Controversial proposals to relocate thousands of civil servants from central London to Canary Wharf met with opposition from not only the Treasury but also cabinet secretary Sir Robin Butler, newly released Cabinet papers reveal.
In a memo to Andrew Turnbull, John Major's principal private secretary, dated 23 July 1991, Sir Robin warned against forcing civil servants to relocate to Canary Wharf.
He wrote: "It does not go well with the general message to civil servants to improve their efficiency if they are asked to be the instruments of a policy of this sort to help Docklands, contrary to the belief of their ministers and their senior management about how they can most effectively and economically operate."
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Sir Robin added that if the PM has any reservations it would be better to deploy the arguments against the "forced move" to stop it from taking place, because "the worst of all outcomes would be likely to be a failed attempt to get a package of moves to Docklands."
Just a few days later, Downing Street policy adviser Jonathan Hill complained to Major that there had been a "damaging leak to the FT which I'm afraid bears all the hallmarks of the Treasury”.
He commented that it was “clearly intended to make it more difficult for us to go ahead with relocating officials to Docklands”.
In his memo to the prime minister about the proposed relocation of government offices to London Docklands, dated 26 July 1991, he added: "Whitehall is shaping up to run this one into the sands."
Hill warned: "Politically we cannot afford to let Canary Wharf fail."
But disagreements within government dragged on for months. In 15 May 1992, in a memo to the prime minister setting out the options for relocating civil servants to the Docklands, Sir Robin cited the reluctance of several Whitehall departments to relocate staff.
He wrote: “You will also want to ask yourself whether, if we were looking from outside at another country’s government, we would really think it in their long-term interests to divide their central government operation between two such geographically separated parts of their capital city.”
By October that year the relocation plans had been abandoned in favour of civil servants remaining in central London.
Other documents released by the Cabinet Office for the first time last month also show how officials warned that the privatisation of the Property Services Agency did not make “economic sense.”
In a confidential note to the prime minister, dated 4 October 1990, policy advisers Carolyn Sinclair and John Mills, warned: “this is running into trouble.”
They said: “The Treasury are right to be alarmed. There is a real risk that privatising PSA could become a costly business, with taxpayers’ money needing to be pumped in to make it look attractive to buyers. In the end this option could cost more than closure, despite redundancy costs.”
The following day a confidential note to John Major by Barry Potter, private secretary, dated 5 October 1990, warned that the “proposed privatisation of PSA is in serious difficulty.” It described the agency as an “inefficient, badly run organisation” and that “on any sensible commercial criteria PSA has no viable future.”
Potter commented: “Having committed itself to privatising PSA, the government will only achieve this now by large injections of subsidy to make the company attractive to potential purchasers. The political case for doing so, having taken the necessary legislation, is clear; but it does not make economic sense.”
In the event, the agency was finally sold off by 1993 but a subsequent report by the National Audit Office revealed that it had come at a cost to the taxpayer of almost £300m.