contributed significantly to a substantial spread of Civil Service work and job opportunities throughout Britain, particularly when it is remembered that during this period the Civil Service has fallen significantly in size. The present picture is that about four 128 fifths of all civil servants already work outside greater London and more than three fifths work outside London and the south-east. My hon. Friend will be more aware than most that the Yorkshire and Humberside region was a major beneficiary of the Government's dispersal programme. The move of 1,760 Manpower Services Commission jobs from London to Sheffield accounts for almost one third of the total number of posts so far dispersed under this programme.
The figures that I have just quoted are good, but before I come to our plans for the future I should like to say a word about the interesting figures that my hon. Friend gave for civil servants in the English regions. I am not sure that I could endorse the details he gave, but the overall picture he paints is, within its limits, a fair one. The south-east has a larger proportion of civil servants—industrial and non-industrial—than any other English region, or than Scotland, Wales or Northern Ireland. It also has a significantly larger population than any other region, and if one looks at the number of civil servants per thousand of population the picture is rather different. The northern region, to which my hon. Friend the Member for Stockton, South (Mr. Devlin) referred, has almost as many—and the south-west region has more—civil servants per head of population as London and the south-east, despite the fact that the south-east region includes the national capital and seat of Government.
If my hon. Friend the Member for Beverley was seeking to create the impression that no other English region has the same or a higher proportion of civil servants as Scotland, Wales or Northern Ireland, I hope that he will allow me to correct him. At 1 April last year, the north-west region of England had 10 per cent. and the south-west region over 9 per cent. of the total non-industrial Civil Service—that is, civil servants in the United Kingdom as a whole—compared to just under 10 per cent. in Scotland, about 5 per cent. in Wales and just over 0.5per cent. in Northern Ireland.
I assure my hon. Friend that the Government do not intend to rest on the progress already made. When, on 31 March, I informed the House in a written answer of the successful completion or near completion of the 1979 dispersal programme, I announced also a new phase in Government policy on the location of their work. I explained that, though no further central targets for relocation would be set, Departments would be reviewing the location of their work with a view, in suitable cases, to finding locations offering advantages in terms of recruitment and retention of staff, value for money and other considerations relevant to service delivery and management.
After careful thought, we decided that it would not now be sensible to have a new version of the dispersal programme of 1979, which was centrally managed and had overall statistical targets, but that we would instead exploit the tide of individual departmental initiative for relocation that has been running strongly in the past few years and has, as I said, led to the actual or planned relocation of as many jobs as the formal dispersal programme itself.
There are a number of reasons for this. First, it is consistent with the general trend in Civil Service management, which is to avoid central direction where possible and place the power to make decisions and the responsibility for making them with individual Departments acting within a clear framework of policy and with clearly defined incentives to take sensible 129 decisions. It seems to us that decisions taken in this way are likely to be better decisions than those taken in conformity with some massive central blueprint or master plan which would, very likely, be the product of a vast interdepartmental committee—probably meeting, incidentally, in the SW1 postal district.
Secondly, it is consistent with the general change that has been taking place in the economy and in decision-making processes. Property is cheaper and staff are easier to find, outside the south-east. Sensible businesses are increasingly exploiting these advantages, and we want to build on the wish of individual Government Departments to do the same.
My hon. Friend has some doubts that Departments will respond without central direction. But they have already shown that they are keen to do so. It is of the essence that I cannot forecast now exactly how many jobs will be relocated as a consequence of this new phase of our policy, but I am sure that all Departments will look seriously and sensibly at the options, and that if the trend of the past few years is any guide, a substantial number of jobs will be relocated, to the benefit of the efficiency of the Departments concerned, of their costs and the value for money that they give, and of the economic conditions in the receiving localities. I know that my ministerial colleagues are committed to this programme.
