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Table 2: Main Recommendations of the Lyons Review

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문장이 매끄럽지 못한 점 양해 부탁드립니다.

세미나 종료 후 완성도를 높힌 최종결과집을 출간할 예정입니다.

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♣ 국제세미나

▪일 시 : 2007. 7. 18(수) 14:00~18:30

▪장 소 : 조선호텔(소공동) 1층 그랜드볼룸 13:30-14:00 등 록

14:00-14:20 개회식

∙개회사(최병선 국토연구원장)

∙축 사(이용섭 건설교통부 장관)

∙격려사(성경륭 국가균형발전위원회 위원장)

14:20-15:40 제1분과 선진외국의 공공기관 지방이전 경험과 교훈 : 영국, 프랑스, 한국 사례 1. 영국의 공공기관 이전의 사회·경제적 효과

발표자: Neill Marshall(영국 뉴캐슬대학 인문사회대 교수) 2. 프랑스의 공공기관 지방이전 추진경험

발표자: Guy Baudelle(프랑스 렌대학 도시계획학과 교수) 3. 한국의 공공기관 지방이전 추진계획과 국제비교 발표자: 김태환(국토연구원 연구위원)

15:40-16:00 휴 식

16:00-17:00 제2분과 공공기관 이전과 산·학·연 혁신클러스터 구축 : 스웨덴, 일본 사례 1. 혁신클러스터 구축과 공공기관의 역할 : 스웨덴 메르데비 사이언스파크 사례 발표자: Sten Gunnar Johansson(스웨덴 메르데비 사이언스파크 CEO)

2. 산·학·연 혁신클러스터 구축과 도시발전 : 일본의 츠쿠바 연구학원도시 사례 발표자: Mayumi Edagawa(일본 국토교통성 츠쿠바시 정책조정관)

17:00-17:30 종 합 토 론

사회자 : 이태일(한국토지공사, 국토·도시연구원장)

토론자 : Neill Marshall(영국 뉴캐슬대학교 인문사회대 교수) Guy Baudelle(프랑스 렌대학 도시계획학과 교수)

토론자 : Sten Gunnar Johansson(스웨덴 메르데비 사이언스파크 CEO) 토론자 : Takehiko Suzuki(일본 국토교통성 대도시권정비 담당관) 김성제(건설교통부 공공기관지방이전추진단 지원정책팀장) 박헌주(대한주택공사 주택·도시연구원장)

이병렬(광주광역시 공동혁신도시 걸설지원단장) 진영환(국토연구원 도시혁신지원센터 소장) 허문구(산업연구원 연구위원)

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영국의 공공기관 이전의 사회·경제적 효과 ...1

프랑스의 공공기관 지방이전 추진경험...67

한국의 공공기관 지방이전 추진계획과 국제비교...129

혁신클러스터 구축과 공공기관의 역할: 스웨덴 메르데비 사이언스파크 사례...159

산·학·연 혁신클러스터 구축과 도시발전: 일본의 츠쿠바 연구학원도시 사례...199

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Public Sector Relocation Policies in the UK

Neill Marshall 뉴캐슬대학 인문사회대 교수

발표자 소개

Neill Marshall 교수는 Centre for Urban and Regional Development Studies(CURDS)의 공동 설립자이며, CURDS의 중심 역할을 맡고 있다.

특히 그는 공공기관 또는 섹터의 이전과 지역개발에 관한 많은 연구를 진행한다. Marshall 교수가 이끄는 CURDS는 영국의 공공기관 이전 보고서인

"Lyons Review of Public Sector Relocation"에 영국 9개 지역조사를 제출하였고 일본의 Japanese Land Agency에도 공공기관 이전에 대한 자문을 실행한 경험이 있다.

주요저서

Public sector relocation policies in Britain and Ireland, European Planning Journal, 15, 645-666, 2007.

Relocation, relocation, relocation: Assessing the case for public sector relocation, Regional Studies, 39, 769-789, 2005

Public sector relocation and regional disparities in Britain, Environment and Planning C, 23, 883-906, 2005.

Public Sector relocation from London and the South East, Evidence presented to the Lyons Review on behalf of the English Regional Development Agencies, http://www.hm-treasury.gov.uk/ 2003.

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ABSTRACT

Public sector relocation from capital cities primarily to reduce the costs of government and ameliorate regional disparities has been a high profile but little researched government policy. The paper outlines the reasons for the growth of interest in public sector relocation in Europe, and then compares UK relocation policies. The paper indicates that in the UK there is a growing interest in relocation as a means of reinforcing public sector reform.

While there is a good case for public sector relocation, there is less agreement on the precise means whereby dispersal should be achieved. The paper highlights successful aspects of public sector relocation policies and indicates areas for further research.

Successful public sector dispersal depends on a willingness on the part of government to take a long-term view, and historical evidence suggests that in the UK it is difficult to move senior posts from the capital.

Public sector relocation capital cities regional development

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Public Sector Relocation Policies in the United Kingdom

In the last five years, public sector relocation from capital cities primarily to reduce costs and ameliorate regional disparities has been a high profile and frequently contentious policy in a number of European countries. The paper briefly outlines the reasons for the growth of interest in public sector relocation in Europe, and then examines UK relocation policies in detail. The paper reviews existing research on the impact of public sector relocation on origin and destination areas and the impact of dispersal on the operation of the public sector itself. Research on the costs and benefits of dispersal suggests there is a good case for public sector relocation. However, there is less research on the impact of relocation on the public sector itself or agreement on the precise means whereby relocation should be achieved; in public sector relocation the devil is very much in the detail. Though there is evidence of policy learning with fast policy transfer between countries (Burnside, 2004), evidence on the effectiveness of individual policies is surprisingly patchy and there is little international comparative analysis (Painin et al, 1993).

