The Subplot | Civil service relocations, York, Blackpool

Welcome to The Subplot, your regular slice of commentary on the business and property market from across the North of England and North Wales.

THIS WEEK

• The Relocation Game: the government claims a super-fast victory in its efforts to grow regional civil service jobs, but is it a game worth playing?
• Elevator pitch: your weekly rundown of who is going up, and who is heading the other way

THE RELOCATION GAME

Is it worth playing?

The UK government says it will meet its target of moving civil service jobs to the regions by 2027, not 2030 as originally planned. Does this mean more will be relocated? And does it even matter?

Dawn broke on Tuesday to news that the cabinet office reckoned it would hit its target of relocating 22,000 civil service jobs out of London (to the regions) by 2027. That is three years earlier than the original deadline of 2030. Winners are (or will be) Salford, where the new Department of Science is landing; the Darlington Economic Campus, which won a slice of the Department for Business and Trade; and Wrexham, where 300 or so roles from the Ministry of Justice and Department for Work and Pensions will be located.

Why oh why

A statement suggested the moves – part of the Places for Growth policy – were intended to make “our civil service more efficient and representative of the wider public,” a claim which touchingly assumes that one leads to the other. It was also to “deliver economic benefits to regions across the country,” about which more in a moment. Importantly, none of the quotes from cabinet office minister John Glen suggested yet more hitherto unplanned relocations were coming, given the quick work so far.

Exciting stuff

For now, there’s plenty of action in progress to accommodate relocators. Last month it emerged that Manchester City Council is selling half the 10.5-acre development site at the former Central Retail Park in Ancoats to the Government Property Agency. That could provide space for about 4,000 civil servants. Any day now we’re expecting an invitation to tender for construction of the new Darlington Economic Campus off Brunswick Street. Teams from half a dozen ministries will relocate and by October 2024 work should be underway building a base for 1,400 civil servants. The campus springs from an 85,000 sq ft development acquired from McLaren Group (see Elevator Pitch below). Subplot couldn’t find it yet on the official website, but keep your eyes open.

London weighting

The context is that the vast bulk of senior civil service jobs – and one in five of all government jobs – are in London. Include the South East’s numbers, and it’s nearly a third. In contrast, the North West gets 13% (second after London, with a slightly better-than-average headcount of more senior people), Yorkshire 8% (but fewer senior folk), and the North East worst of all at 7% (barely any senior people), or so the Institute for Government says.

Not worth it

Is relocating civil service jobs going to do much for local economies? The government thinks every thousand jobs relocated to Darlington (for example) yields wider economic benefits of about £30m (see para 35 of the select committee report). Curiously, that averages £30,000 per head, which just happens to be about the median salary for regional civil servants in the lower grades that dominate its headcount. So not much of a multiplier effect.

Even less worth it

But even this might be too generous. The parliamentary select committee which looked into this over the summer concluded estimates were a bit toppy because the civil servants employed in Darlington mostly wouldn’t live there, so they would be spending more diffusely over the region, meaning a very small effect gets even smaller. The butter would be spread thin.

Not what you think

Moreover, these aren’t relocations. The select committee said that because the government wasn’t actually moving jobs – just creating new vacancies locally – the effect could be to leave the civil service more, rather than less, biased towards London. The committee also wanted to see a rationale and economic case – there isn’t one – and noted that closing smaller regional hubs to create bigger centralised ones might do more damage than good. Remember, the committee has a Conservative majority. It’s damning and worth a read. The committee analysis follows a cracking analysis by the Institute for Government, published in 2020 when the relocation plan was first announced by then-chancellor Rishi Sunak. This showed economic benefits were small: faint, short-lived tremors, not earthquakes.

So nothing much to get worked up about, unless you are the lucky contractors involved in building either the Darlington or Manchester campuses, and their lucky consultants.

ELEVATOR PITCH

Going up, or going down? This week’s movers

Some good vibes for Blackpool, which deserves a break, and also for the York Central site, which hasn’t yet rewarded local politicians enormous faith in its potential. Doors closing, going up.

Blackpool

Blackpool is on the road to literally nowhere, except perhaps Fleetwood, which makes any effort to inject economic life into the place especially fraught. When things begin to look up, generous credit is therefore due.

Work is about to start on converting an old town centre block into The Edge, a £7.5m co-working and start-up hub. The scheme is being delivered by Blackpool Council, as part of its successful £39.5m bid to the Government’s Town Deal programme.

Down the road, work is progressing on a data centre cluster at the 20-acre Silicon Sands, a great name for an interesting idea. Data centres are not big employers, usually, but all welcome and if the council can make something of it as an anchor occupant, full marks.

In the background, work continues on Muse’s 215,000 sq ft town centre office scheme, which is underpinned by a mega letting to the Ministry of Defence and the Department for Work and Pensions.

Nobody (yet) is claiming any of this is transformational, but it is easily worth at least two cheers, possibly two-and-a-half.

Path dependency

Twenty years ago City of York Council agreed its big-picture thoughts about the triangle of railway land it calls York Central. It’s a jolly read, explaining how the site’s 70-80 developable acres solved the problem of a tightly constrained city centre: York Central was going to provide a new cultural hub, a central business district, and much else. No mention of free unicorns for everyone, but you got the feeling they weren’t off the agenda.

It took until page 15 to note that York Central was, actually, a total mare. “Although the site is adjacent to the city centre area – apart from one road through the site Leeman Road – the main part of the site is essentially locked off from the rest of the city and Holgate Park… These are barriers into the site.”

But by page 23 this had turned into a site with “unique locational advantages,” an that idea took very deep root (if you have time, Google “path dependency”). This explains a slo-mo shower of enterprise zones and development plans, all tugging away at the same idea.

Things changed in 2020 when the chancellor’s Budget allocated around half of the £155m needed to open up the site, provide some new bridges and an access route. John Sisk & Co was awarded a contract for three years of infrastructure work in July 2022. The initial clearance of trees and a few unwanted buildings has begun.

Now, the £1.1bn never-say-die project has taken another step forward towards the promised 1m sq ft of commercial space and 2,500 homes.

Homes England and Network Rail have selected McLaren Property and Arlington Real Estate as the preferred developer. The pair have already bagged a former BMW dealership near Manchester Royal Infirmary for 1,100 student beds and 470,000 sq ft of life science floorspace. There’s no word in the official release on the developers’ timeline, which is probably just as well.