Introduction
In March 2020, the government committed to moving 22,000 civil servants out of London by 2030. One of the benefits of moving civil servants out of London are that expenditures can be reduced by renting cheaper office space and fewer civil servants will receive the London weighting allowance.
This allowance was established as compensation for the high cost of living in London, and is therefore an ideal target for saving if the government hopes to bolster regional economies. There has recently been a great deal of discussion as to how civil servants will return to the office, including the idea of three out of five days working from home per week.
Reports suggest that the government is already considering rescinding the London weighting allowance for civil servants working fewer than three days per week in the office. The government has also expressed interest in the idea of moving civil servants out of London in the past. Both of these would be welcome reductions to the cost of the civil service in London.
This paper identifies savings available to taxpayers from moving civil servants out of London. It presents a series of options and costings based on lower office space usage and remuneration of staff due to lower living costs outside of London.
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Key findings
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The government spends a £710 million premium each year to keep civil servants in London. This incorporates the London weighting allowance and higher office costs.
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The majority of this premium is spent on London weighting allowance, which costs £418 million per year.
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The majority of this premium is spent on London weighting allowance, which costs £418 million per year.
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The commitment to move 22,000 civil servants out of London by 2030 will reduce this spending by £153 million, to £557 million.
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Two additional options for savings could also be realised:
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A further 31,196 civil servants can be relocated outside of London, saving £217 million per year – a total of £371 million including the government’s current target.
- A £731 million saving from work from home policies can reduce the total expenditure on London-based civil servants by 60 per cent.
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A further 31,196 civil servants can be relocated outside of London, saving £217 million per year – a total of £371 million including the government’s current target.