A European Perspective on Public Sector Relocation Policies

The UK has an extensive tradition of civil service dispersal dating back to the Second World War, based on extensive periodic reviews of public sector location. Following such a review by Sir Michael Lyons, proposals to relocate approximately 20,000 public sector posts from London and the South East were accepted by the Chancellor in July 2004 (Lyons, 2004; HM Treasury, 2004a). The Lyons round of dispersal is innovative in several respects. Departments must justify, as part of a spatially sensitive approach to business planning, the location offunctions in London rather than, as was the case in previous rounds of relocation, simply identify blocks of routine work for dispersal. The Lyons review also argues strongly that there is a regional economic case for dispersal and for clustering relocations in city-regions to maximise their impact. France, like the UK, has

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a long history of public and private sector office relocation from Paris dating back to 1955. Offices seeking to establish or refurbish in the capital have had to obtain government approval, and were forced to relocate where it was determined that a Paris location was not essential. Since the year 2000 this policy has focused on producing a more balanced distribution of the public sector, overseen by the Committee for the Territorial Establishment of Public Sector Employment, which not only requires public sector offices to apply for permission to develop in Paris, but also encourages offices deemed not to need to be near the capital to relocate to large regional metropolitan centres and more routine functions to disperse to medium-sized cities in provincial regions (www.citep.gouv.fr). Ministries are required to produce a forward plan identifying functions for relocation, and proposing locational options for functions that are not needed in Paris. The long history of these relocation policies means there is a broad degree of acceptance, however, in Ireland a proposed decentralisation of approximately 10,300 public sector jobs from Dublin has caused a storm of protest over the last two years (Walsh, 2004). Particularly controversial is the fact that the relocation programme includes eight departmental headquarters, and in the first phase this includes the Office of Public Works and Departments of Defence, Arts, Sport and Tourism, Social and Family Affairs (Decentralisation Implementation Group, 2005; 2004a and b). Less widely publicised has been the recent renewal of the Finnish government’s programme of dispersal of government activities (Yliskyla-Peuralahti, 2003; Sotarauta, Mustikkamaki and Raunio, 2004), and the contentious announcement in 2003 by the Norwegian government of the relocation of eight regulatory agencies accounting for 900 jobs from Oslo when unemployment in the capital is above the national average (www.eiro.eurofound.eu.int).

Though the dynamics are quite different, in 1999, the German Federal Government and Parliament were relocated from Bonn to Berlin including 13,000 staff, and in turn additional posts were consolidated in Bonn as a part of an increase in the spatial concentration of the central civil service in Germany (www.bmvbw.de). Outside Europe public sector relocation has also attracted considerable interestincluding the South Korean proposal to disperse 30,000 jobs in 166 government agencies to a number of cities indicates (Jun, 2007). As Richardson points out (2003), schemes to relocate national

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capitals and their associated government administration, and in turn overcome internal political, cultural, religious and economic differences, also have a lengthy history (eg Brasilia, Abuja, Islamabad, Canberra).

There are seven main arguments deployed in supporting the case for public sector relocation from capital cities.

1. Reduction of costs:Public sector relocation from capital cities can reduce operating costs, because of the high costs of office rents and labour in the capital (Marshall et al, 2003).

2. Improvement in the quality of services: It is argued that public sector relocation from capital cities can attract and retain better quality staff in provincial areas where labour markets are less tight, and this feeds through to improvements in the quality of service delivered (Lyons, 2004).

3. A catalyst for change: This motive for dispersal is prominent in the French, Irish and UK proposals for public sector relocation, and has become increasingly significant because of the growing emphasis in European countries on improving the efficiency and modernising the public sector (www.citep.gouv.fr Lyons, 2004; Decentralisation Implementation Group, 2004a).

4. Making government open and accessible:This is a stated objective of the Scottish relocation programme, but it is not clear how this is achieved by dispersal from the capital city which is invariably the centre of the national communications network. Perhaps this objective might more aptly be described as dispersing departments to more appropriate locations, such as relocating the

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agricultural department to a rural area which has been an objective in Finland (Yliskyla-Peuralahti, 2003).

5. Improving policy delivery: It is argued moving staff closer to the ‘coalface’

where policy is implemented improves policy-makers’ local knowledge and facilitates co-ordination by local ‘joining-up’ (Finance Committee of the Scottish Parliament (2004). An interesting aspect of the Norwegian proposals for the dispersal of regulatory agencies is that it is argued that spatial separation will increase their ability to be independent of the organisations that they seek to regulate (www.eiro.eurofound.eu.int).

6. Achieving a better balance between the centre and the periphery:In France, Finland, Ireland and the UK relocation has been used to create jobs and encourage economic development in provincial regions, while at the same time reducing inflationary pressures in the property and labour markets close to capital cities (Lyons, 2004; Decentralisation Implementation Group, 2004a).

7. Making national policy more effective by reducing regional disparities: This is a less prominent feature of relocation programmes,but has featured in the UK debate where Experian (2004) argued that dispersal, by reducing the uneven geography of the country, assists national monetary policy to operate more effectively.

8. National security:Since 9/11 the dispersal of sensitive government functions or the creation of ‘back up’ offices away from capital cities has been seen as a prudent security measure. This builds on the experience of countries such as

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Japan that have used this approach as part of their natural disaster planning (www.mlit.go.jp/kokudokeikaku/daishu/English/er_001.html).

The gains in terms of cost savings and government operation associated with public sector relocation are long-term, but the pain in terms of disruption and the costs of financing relocation are short-term; a significant disincentive for politicians on a short electoral cycle. In addition, many of the obvious pressures for relocation are cyclical, because office rents and labour costs near capital cities increase as the economy expands but ease off when growth declines, and this increases the possibility that political attention will simply move on. Or alternatively there is a temptation for politicians to rush ahead while relocation can be justified, and a failing of some relocation programmes is that they are announced and imposed with limited consultation.

Dispersal programmes face widespread concern that they will disrupt critical administrative functions or that the co-ordination of government at the centre will be damaged. They also inevitably face opposition from vested interests frequently including senior civil servants and ministers concerned that their close relationship and their dependence on support staff will be undermined. An interesting feature of the dispersal programme in Norway is the way the proposed relocation from Oslo divided political parties, employers and trades unions along geographical lines reflecting the spatial impact of the relocation programme (www.eiro.eurofound.eu.int). Trade unions tend to go along with relocation programmes reluctantly and on the basis that they do not involve compulsory redundancy or the imposed movement of staff to new locations (Finance Committee, 2004). Particularly, where programmes are tightly centrally controlled ‘pork barrel’ politics may ensue where regional interest groups compete with each other to gain access to the spoils. For example, reading the UK House of Commons Debates during the 1960s and 1970s gives a good idea of the extent of such special pleading. On a more contemporary note the proposed Irish dispersal programme has been criticised for favouring areas where the ruling party is seeking to increase its popularity at the ballot box (Walsh, 2004). Such widespread political debate and concern is fuelled, in part, by

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a lack of systematic research to support the case for public sector relocation.

