Relocating the majority of Office for National Statistics jobs from London to Newport has “done little” for the local economy, while it may have had a “negative impact on the quality of the ONS output”, an analysis from the Centre for Cities thinktank finds.
With an office located on an out-of-town campus, the ONS does not sustain any local businesses, while the sensitive nature of ONS work means that it does not interact with external bodies as much as a Whitehall department does, the report states.
This has rendered the move “not especially successful” in boosting regional growth – a stated aim of the 2004 Lyons review, which looked at the location of public sector jobs and prompted the decision to relocate the ONS.
"The move of these jobs has done little for Newport beyond the actual jobs themselves, while it may have had a negative impact on the quality of the ONS output," the report says.
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The analysis comes after a 2015 review conducted by Sir Charlie Bean, former Bank of England deputy governor, found that the move had a detrimental impact on the quality of ONS work because 90% of London-based staff decided to quit rather than relocate, leading to a “resultant loss of expertise”.
Only seven senior civil servants opted to follow their job to Newport.
Jonathan Athow, ONS director-general for economic statistics, said: "At the time of the Bean Review, ONS said it would develop the long term capacity of the Newport office, building on its role as the home of economic statistics. Since then, we have made good progress, for example building our Data Science Campus on the site, which was formally opened in March 2017.
"ONS has also been strengthening its London presence to increase its analytical capability and engagement with key users."
The Centre for Cities briefing focuses on the economic impact of relocating well-paid public sector roles outside of London, with a focus on the BBC, which moved its national operations to Salford in 2011, and the ONS, which switched 1,000 London-based jobs to Newport in 2005.
Although the BBC move has had a more positive effect, in both cases, the findings show that impact to date has been fairly limited beyond the relocation area, the report says. "If a [future] relocation is to take place, then it should be subjected to a thorough evaluation," it concludes.
There can be other, non-economic reasons to move public sector jobs out of London which the report does not consider, the authors conceded, such as enhancing devolution or making public bodies more representative of the UK.
The Conservative manifesto for June's election pledged to move more civil servants out of London and the south east, including senior civil servants, to encourage the development of new clusters of public services, while the Cabinet office minister Chris Skidmore has pledged to place the more than 20 new public bodies likely to be created following Brexit outside London. While just 23% of civil service jobs were London-based in 2016, 53% of staff in grade six and above were located in the capital, and just 12% of all administrative officers and assistants, according to Centre for Cities.
In 2015, HM Revenue and Customs announced plans to consolidate its regional estate from around 170 offices to 13 regional hubs, a decision which was questioned by the Public Accounts Committee in June. PAC members said that potential savings may not outweigh problems for local employment.
HMRC is forging ahead, and yesterday signed a lease on office space in central Cardiff, to be used as one of its regional hubs.
Across Whitehall, there are plans to slash the number of government buildings from 800 to 200, and save more than £1bn by 2022.