A Strong Voice for Croydon Central - Gavin Barwell MP
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Relocating Government jobs to Croydon
10/05/2011 07:10:00

As regular readers of this blog will know, I have been making the case in Parliament as well as lobbying behind the scenes for the relocation of part of the central government estate from expensive SW1 to Croydon. It's a win-win - the Government is looking for ways to save money without cutting frontline services and rateable values are 60 per cent lower in Croydon than in SW1; we are looking to boost our local economy and find anchor tenants for key regeneration projects.

Having raised the issue at Prime Minister's Questions before Easter, today I joined a delegation made up of the Mayor of London Boris Johnson and his officials (isn't it great to have a Mayor of London who supports outer London in this way?), the Leader of Croydon Council Mike Fisher and the Council Chief Executive Jon Rouse to meet with Francis Maude, the Cabinet Minister in charge of making savings in government accommodation costs.

It was an encouraging meeting. The Government clearly has work still to do to identify how many civil servants need to be based in central London and to identify when there are break clauses in buildings it is leasing or if there are no break clauses in the near future whether it would be able to sub-let. But we were left in no doubt that the previous Government’s policy of trying to relocate part of the estate to other parts of the country has sensibly been abandoned (it often costs more money than it saves because of relocation and redundancy costs); that the new government is focused on locations in outer London and the near South East and that our excellent transport links, relatively low rateable values and balanced economy makes us one of the front runners. We were given a link at official level to take things forward so watch this space.

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Readers' Comments

On 13/05/2011 09:01:00 Croydonsfuture wrote:
Your efforts to create new jobs in Croydon are to be commended. In my humble opinion however, I fear that attracting public sector jobs from central London will prove difficult for the reasons set out below.

The background is that Croydon’s historic job creation record has been poor. However, in the past, the buoyant London economy provided jobs for Croydonians willing to commute. But London’s current subdued job market makes commuting far less of an option than it was in the past. Worryingly, in recent years, Croydon has become very dependent on the public sector – which is undergoing a real employment squeeze. In Croydon, we’ve already seen 760 jobs losses at the UK Border Agency (“UKBA”) and 310 at the Council. Also, Croydon seems committed to a big population increase – at least 45,000 new residents (per Croydon’s planning department) in the next 20 years, possibly many more given the spate of residential skyscrapers that are planned. Given this background, your focus on job creation is both timely and wise.

The recent independent Centre for Cities assessment of Croydon’s employment prospects is brutally frank. This study forecasts that almost 10% of existing public sector jobs in Croydon may be lost. Croydon is especially vulnerable given its current reliance on the Council and the UKBA – two organisations that are undergoing a real squeeze. Alas, much of the job loss predicted by the Centre for Cities has already crystallised given the recent announcements from the UKBA and Council.

But is there an opportunity to attract new public sector jobs from central London? The honest observation is that the overall public sector workforce is contracting as the budget savings bite. In an environment where the overall workforce is shrinking, relocating staff to a new location is difficult. What tends to happen - certainly for bigger departments - is that operations are focused in a smaller number of the most cost efficient existing locations. Also, the Centre for Cities report makes the good point that even if Croydon can persuade government departments to relocate from central London, the local employment benefit will be slow to emerge if most of the existing staff choose to transfer.

The UKBA provides a good case study of some of the issues outlined above. The UKBA is undergoing a big contraction in its overall headcount of 23,000 staff. As well as its large Croydon operation, it also has large centres in Sheffield and Liverpool. These cities will almost certainly argue that their economic needs are greater than the relatively prosperous south-east of England. Also, taking a long term view, the UKBA will argue that basing the great bulk of operations in Sheffield and Liverpool will almost certainly be cheaper than maintaining a sizeable Croydon presence.

There are also a number of policy hurdles that militate against relocations to Croydon. A government report - the Lyons Review - recommended that the regions should receive priority for government departments relocating from central London. Also, the following quote from the Cabinet Office’s website regarding the government’s estate pulls no punches: "Moving organisations out of expensive property in London and the South East will save money in the long term and provide huge efficiencies."

So, what to do? In my humble opinion, an important part of the strategy should be to retain the employment that Croydon already has. In particular, although it’s not an action that garners huge PR kudos, it’s important to lobby the UKBA to maintain the relative size of Croydon compared to its Sheffield and Liverpool cousins. This focus on preserving what we have also applies to Croydon’s largest private sector employer – Nestle.

Maintaining the employment Croydon already has is a crucial, but essentially a defensive action. In my humble opinion, the best offensive action would be to put a high emphasis on securing Enterprise Zone (“EZ”) status. The discounts on business rates that EZ status provides would be a powerful incentive in persuading new private sector companies to relocate to Croydon.

In conclusion, it’s to your credit that you have focused on jobs as being a key issue. Every Croydonian is agreed that we need to prioritise job creation in this age of austerity.

On 15/05/2011 07:36:00 Gavin Barwell wrote:
Three quick responses.

As I tried to make clear in the original post, the new Government has ditched the Lyons review's suggestion of relocation to other parts of the country. Redundancy and relocation costs mean it ends up costing more at least as first and rateable values in Croydon are no higher than in most northern cities.

You are absolutely right about Enterprise Zones and I am lobbying for one (see other posts).

You are also right that there won't be lots of extra jobs at least at first - one of the benefits of Croydon from the Government's point of view is that the vast majority of their existing employees would be able to commute here so redundancy and relocation costs would be very low. But it would bring money into our local economy, anchor tenants to some of our key regeneration projects and in the long term there would be a jobs boost.




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