Public Sector Dispersal in the United Kingdom Historical Evidence

In terms of public sector relocation, the UK merits particular attention it has a long history of public sector dispersal and since devolution in 1998, with the establishment of the Scottish Parliament and the Welsh Assembly and greater autonomy in Northern Ireland, interesting policy differences have emerged. The operation of public sector relocation in the UK highlights the way in which political centralisation/decentralisation (the devolution of political power to the component national parts of the UK but less so to the regions of England), interacts with organisational administrative centralisation/decentralisation (changes in the way public administration is organised and delivered) and geographical concentration/dispersal via relocation of jobs or in-situ restructuring of posts without actual movement of workers to produce public sector impacts on local economies. In sum, public sector dispersal has occurred over many years at a national level largely without political change, but increasingly organisational change and attempts to improve the efficiency of the public sector have become important. In recent years, further relocation within the devolved administrations is occurring within the component nations of the UK associated with a Parliament and Executive in Scotland, an Assembly and Assembly Government in Wales, and over the longer term the Belfast Agreement is paving the way for constitutional development in Northern Ireland. In Scotland, in particular, attempts to spread the benefits of devolution is producing attempts to bring the Scottish Executive closer to the people and more open and willing to listen to local people following political devolution (Lloyd and Peel., 2006) and this is being associated with public sector relocation.

Over the last forty years or so, approximately 69,000 jobs have been dispersed from London under national programmes of public dispersal and this has contributed to a

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decline in civil service jobsin the capital from 181,000 in 1976 to 87,000 in 2002. Pressure for relocation has been a recurring cyclical phenomenon: including the round of relocation initiated by the Flemming Review in 1963; the Hardman dispersals originating in 1973 and the Lawson-Thatcher relocations beginning in 1988 (Table 1). The former two relocation exercises were ‘top down’, centrally implemented strategies to relieve the problems created by the over-expansion of the organisationally and spatially centralised state concentrated close to the capital. Lyons (2004; 5) describes this as a "mechanical … chess game"leaving the organisational centralisation of the state and its functions unchanged.

Thus, a few short distance relocations of senior staff reduced the costs of public sector operation without disrupting the operation of the senior civil service. A more substantial number of longer distance relocations of self-contained blocks of clerical work (able to operate successfully in more remote areas) to peripheral regions addressed regional disparities by focusing on areas with high levels of unemployment and regional need.

However, the regional objectives of the policy were secondary to public sector cost considerations and policy was primarily driven by the desire to reduce public sector costs without causing significant disruption to public sector administration.

Hammond (1967) draws attention to the influence on the 1963 dispersal programme of wartime attempts to spread the public sector to avoid bombing. He highlights as typical of the Flemming relocations the move of the Ministry of Pensions and National Insurance to Newcastle and Blackpool and the Post Office’s Savings arm to Durham and Glasgow and its Giro Offices to Bootle. One of the most significant developments of the smaller Hardman review was the establishment of the Manpower Services Commission in Sheffield. Nevertheless, both relocation rounds failed to achieve their dispersal target;

Flemming relocated approximately 22,500 out of a target of 57,000 employees and Hardman 11,500 out of 31,000. In winding up the Hardman dispersals, Paul Channon, the Minister of State for the Civil Service Department, highlighted why public sector relocation has tended to be short lived and programmes did not always meet their initial objectives,

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"The present programme would cost over £250 million during the remainder of the present public expenditure survey period to 1983-84, and we should be well into the 1990s before the benefits from dispersal began to offset the costs … important considerations which led to the setting up of the Hard man study no longer apply. In 1973 the civil service was expanding and the government faced the prospect of providing more offices at high London rents. The government intends to reduce the size of the service. Moreover, the gap between office rents in London and the provinces has substantially narrowed and the long-term financial benefits of moving people out of London are that much the less"

(Hansard, 1979; col 902-922).

After 1979, the emphasis was very much on‘transforming’ the civil service using ‘New Public Sector Management’ (Clarke and Newman, 1997). This more entrepreneurial approach to public management, including tight central strategic and financial control, devolved operational management and the introduction of quasi markets and private sector involvement in delivery, apparently made the location of the public sector appear unimportant. The Lawson-Thatcher relocations at the end of the 1980s occurred in spite of reform because wage and property market inflation produced by more rapid growth in London and the South East (fuelled by government re-regulation in the financial sector and pursuit of an enterprise culture), made the operation of the public sector close to London difficult. The ‘break-up’of the civil service into separate agencies and greater autonomy at the departmental level meant relocation was based on a commercial assessment of the needs of individual departments rather than a ‘top down’, centrally managed programme.

Relocations were compressed into a middle band of the country roughly 80-170 miles from the capital (Table 1), and despite a few prestige relocations (eg Department of Health relocation to Leeds, Inland Revenue relocation to Nottingham), the emphasis was still on the relocation of junior staff.

The Lyons Round of Relocation

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Despite previous rounds of relocation, the civil service in the UK remains highly spatially concentrated. Information drawn from the Lyons Review, illustrates that civil servants are concentrated in London, though the long term trend since 1976 has been for geographical dispersal, reflecting the rounds of dispersal discussed in the previous section (Lyons, 2004). The concentration in London is greatest when the higher civil service grades are considered. Although London is the base for 18% of all civil servants, some 67% of the Senior Civil Service is found there, and excluding those working for the Scottish and Welsh administrations the numbers rise to 74%. London also has 47% of staff just below the Senior Civil Service level (Grade 6/7). This pattern of concentration of senior staff in the civil service reflects the spatial centralisation of head offices in civil service departments and other public sector bodies (eg English Heritage, UK Sport). All 20 departmental head offices are in London, though Yorkshire and the Humber shares a headquarters (the Department of Health in Leeds). Of the 310 public sector bodies sponsored by departments recorded in the Civil Service Year Book, 79% are either located or based in London. The spatial concentration of senior decision-making is less strong in the agencies created in the last 10 years or so, nevertheless, the lion's share of agencies (some 55%) is in London (Marshall et al, 2003).

The key Lyons recommendations are summarized in Table 2. Though the proposed dispersal of approximately 20,000 posts from London and South East by 2010 is centrally co-ordinated by light touch "Strategic Guidance" produced by the Office of the Deputy Prime Minister, as in the 1980s and 1990s the programme is built up from individual relocations identified, planned and implemented by those involved at the agency/departmental level. The longer-term slimming down of the Whitehall headquarters of the civil service extends and adds a geographical twist to the ‘agencification’, introduced in the 1990s, which organisationally separated operational from more strategic and policy functions; now only senior strategic functions will remain in the capital. A significant new development is that dispersal and reform are to be more closely connected with relocation. Lyons (2004; 5) proposes relocation as a catalyst for a longer term

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re-engineering of "the nature, organisation, productivity and size of public service functions". This links Lyons firmly to the modernisation of government agenda and explains why it is being implemented by the Office of Government Commerce (OGC) as one strand of the Gershon ‘Efficiency Review’ (Cabinet Office / HM Treasury, 2003).