My hon. Friend refers to the guidelines for Departments on the location of work. These guidelines emphasise the importance of thorough reviews based on the principles that I have mentioned. They also require Departments to give adequate weight to Government policy for the regeneration of regions and inner cities and provide in a good deal of detail examples of the kind of cost and labour supply advantages that relocation can bring. I might add that they also offer the prospect, in suitable cases, of some short-term help from the Treasury with the transitional costs of relocation. Those costs can be significant, and we are anxious that they should not be a disincentive to achieving the longer-term benefits.
The new guidance takes account of the regional policy dimension in terms agreed with the regional and territorial Departments. It requires that
For all major possible relocations, i.e. those involving more than 100 people, the department should consider any site or sites suggested by the territorial or regional policy departments within assisted or urban programme areas and include at least the most favourable of these in their list of costed options, even if this does not provide the greatest overall saving the move must, however, generate a positive Net Present Value".The new guidelines have been firmly linked to running costs and to the public expenditure survey; first, because we considered that the policy might work better if the Treasury agreed to consider requests for help with transitional costs by additions to running costs limits; secondly because some expenditure benefits might be expected to be achieved if relocation were chosen; and, thirdly, because the Treasury would need to "keep the score" of the overall plans and achievements of Departments as the new policy progressed. In addition, Treasury expenditure divisions will ensure, within the context of the annual expenditure survey arrangements, that Departments produce worthwhile and relevant proposals on relocation in accordance with the guidelines.130 It is clear that there are benefits in the longer term from sensible decisions on location and relocation. We have not done, retrospectively, a full cost-benefit analysis of the dispersal programme undertaken in 1979, but there is evidence that sensible decisions can lead to considerable savings. For example, a recent report submitted to my right hon. and learned Friend the Secretary of State for Scotland evaluates very positively the results of dispersing part of the Overseas Development Administration from central London to East Kilbride in 1981. I understand that my right hon. and learned Friend intends to publish the report in the near future. I am sure that my hon. Friend will read it with interest and encouragement, and I have already made arrangements to circulate it to Government Departments generally as an example of the benefits that can be achieved.
As I am sure that the House will recognise, relocation is not the answer to every Civil Service problem; nor should it be seen as an automatic device for spreading employment opportunities. Some Civil Service work will have to remain in London arid the south-east. People who live in these areas need local services just as much as people living elsewhere—jobcentre clients, for example. Although modern communications, technology and good transport links now mean that much work can be done elsewhere, some Civil Service work will always have to be done in close proximity to Parliament, Ministers and the City.
My hon. Friend mentioned the attitude of the Civil Service unions. It is of course important, in introducing policies of this kind, to consider the position of the staff who will be subject to the new arrangements. We have given an assurance to the Civil Service unions that, when jobs are relocated, every effort will be made to avoid the compulsory transfer of people in mobile grades and to find alternative jobs within reasonable travel distance for non-mobile grades. We have also confirmed, in the guidelines, the existing requirement on Departments to consult their own trade union sides when planning relocations; and, while there are issues which I have no doubt that the unions will wish to discuss further with the Treasury, I see no ground for pessimism.
In sum, I am sure that this new phase of location policy will yield considerable benefits—to Departments, to the public that they serve, to the Exchequer and to the localities which receive new Civil Service jobs. I will at the earliest suitable opportunity—probably some time next year—give the House some account of the progress made and planned. I am sure that my hon. Friend, with his enthusiasm for the subject, will not be alone among hon. Members in following this progress with keen interest. He has done a service to that cause and process by his detailed and eloquent treatment of the matter tonight.
To conclude on a personal note, as the local Member of Parliament for SW1 and adjacent places, I should say that 3 per cent. of the working population of the entire country comes to work in my constituency daily, leaving the rest of the House to look after the remaining 97 per cent. I am not jealous and I should be happy to see many of those people going to work elsewhere to the good of the rest of the economy.
§ Question put and agreed to.
§ Adjourned accordingly at nine minutes past Eleven o'clock.