Escape From Whitehall

Government Relocation
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WHITEHALL
ESCAPE
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WHITEHALL

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WHITEHALL
Tug of War: A History of the UK Civil Estate
PROPERTY
SERVICES
AGENCY
1973-91
?
LAISSEZ-FAIRE
1991-05
GOVERNMENT
HUB
PROGRAMME
2014+
PROPERTY
CONTROLS
2005-10
GOVERNMENT
PROPERTY
UNIT
2010-14

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PROPERTY SERVICES AGENCY
1973-91
• Between 1973-1991 government property was led by the Property
Services Agency (PSA), preceded by Property Holdings, a legacy
unit of the Ministry of Works
• All civil estate property was commissioned by the PSA but often
without consultation. PSA let contracts with the construction industry
on behalf of departments
• Heavily centralised and with the wrong incentives, the PSA was very
inefficient. There are a few stories of property being procured so late
that its original purpose was forgotten or obsolete
• For these reasons, it was partly privatised and then abolished in 1994

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WHITEHALL
LAISSEZ- FAIRE
1991-2005
• Following the abolition of the PSA, departments were given no
central direction on their property purchases
• This was an expansionist economic climate; departments were able
to buy and sell property largely unrestricted
• This resulted in a large, sprawling and wasteful civil estate –
purchases were made on leases lasting decades, for very high prices
and with very little coordination between departments

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PROPERTY CONTROLS
2005-10
• From 2005, “property controls” were introduced to bring the civil estate under
better discipline
• Characterised by DAO 05/05 – “Dear Accounting Officer” letters which
requested justification for current estates and premises, seeking to
rationalise where possible
• The controls were managed by the Office of Government Commerce (OGC),
placing restrictions on new builds and requiring HM Treasury to sign off all
new leases.

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WHITEHALL
ESTABLISHMENT OF GOVERNMENT PROPERTY UNIT
2010-14
• The Government Property Unit (GPU) emerged in 2010 as a more powerful
OGC, with a renewed mission to restore taxpayer value post 2008 crisis
• The GPU constituted three divisions, including civil servants from the
previous property units, private sector professionals, and a core of staff from
the Government Offices of the Regions, allowing the GPU a presence in
every English region
• Under this premise, the GPU placed a moratorium on new builds, negotiated
down prices and put pressure on departments to rationalise their office space
• The GPU also made progress on resurrecting the old PSA idea of an
England-wide network of government centres controlled by a single landlord
organisation

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GOVERNMENT HUB PROGRAMME
2014+
• GPU, catalysed by the HMRC Building Our Future Programme, began to
advance the concept of purpose-built, large scale government hubs
• However, GPU’s focus on rationalisation and consolidation dramatically
slashed the size of the civil estate, leading to the sell-off of many offices
in England’s smaller towns and consolidating them in regional “capitals”
like Bristol, Leeds, Newcastle and London
• The civil service was restructured during this time, with many back-office
jobs lost while the senior civil service was left intact
• The overall result was a proportionate surge in the number of civil
servants based in London and the South East vs the rest of England

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WHITEHALL
PROPERTY
SERVICES
AGENCY
1971-94
?
LAISSEZ-FAIRE
1991-05
GOVERNMENT
HUB
PROGRAMME
2013+
PROPERTY
CONTROLS
2005-10
GOVERNMENT
PROPERTY
UNIT
2010-13
Government is destined to grow through Brexit, NHS
requirements and other demand – where will
new civil servants go?
Government is at a major crossroads on what its future
estate should look like

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The Choice
Catalysts
Government expansion
1
Cost and distribution of
Civil Service
2
Property events
3

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1
Since the financial crisis, government efficiency and austerity
looked at reducing the government payroll. Under the early
years of austerity, projections were that central administration
would continue to decrease owing to efficiency and better use
of technology
However, Brexit and renewed investments in front-line public
services is changing this trajectory: this has led to the
expansion of government and establishment of new agencies.

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WHITEHALL
1
Agencies to be Created
AI Health and Care Agency
Centre for Tackling Social Injustice
Health Import / Export Controls Office
Environmental Waste Crime Enforcement
Agency
Social Prescribing Academy
Organisations created since
June 2016
NHS X
Government Property Agency
Homes England
Infrastructure and Projects Authority
Dept. for Exiting the EU
Institute for Apprenticeships
NHS Counter Fraud Authority
NHS Cyber Security Centre
Dept. for International Trade
Trade Remedies Agency
Office for AI
Centre for Autonomous &
Connected Vehicles
Office for Low Emission Vehicles
Social Work England
Organisations with Expansion
Plans
Medicines & Healthcare
products Regulatory Agency
Highways England
Civil Aviation Authority
HMRC
HM Passport Office
National Crime Agency
Rural Payments Agency
Environment Agency
Food Standards Agency
Competition and Markets
Authority
Financial Conduct Authority
NEW BODIES
CREATED SINCE 2015

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Civil Service
2
The government estate costs £2.6bn to run each year, and comprises some 7.7 million m2, with 60% accounted for by four
departments: DWP, MoJ, BEIS, and HMRC.
22%
17%
13%
8%
8%
8%
7%
7%
4%
3% 3%
South East
London
North West
East of England
South West
Yorkshire and the Humber
East Midlands
West Midlands
North East
Wales
Scotland