While it is easy to write a review, it is another matter to implement it successfully.

There is, for example, some reluctance among civil service management and trade unions for the Lyons project. The former will be assuaged in so far as Lyons relocations are pushed into the medium-term, include Non Departmental Public Bodies (NDPBs) rather than core departmental services and do not cut into the senior echelons of the civil service.

However, civil service trade unions are unhappy about the combined impact of relocation and the ‘Efficiency Review’with its associated loss of 80,000 jobs, and the lack of attention devoted to human resource issues. So far, though Lyons has indicated the likely ultimate distribution of relocations (Table 3), only limited information is currently in the public domain on the detailed geographical impacts of the Lyons Review. However, it seems to be largely about the relocation of posts ie it is restructuring rather than the movement of workers. As of November 2006, few senior management jobs are involved:

only 9% of relocated jobs are in the senior civil service (grades 6 and 7); 2% are more strategic policy jobs; and 54% are in more junior administrative officer/administrative assistant grades. So far the emphasis has been on quick wins, and relocations have been dominated by the Inland Revenue and Customs, the Department of Work and Pensions and the Ministry of Defence (62% of planned relocations) where reorganisations were planned prior to the Lyons Review. Relocations are mostly small and largely within the existing public sector estate there does not seem to be a strong attempt to cluster relocations in particular sites, despite rhetoric to the contrary in the Lyons Review itself. Some 80% of 10,000 jobs relocated or planned for relocation are destined for 5 areas: Wales, South West, North West, Yorkshire and the Humber, with the North West and Yorkshire and the Humber performing best for managerial jobs. Most relocation is approximately 100-300 miles, but focusing on London origins, indicates that some 45% of relocations from the capital are within 100-150 miles, roughly similar to the Lawson-Thatcher round of

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relocation. These areas of some growth are occurring in the context of wider job loss, and the government has as a result problems convincing commentators that they are serious about regional development.

The contested nature of civil service dispersal means that transparency and consultation are important, and the UK tradition of periodic reviews is clearly effective in this regard. The Lyons review has set a clear national strategic agenda for public sector relocation. The emphasis in Lyons on building a business case from below so that relocation makes sense for the unit involved is also an important ingredient for success.

The central management of the implementation of the relocation programme through the Office of Government Commerce (OGC) –to co-ordinate national/regional objectives, the management of the civil service estate and achieve value for money for the exchequer looks more suspect. In particular, the connection between relocation and the Regional Strategies of the Regional Development Agencies, to maximise the regional impact of dispersals, has not been well articulated.

Scottish Public Sector Relocation

Though attention has focused on the Lyons Review in the UK; Scotland, Wales and Northern Ireland also have programmes of public sector relocation. TheNorthern Ireland policy lapsed during the 1990s because of the small difference in costs between a location in Belfast and the rest of the province (Coopers Lybrand, undated)but is being restarted as part of a wider Review of Public Administration and its location (Department of Finance and Personnel, 2007), and the Welsh programme relocating support staff for the Welsh Assembly is small (Fullerton and Jones, 2002). However, the scheme operated since 1999 by the Scottish Executive, the devolved administration for Scotland, to relocate public sector workers from Edinburgh deserves closer attention because it is larger and differs markedly from the Lyon’s proposals.

The policy covers some 34,000 staff in the Scottish Executive’s departments and

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agencies, departments of non-ministerial office holders, the Crown Office, National Health Service common services and all Non-departmental Public Bodies funded by the Scottish Executive (Audit Scotland, 2006). The policy has evolved over time, but currently has three objectives to: ensure government in Scotland is more efficient and decentralised;

provides cost-effective delivery solutions and assists areas with social and economic needs (Scottish Executive, 2005). Particularly significant is the Scottish Executive’s vision of "a Scotland in which devolution is applied within Scotland itself," and their view that a more

"efficient and effective and more decentralised" public sector forms part of a "wider vision of a more accessible, open and responsive Government". The Executive argues it is important that "the people of Scotland see public administration as part of the fabric of Scotland as opposed to being distant and centralised" (Finance Committee, 2004 quoted in Lloyd and Peel, 2006; 844). However, as Lloyd and Peel (2006) argue such a policy has under-estimated the "bare knuckle politics" associated with relocation which is often played out in the media. In this controversy the transparency of the policy and the involvement of politicians in the decisions, the criteria underpinning individual relocations and the consistency of their application, the wider scrutiny of decisions and involvement of staff in relocation have all been the subject of debate.

In the Scottish relocation programme, there have been no periodic strategic reviews such as those conducted by the government in Westminster, nor are there targets set for the number of jobs to be relocated or established outside the capital. The approach is similar to the French in that when a new unit is established, reorganised or refurbished, or a significant property break is reached (for example, where a lease comes up for renewal), a relocation review is triggered conducted by an independent consultant. This means that relocation is institutionalised into the operation of government unlike the on-off arrangements that are more typical of national UK policy. However, unlike the French approach, there is no presumption of relocation to a designated area; in an independent locational assessment by consultants locations are scored on a range of economic and social variables before a short list of potential locations is submitted to ministers.

Organisations can include any location within Scotland in their evaluation but there is a

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presumption against locating in Edinburgh, the capital. Ministers make the final decision and the organisation concerned implements the decision (Audit Scotland, 2006).

Between September 1999 and May 2006, the locations of 38 public sector organisations, involving some 4,681 staff were reviewed under the Scottish scheme and of these 28 with 2,833 employees have or would be relocated or established outside Edinburgh (Audit, Scotland, 2006). Of the posts relocated from Edinburgh, 56% of the jobs have been moved to Glasgow, Scotland’s second city. This approach did not create difficulties between 1999 and 2003 when only 1,400 jobs were dispersed from Edinburgh.

An increase in the number of staff involved in location reviews in 2004 (1,800 in that year alone), and the controversial proposed relocation of headquarters units including the Scottish National Heritage to Inverness led to criticism of the absence of a clear national strategy towards public sector relocation. Under intense questioning by the Finance Committee of the Scottish Parliament about the Scottish National Heritage proposed move which apparently did not meet the Scottish Executive’s stated relocation criteria, Tavish Scott, Deputy Minister for Finance and Public Administration, was forced to admit that,

"While there are various factors to take into account when considering a potential relocation, the final decision is always a political one" (Finance Committee, 2004).Trade union co-operation with relocation in Scotland is dependent on no compulsory transfers or redundancies, and this is easier with central co-ordination (for which there is no provision) to reallocate staff who do not wish to relocate with their unit. Transferability of staff in NDPBs where staff are not civil servants and therefore have limited alternative job opportunities within the government service is a particular a problem. Just like Lyons this has resulted in considerable trade union resistance to dispersal.

