Civil service: job cuts?

More than 27,000 civil service jobs could be relocated out of London under proposals included in a report published on Monday.

Sir Michael Lyons' report - which was commissioned by the Treasury and published two days before the chancellor's Budget statement - also argues that as many as 7,000 jobs could go as a result of efficiency measures. It is estimated that such moves could save £2 billion over the next 15 years.

Gordon Brown has identified 5,000 jobs within his department that could be relocated out of London, while the Department for Work and Pensions comes second with 4,200 jobs identified.

Under the plans, 3,900 jobs at the Ministry of Defence could be moved out of the capital, along with 2,300 from the Home Office, 1,400 from the Department for Constitutional Affairs and 1,100 from the Department of Health.

Education secretary Charles Clarke has identified 800 jobs that could be moved, while other departments have collectively identified a further 2,900.

However, Sir Michael's report also warns that ministers must be prepared to make the investments necessary for such upheaval, with a strongly enforced presumption against London and the south east in any new development and headquarters in the capital drastically "slimmed down".

Government must take overall responsibility for the changes, argued Sir Michael, while there must be greater coordination between departments in their relocation activities.

"I am grateful to departments for their cooperation," he said.

"I believe that a new pattern of government service will contribute significantly to government's policies for the reform of public services, improving regional growth, national competitiveness and devolution.

"Government needs to take firm action to recast the pattern of its business in a way that better meets the needs of the nation in the new century. I am certain that government can meet that challenge."

The proposals have been given cautious backing from the First Division Association, the main union representing civil servants.

"Any proposed moves will need to be very carefully managed to avoid enormous disruption to the lives of individual civil servants and their families," said general secretary Jonathan Baume.

"There is also no excuse for compulsory redundancies at any levels of the service as a consequence of these proposals.

"We welcome the acknowledgement that major dispersals require considerable initial investment, and that any savings will only come in the long term.

"We will work closely with government and individual departments on the detail coming out of the report, but there is a strong case for focusing any proposed moves around the existing Government Offices of the Region network, which can provide structured policy and career hubs in the future."

Other unions were less convinced the overhaul would not hit standards.

Paul Noon, general secretary of Prospect, claimed the initiative would fail if cost-cutting was the sole driving force for change.

"The civil service must be efficient and effective, not just cheap. Joined-up government will take a huge step backwards if staff and functions are dispersed regardless of the consequences," he said.

He also questioned whether local pay bargaining would work.

"Skilled workers will migrate from areas of low pay to those with higher pay - in practice that means London and the south-east. Engineers, scientists and other specialists operate inside a national labour market and will not allow themselves to be marooned in distant, lower paid ghettos. They will simply move out."

Today's report is just the first in a series to examine the future of the civil service.

Sir Peter Gershon, the head of the Office of Government Commerce, is preparing to release a report which will make the case for an 80,000 reduction in the government payroll.

Sir Peter's report will also call for smarter procurement and make the case for a radical overhaul of the civil service machine.

As the government examines ways to get cash into frontline services, the opposition has already signalled that it expects a substantial reduction in the size of Whitehall.

Shadow chancellor Oliver Letwin has said he wants to save £30 billion a year by ridding Whitehall of red tape and unnecessary bureaucracy.