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Civil Service
2
0.00%
5.00%
10.00%
15.00%
20.00%
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Permanent Civil Service Employees - England
London North West South West South East Yorkshire and The Humber North East West Midlands East East Midlands
7680
0
1000
2000
3000
4000
5000
6000
7000
8000
9000
Senior Civil Service by Region
Cuts elsewhere in England have led to a significant rise in the
proportion of civil servants based in London, especially from 2013
The profile of the civil service is getting more senior, owing to cuts to lower grades
The Senior Civil Service remains overwhelmingly concentrated in London

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Property events
3
Owing to the previous moratorium forbidding long
leases, government took a number of short-term
extensions between 2010-2020.
It therefore has a pipeline of property events (including
lease breaks and reviews) taking place over the next 5
years, particularly in London.

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WHITEHALL
99 Gresham Street
30,000 sqft
FTE: 350
Lease End: 2023
39 Victoria Street
88,500 sqft
FTE: 1,100
Lease End: 2025
Skipton House
250,000 sqft
FTE: 2,500
Lease End: 2021
Fleetbank House
230,000 sqft
FTE: 2,300
Lease End: 2022
London Total Civil Estate:
• 16 million sqft
• FTE: 83,500
• 223 individual lease-
breaks by 2025
Property events
3

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The Choice
Catalysts
1
Civil Service
2
Property events
3
At present, government is more
London-centric and more senior
than ever before:
68% senior civil service in London
20% civil service in London overall
It will need a new approach to
accommodate investment already
underway and post-Brexit planning,
but it will also have to consider a
large number of property events on
the horizon.
All of this provides the opportunity
for real change across government.

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WHITEHALL
The Choice
Catalysts
Government
Superhubs
1
Places for
Growth
2
Industrial
Strategy
3
All of this provides the opportunity
for real change across government.
Two official programmes are
underway to address the
opportunity for transformation in
workforce and estates, with a third
tangentially linked:

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WHITEHALL
Government
Superhubs
1
• GPU/GPA programme to open 18-22
regional hubs in major cities and 200
mini-hubs
• Canary Wharf operational (and full, as
of opening, including HMRC, MHRA,
MoJ)
• Linked with HMRC’s hubs
programme:
• 13 sites, construction underway in 10
(additional 5 specialist and 8
transitional)
• Majority of sites due to be operational
by 2021
Unknown whether there
will be sufficient space
for Whitehall, let alone
government expansion
1
At least 250k jobs in
areas not covered by
the programme
2
Civil service jobs in
93% of LAs at risk of
relocation – often to
already-prosperous
regional city centres
3

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WHITEHALL
The Choice
Catalysts
Government
Superhubs
1
Places for
Growth
2
Industrial
Strategy
3
1
Civil Service
2
Property events
3

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Places for
Growth
2
• Programme to redress the London-
centric nature of the civil service:
• Move up to 1,000 public sector posts
out of London & SE by 2022
• Move ‘thousands more’, including
senior grades, by 2030
Estimated job numbers
very small % of total
47,430 in Whitehall
89,100 in London
1
Misses the point: 68%
of Senior Civil Servants
still work in London
2
Very slow: at current
rate, entire civil
service will be
relocated by 2815
3

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Industrial
Strategy
3 Published in November 2017 as part of
preparing the UK for a post-Brexit scenario
Aims to promote cross-sector collaboration
(industry, government, university and
research) in specific centres focused on
specific challenges.
Targets funding towards specific growth
industries to boost UK productivity and
international competitiveness
The 4 Grand
Challenges
Clean Growth
AI & Data
Ageing Society
Future of Mobility

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WHITEHALL
Industrial
Strategy
3 Government has also called on all 44 LEPs to
draft their own Local Industrial Strategies
These provide the golden opportunity for
government to partner its departments with
places of high growth and investment already
underway
UK Hydrographic Office
Accelerating uptake of geospatial
marine data markets for social good
Coventry Friargate
De facto HQ of Homes England at
core of built environment campus

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The Choice
Industrial
Strategy
3 Escape from
Whitehall

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WHITEHALL
Escape from
Whitehall
3
The Government’s Places for
Growth programme promises to
align closely with National and
Local Industrial Strategies, but
there is little sign of this taking
place
An equitable distribution would see
Local Industrial Strategy categories
(areas) aligned with Government
presence (columns)
Instead, the civil service – and
particularly senior decision-makers
– remain concentrated in London

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WHITEHALL
Escape from
Whitehall
3
Example 1:
The Humber LEP has several outlined
specialities in clean and low-carbon
energy and battery technology yet no
BEIS presence whatsoever
Example 2:
Likewise, the Stoke on Trent LEP cites
specialities in cutting-edge gene and cell
therapies, yet contains no Department of
Health or ALB infrastructure
Example 3:
The Marches LEP meanwhile contains
a range of manufacturing and
autonomous technology, but no
supporting government

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WHITEHALL
Escape from
Whitehall
3
What Government should be doing: (?)
Using the LIS as a tool, government can relocate
departments, public bodies and appropriate agencies to
where they will make the most difference to local growth

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The Choice

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London Civil Service Change over Time (%)

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Rest of England (Excluding London) Civil Service Change over Time (%)

Escape From Whitehall

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