A critical assessment of public sector relocation policies in Scotland by the Finance Committee of the Scottish Parliament (2004) concluded that they were ad hoc, lacked transparency or consistency and a basis of public support and called for a review to that conducted by Lyons – to build up a "national framework for relocation"and a full analysis of costs and benefits. This resulted in the development of more detailed guidance for the

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relocation process, the issue of statements highlighting the main reasons behind decisions and clearer standards for staff consultation on relocation(Scottish Executive, 2005). A subsequent analysis by Audit Scotland (2006) indicates the Scottish Executive has collected limited information on the costs and benefits of relocation, and the costs of relocation and reduced costs of operation vary considerablybetween relocations. Audit Scotland suggests, as part of a more strategic approach, the need for the development of a database of suitable locations and properties, more detailed consideration of how individual relocations can affect other public sector organisations, attention to how good practice can be disseminated more effectively, the development of appropriate measures of the success of individual relocations and better information gathering and evaluation. Thus, the Scottish experience demonstrates that public sector relocation can be a multifaceted and highly contentious policy, it suggests a clear articulation of relocation policy objectives, developinga consensus about the goals of the policy and a careful assessment of the impact of the policy on the organisations relocating, the public sector more generally and the spatial outcomes involved is important to its success (Lloyd and Peel, 2006).

Evaluation of the Impact of Public Sector Dispersal Relocation and the Operation of the Civil Service

Despite the long history of public sector dispersal and the significant changes involved for the civil service, there has been surprisingly little systematic and detailed research on the impact of relocation on the public sector itself, and research activity tends to be intermittently conducted and to reflect the fluctuating political interest in the topic. Lyons (2004; 31) comments that, "The research base needs enriching and the government would benefit from a clear evidence-based view of the benefits and the best ways in which public and private agencies can co-operate to lock the benefits [of relocation] in". Evaluation methodologies concentrate on the financial costs and benefits of relocation, but even

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though arguably the series of government inspired reviews has stimulated UK research (Painin et al, 1993), there has only been one detailed cost-benefit assessment of the impact of an actual relocation, the study of the dispersal in 1981 of 427 posts in the Overseas Development Administration (ODA) from Central London to East Kilbride in Scotland (Ashcroft et al, 1988). There are also a number of unpublished departmental financial assessments of individual relocations, and a small number of consultancy reports on the likely costs of relocation programmes in the UK, Scotland and Northern Ireland (Experian, 2004; Coopers Lybrand, undated Delloitte, 2004 Audit Scotland, 2006). In the UK, arguably the most extensive pre-Lyons economic review of the case for the dispersal of the public sector from London was conducted byHardman (1973), who argued there was a policy trade-off between reducing civil service operating costs and regional development need. The bulk of his analysis is concerned with identifying the lowest cost location on the basis of operating costs for individual departments, and he argued communication costs prevented all but routine functions with few communications from relocating to less-favoured regions, despite their high levels of unemployment. My analysis questions Hardman’s trade-off in the UK because increased communication costs associated with travel back to the capital from the decentralised location are small relative to the other savings in salaries and office rents associated with relocation. Today in the UK it is possible to achieve substantial cost savings in a wide variety of provincial locations by decentralising even relatively communications intensive functions from Central London.

Developments in information and communications technology and improvements in physical travel since the 1970s have improved the economics of provincial locations. A comparative cost analysis for a public sector head office of 180 people relocating from London in both 1989-90 and 2002-3demonstrates the economics of public sector relocation in the UK (Marshall et al, 2005). In the latter year, for example, overall operating cost savings, measured in terms of office rents, labour costs and business travel, for the office relocating from London are in the range of 20-26% in a number of provincial cities. On the basis of very conservative assumptions, by relocating a communications intensive civil service head office from central London to a variety of provincial cities in 2002-3 it is possible to achieve cost savings of the order of £3-6 million (2002-3 prices) over a

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25-year period, and the payback for the move is 8-11 years (Marshall et al, 2003). The bulk of the savings in operating costs are salary savings and reflect the fact that staff in the capital are paid a ‘London weighting’, a salary premium in lieu of the increased cost of living in the capital, which is removed following relocation. Where such premiums are not paid (as in Scotland) this reduces significantly the scale of savings associated with relocation. Property costs are also important, the cost savings for relocating the same head office from central London in 1989-90 were 30-35% higher than in 2002-3 and this difference between the two decades predominantly reflects the reduction in the rental gradient between London and the regions between 1989, the height of the Lawson-Thatcher boom, and 2003. The savings associated with relocation from the capital are still positive outside central London but are much reduced due to smaller differences in office rents between other parts of the capital and provincial cities.

Other important factors that impact on the scale of the costs associated with relocation is whether staff are paid a relocation allowance and the scale of any redundancy payments for staff that move. The latter is related to whether staff who do not relocate are provided with alternative work in the public sector.

It is notable that such methods of evaluation take a narrow financial perspective and are conducted solely from the point-of-view of the office relocating. Research needs to take a less mechanistic and economistic perspective towards public sector organisations, viewing their financial operation as underpinned in subtle ways by complex and differentiated informal and formal relationships between employees and agencies. Accounts rooted in institutional sociology stress the "embeddedness"of economic action and the way in which networks and reciprocal associations between institutions enable information sharing and mutually beneficial co-operation (Martin, 2003). Amin (2004) argues more broadly that "the scale and density of "intelligent"people and institutions, as reflected in the skill and professional profile of the labour market, the volume and quality of training and education across different levels, the depth of linkage between schools, universities, and industry, the quality and diversity of the information and intelligence between

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economic agents and their wider environment" (2004; 54) are all important sources of institutional knowledge, expertise, adaptability and success.

It is necessary to take a wider perspective and examine the impact of relocation, not just in financial terms, and also from the view point of the civil service as a whole. From this standpoint, there is a lack of data on staffing, recruitment and vacancies classified by department, occupation and region in the UK (Lyons, 2004; 20). Nevertheless, based on the limited evidence available, we have argued that it is the highly centralised and strongly hierarchical nature of the civil service, where both officials advising ministers, senior administrators in departments concerned with policy delivery and their staff are all concentrated near the capital, that produces a spatially concentrated growth in demand for civil service labour that has proved difficult to sustain(Marshall et al, 2005). Thus, spatial relocation has been used to accommodate political and organisational centralisation (Winkler, 1989). Despite devolution in the UK, the spatially centralised and hierarchically organised civil service, combined with buoyancy in the private sector in London and the South East, still acts as a brake on staff mobility and the effective deployment of staff in thenational public service. Interview evidence indicates London acts as an 'escalator' region attracting civil service staff from the provinces as they rise up the promotion ladder (Marshall et al, 2003). Subsequent mobility for such staff is then more likely close to the capital where the job opportunities are greater. However, it is difficult to attract staff to the capital because of the high cost of living. Specialist professional and technical civil and public servants are especially difficult to retain in capital cities because of the availability of alternative job opportunities in the private sector near the capital (Lyons, 2004). The spatial separation of many junior and senior functions also means that it is more difficult to promote through the ranks in the capital. However, clearly contemporary evidence on the occupational profile of relocations and a wider understanding of the occupational structure of the civil service is needed to ground this analysis more securely.

More qualitative case studies of previous relocations conducted by Experian (2004) and the current author (Marshall et al, 2003) in both the UK and elsewhere in Europe

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indicate that following relocation government offices can achieve a range of improvements in operation, including:

◦ Reduction of recruitment and retention problems particularly associated with more qualified staff because offices outside the capital have lower recruitment costs and better staff retention;

◦ Improvements in the quality of office accommodation resulting from vacating high cost old, outdated and inefficient buildings in the capital. Relocation facilitated a move to a prestigious new bespoke building designed to meet the current business needs of the organisation;

◦ Work can be centralised at one location reducing difficulties associated with spreading work across many sites in the largest cities

◦ Moves frequently occurred at a time of considerable change within the organisation and were used to accommodate or reinforce this;

◦ Post-move evaluations suggest that relocations can achieve improvements in business operation, including significant improvements in response times and in the quality of service provided. This reflects the fact that the quality of staff available in the provinces is regarded as higher than in the capital.

The case studies also highlight the problems that arise when relocating more senior civil service staff from the capital. Isolation from the rest of the department may result from dispersal. Moves tend to underestimate the need for increased business travel back

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to the capital to maintain access to Ministers, and the latter disruption often falls particularly on staff critical to the operation of the department. However, the case studies also show where potential communications problems are identified in advance, retaining a small base in the capital (as is currently proposed for headquarters relocating from Dublin) can successfully provide access to parliament or other departments and opportunities can be provided for some staff to work from more than one site or from home. Reorganising the way work is conducted by using telephone and video conferencing facilities and electronic means of communication (especially email) is particularly effective where the ICT network is updated at the same time as relocation. We suggested in our evidence to the Lyons review that creating a critical mass of civil servants at the destination location and establishing related functions at the same site will make relocation more successful by reducing long distance communications and providing local career opportunities for staff (Marshall et al, 2003). This argues for the promotion via relocation of more 'sustainable locations' of civil service work in provincial regions that contain a fuller occupational pyramid.Over-time, this could mark a move towards a stronger regional civil service, if the growth of more senior grades outside the capitalwere linked to the creation of centres of specialisation or expertise in the civil service outside the capital, akin to the regional structure that is often found in large devolved accountancy or consultancy organisations. However, in the light of the Irish proposals to spread civil service dispersals widely, it would be helpful if more systematic and reliable evidence were available on these matters, especially if the research were able to explore the effects of the relocation of an office on the wider civil service.

Positive Impacts of Public Sector Dispersal on Origin and Destination Areas

An alternative approach to evaluating public sector dispersal is to focus on the impact on local economies. In the UK, Hardman (1973) conducted an analysis of the regional case for civil service dispersal based on an assessment of the direct and indirect employment created in the destination region. However, he took a narrow view of the employment benefits of relocation arguing "there is little multiplier effect from moving

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civil service jobs from London to less-favoured economic areas" (page 6). This conclusion was based on the assumption that relocated offices would purchase little or no goods and services, and there would be little in the way of additional consumer expenditure in the local area. Hardman also stressed the high level of displacement associated with the relocation of civil service jobs. He argued that relocation would have little impact on local unemployment because there was a mismatch between the white-collar employment dispersed from London in which women predominated (because it was more routine clerical work), and the blue-collar male unemployment in destination locations. Civil service relocation would, therefore, either attract staff from existing employees, thus bidding up local wage rates and damaging local competitiveness, or alternatively increase female activity rates and bring a "hidden female labour reserve"into the labour market (Hardman, 1973; 38). Given the growth of subcontracting in the civil service, including catering, cleaning and security, and the increasing reliance of the civil service on information and communications technology it is unsustainable to argue that there is nolocal civil service multiplier from the purchase of goods and services (Experian, 2004).

Hardman’s analysis arguably denigrated the growth of women’s employment in problem regions in the 1970s, but it is certainly less applicable today. The growing participation of women in the workforce, the growth of white collar jobs for both sexes and the changing gender mix of the civil service have all transformed public sector labour markets (Marshall et al, 1999). Today Hardman's view that relocated junior office jobs in the civil service are taken solely by women leaving blue-collar males unemployed is over-simplified; nevertheless, his desire to assess the impact of relocation on the local economy is sensible.

Regional income and employment multiplier models estimating the impact of public sector relocation on the local region take a less restrictive view than Hardman. Ashcroft and Swales (1982a and b) developed a modified Keynesian multiplier to estimate the first round impact of the increased consumer expenditure associated with proposed dispersals of the Property Services Agency (PSA) to Cleveland and the Ministry of Defence (MoD) to South Glamorgan. This showed the impact of dispersalon the local economy is critically

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dependent upon the type of jobs involved in the move, the numbers transferring from London and the numbers recruited locally. This model was applied to the actual ODA relocation discussed above, where 43% of the posts were in administrative ‘mobile’grades where staff can expect to move round the country. This is lower than both the proposed MOD and PSA dispersals, and this means the incomes of the dispersed civil servants were lower, which reduces local consumption expenditure and the additional employment.

Nevertheless, the 381 civil service jobs in East Kilbride increased short-run employment (ignoring the longer term impact on local authority expenditure) in Strathclyde by 436 (an employment multiplier of 1.14). Long run impacts were estimated to be 10% higher. This estimate of the impact of the ODA dispersal on the local economy does not include increased local purchases by the civil service office. Experian (2004), as background research for the Lyons review, estimated the multiplier impact (including indirect and induced impacts) of the NHS/DSS moves to Leeds and the Patent Office relocation to Newport, using regional input-output tables derived from location quotient data. This confirms the importance of the size of the local economy. The analysis suggested a short-run multiplier of 1.4 for the head office moves to Leeds and 1.2 for Newport, which was reduced to 1.3 for Leeds and 1.0 for the small Newport economy when local displacement (see below) was taken into account. These results are consistent with the estimates of local multipliers in a range of impact studies (Experian, 2004), however, they have, with one exception, not been based on impact studies of actual government offices relocating.

According to the regional economic literature, a shift in the public sector from capital cities can have a positive impact on the fortunes of lagging regions whilst also freeing up some capacities in the capitaland reducing inflationary pressures there (Armstrong and Taylor, 1993). By releasing scarce skills to the private sector in labour markets in the more developed part of the economy, it may also contribute to national economic growth without damaging the economy of the capital and its hinterland (Jefferson and Trainor, 1996). Relocations involving a significant number of professional and senior administrative jobs would help to bolster public sector skills and regional institutional capacity. However,

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whether actual relocations result in a reduction in regional disparities is an empirical question determined by the scale of dispersal and its spatial distribution. In a modelling exercise of the economic and demographic impact of public sector dispersal and its impact on national growth in South Korea, Myung-Jin (2007) suggests the relocation of parts of the government to Chungcheong province (which is only 50 minutes away from Seoul by train) has little impact on regional disparities because it is essentially an extension of the capital region. This analysis, contrary to the Experian (2004) work also suggests public sector dispersal may be less effective than private sector relocation because there are less strong backward inter-industry linkages.

Research has focused primarily on the employment impact of relocations on destination economies. Yet as Amin et al (2003) indicate reducing the power of the capital lies at the heart of attempts to improve the regional balance of the economy. In an argument that has parallels with the Irish proposals for civil service relocation, they suggest new ways of dispersing economic activity to the regions including the decentralisation of the headquarters of public sector bodies from the capital to create a multinodal nation with a "dispersed centre" in which the nation does not "speak from one place". Evidence from Wales following the establishment of the Welsh Assemblysuggests devolution can help promote the development of a stronger more effective civil service, and the potential of dispersal to strengthen Government Offices in the English regions providing the additional functions outlined in the White Paper ‘Your Region, Your Choice’, and thereby improving the delivery of services at the local level has been argued elsewhere (Marshall et al, 2003). However, the more radical transformation envisaged by Amin et al (2003) in which whole departments are dispersed from London is discounted by Lyons on the grounds that it is too disruptive of the central administrative core and makes central ‘joining-up’ difficult. It is believed the Irish government has conducted an internal investigation of the impact of its relocation of headquarters on the department itself, strongly related departments and connections with Brussels, but the results have not been published. In the UK there has been no research investigating the impact of relocation on government office communications since the office diary studies that were

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popular in the 1960s and 1970s (Goddard, 1973).This is a serious omission given the divergence between the Irish and UK approach towards dispersing or retaining headquarters activities in the capital.

Potential Negative Impacts of Relocation to be Managed

In evaluating public sector relocation in the United Kingdom, insufficient attention has been paid to the potential negative impacts associated with public sector relocation. The main potential negative impactsinclude the fact that increased demand in destination regions may increase property and labour prices. Growth in the non-market sector may crowd out the private sector and have negative impacts on enterprise and initiative in the local economy. The increased dependence of a regional economy on the public sector also makes it more vulnerable to reductions in government expenditure. Nevertheless, in a United Kingdom context, this paper suggests that potential negative impacts represent issues to be managed rather than reasons to discontinue a policy of public sector relocation.

It is certainly the case that dependence on the public sector means that areas are vulnerable to reductions in government expenditure (Marshall et al, 1999). Public sector call centres, an important source of new jobs in peripheral areas in recent years (Bristow et al, 2000), are like their private sector counterparts in principle vulnerable to transfer overseas. To date there have been few moves abroad, though call centres contracted to the private sector to manage could ultimately result in the transfer of activity offshore. In evidence to the House of Commons Committee of Public Accounts (2003; 15) in the UK, the Passport Agency and the Environment Agency, both of whom outsource their call centres, claimedthat there is no risk of the private contractor deciding to base them overseas because the location of outsourced call centres has to be agreed with them.

However, Siemens, who run a call centre on behalf of National Savings, have recently negotiated a transfer of functions off-shore (www.pcs.org.uk), and such leakage will clearly become more of an issue in the future. In contrast, the view that expanding the

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public sector reduces the entrepreneurial capacity of problem regions reflects a misreading of the nature of their under-development. Here public sector growth provides a palliative for the long-standing under-performance of the private sector that has resisted the regional policies of successive governments. Today, the emphasis from government on improving public sector efficiency and the adoption of private sector practices also means it is more difficult tosustain the notion that the public sector is inherently inefficient. In any case, any potential problems may be mitigated where the number of mobile public sector posts is small relative to the size of the regional economy. Negative effects on destination regions are also likely to be minimised by concentrating relocations where there is a slack labour market and sustained high levels of local unemployment, where the beneficial effects of increased employment opportunities will predominate (Jefferson and Trainor, 1996).

The Lyons review considered the possibility that expanding public sector clusters in provincial areas risks a danger of crowding out private sector employers by bidding up local wages and causing local displacement. To combat this problem it proposed aligning public sector salaries more closely with local labour market conditions by introducing greater flexibility in public sector wages. Such thinking on the inter-relationships between local pay and relocation in the civil service needs further clarification. In so far as the movement of civil servants from the capitalis being proposed the normal arrangement (in previous relocation exercises in the UK) is for relocated staff to retain their London or South East salary weighting, which remains fixed and is eroded over time by annual salary increments. This practice is likely to be retained because it would be impractical to encourage staff to move and take a pay cut at the same time. Where the movement of posts is proposed they are paid the rate for that job as determined by existing pay scales (though it may be possible to employ staff in the provinces on lower grades than in London). So aligning mobile jobs in the civil service with wages in the local labour market requires altering wage rates in the relevant agency or department, because pay in the civil service is delegated to the agency or departmental level. There is already considerable variability in salary levels between agencies and departments, which take

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account of differences in labour market conditions, though these are not specific to one area. Leaving aside such practical considerations, the bidding up of local salaries by the introduction of public sector work assumes a tight labour market. Such an assumption appears to derive from Lyon’s desire to cluster relocated jobs in selected provincial cities, but if jobs are spread more widely as in Ireland there is likely to be less of a problem.

Finally, if greater wage flexibility meansin effect reducing public sector wages in problem regions, it will have a negative overall effect on regional growth where civil service demand for labour is inelastic (which may be likely in the present climate of staff reductions) and this could outweigh any reduction of displacement effects from relocation.

The relocation of public sector work also needs to take account of the potential negative impacts on origin areas. This is again a relatively neglected area of research in the United Kingdom the character of public services in capital cities, the inter-connection of public sector agencies and their wider influence on the private sector and the wider regional economy has received little attention. It is clear, however, that though relocation is usually taken to meet employers’business needs it has significant impacts on the individuals involved, their families and through them the origin economy. Research shows that today those involved in relocation have a wider range of living arrangements and a greater diversity of family circumstances than in previous rounds of civil service dispersal, and partners’employment has become a more prominent issue (Green and Canny, 2003).

The received wisdom is that in the long run, moving jobs from capital citiesis unlikely to have significant negative consequences for these areas due to the tightness of the labour and property markets and the attractiveness of these areas for new investment in finance, business and creative services (Buck et al, 2003). It can also be argued that relocation can avoid undermining the international position of the capitalas a financial and corporate headquarters centre by retaining capital civil service offices that such organisations find attractive. This suggests that decentralisation of government work should be selective and tactical. It should be selective in the sense that it recognises that there may be a clear case for certain functions to remain close to the capital. Relocation should focus specifically on those segments of the labour market where the public sector is experiencing

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the greatest difficulties of operation. Both origin and destination regions are more likely to benefit from the relocation of more senior staff because the public sector finds it particularly difficult to attract and retain such staff due to the alternative employment opportunities in the capital(Experian, 2004). While destination locations will also benefit because these staff increase consumer income multipliers and reduce the likelihood of crowding out because such staff are under-represented in provincial regions. Relocation should also be tactical in that it should focus on ‘hot spots’ in the capital and its hinterland rather than encourage relocation from labour markets where there is high unemployment, and social deprivation.

Conclusion

Given that public sector relocation policies have been pursued by various United Kingdomgovernments since shortly after the Second World War, it is surprising that there is such a narrow base of research appraising these policies. Nevertheless, returning to the eight reasons given for public sector dispersal in section 2; on balance the existing research evidence suggests there are benefits to public sector relocation from capital cities, including reducing public expenditure (reason 1), job creation and regional regeneration in provincial areas (reason 6). Though, whether dispersal significantly reduces regional disparities; depends critically on the scale of relocation, its distribution and the type of jobs relocated in relation to the size and character of the local economy into which they are inserted. There is qualitative evidence that relocation achieves improvements in public sector organisation and service delivery, and acts as a catalyst for change (reasons 2 and 3). It is less certain whether relocation leads to improvements in either national or local policy delivery (reasons 5 and 7), though the benefits of centralised versus devolved policy delivery is receiving increasing attention, and the inter-connections of relocation and devolution deserve further research. There is little evidence on whether dispersal makes government more accessible (reason 4), and national security grounds for relocation for obvious reasons perhaps have received little attention (reason 8).

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In principle, then, it is possible to support public sector relocation policies; the question is do they deliver in practice, which is a question of how to manage relocation appropriately? Public sector dispersal depends critically on a willingness to take a long term view. It is easy for sceptics to point to the short attention span of politicians, organisational inertia in the civil service and the reluctance of many senior civil servants, and frequently their political masters to work outside capital. At the United Kingdom level, in contrast to Scotland, the absence of an institutional ‘trigger’ mechanism for government offices to be considered for relocation may count against Lyons relocations in the longer run. The Scottish relocation programme demonstrates that enforcing relocation without a wider review to build a consensus behind the programme or an accepted destination area for dispersal may lead to dispute. There are also significant risks associated with relocation that need to be managed most obviously that disruption could threaten the core administration. It is not surprising, therefore, that Lyons argues for preserving a ‘strategic core’ of the civil service in London, unlike the current Irish proposals that relocate headquarters. The relocation of headquarters functions with numbers of more highly paid public sector employees will undoubtedly be of benefit to provincial region economies. In practice in a United Kingdom context the historical evidence suggests it is difficult to move more than junior posts from the capital. One way in which this problem can be dealt with is via the establishment of administrative units that act as centres for the regional civil service. For this reason the author’sadvice to the Lyons Review on behalf of the English Regional Development Agencies was to develop a stronger regional civil service, akin to the regional structure in accountancy firms or management consultancies, building on the expertise of the existing agencies in the regions. From this perspective perhaps a major omission from the Lyons review, is a lack of a vision for the regional civil service to combine with its notion of a strategic core at the centre. Without such a vision public sector relocation is likely to continue the emphasis on relocating routine jobs from the capital which hasa less positive impact on regional economies because of their lower incomes and multiplier impacts. This contrasts with the detailed attempt to maximise local impacts in the Irish relocation programme.

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On the basis of this review of the practice of public sector relocation in the United Kingdom, it may be tentatively suggested that to be successful public dispersal programmes should stress the importance of building a business case for relocation from below so that the relocation makes sense for unit involved. This should also be combined with a clear strategic agenda and goals for the programme including central co-ordination of the government estate and staff redeployment. Government should establish clear central guidance to ensure public sector organisations establish a project team with the necessary skills and knowledge to conduct the relocation, and that they carefully appraise the risks associated with relocation and take action to mitigate them. Governments also need to display commitment to cover the up-front costs of relocation. Attention to the human dimension of relocation is essential - it is important to ‘take staff’ with the dispersal.

Governments should also take action to ensure that they collect the appropriate information to measure the impact of policy on public sector operation and the local economies affected by relocation. Mistakes made in the United Kingdom include announcing or imposing a policy without sufficient consultation to build a consensus, and a lack of transparency in the operation of policy.

Thinking in an international comparative context, a number of issues deserve further attention including most obviously, given the diverse attitudes taken towards the relocation of headquarters functions in the United Kingdom and say Ireland, a fuller assessment of the need for a strategic core of public sector workers in the capital is required. This has implications for the balance in relocation between self-contained junior functions and more senior staff. The latter have a more profound impact on the destination region because of their high incomes and more significant multiplier impacts. The extent to which employment is clustered in a small number of destination areas or dispersed more widely also deserves research. The former provides staff with more career opportunities in the new location, and a focussed dispersal will obviously have a more profound impact on the destination area. On the other hand, spreading relocated employment more evenly reduces inflationary pressures and the potential crowding out or displacement of

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employment from existing employers. Surprisingly, at least in the United Kingdom, there have been few assessments of the impact of individual relocations on destination areasor indeed the wider implications for origin locations that have lost jobs. Given the increasing emphasis on modernisation of public services the contribution of relocation to reform, including the impact of relocation on the type of work carried out by the civil service deserves urgent critical assessment.

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