Udvalget for Landdistrikter og Øer 2014-15 (1. samling)
ULØ Alm.del Bilag 132
Offentligt
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British experience with the
relocation of public sector jobs
Giulia Faggio
(University of Westminster and LSE)
 ULØ, Alm.del - 2014-15 (1. samling) - Bilag 132: Præsentationer fra høringen den 22/4-15 om udflytning af statslige institutioner og arbejdspladser fra hovedstaden til provinsen
Introduction
 ULØ, Alm.del - 2014-15 (1. samling) - Bilag 132: Præsentationer fra høringen den 22/4-15 om udflytning af statslige institutioner og arbejdspladser fra hovedstaden til provinsen
Relocation programmes are not new
•
Since WWII, the British government has used
relocation programmes of public sector workers
as a tool to boost regional development
•
In recent years, a few cases attracted public
attention:
–
the move of 2,000 BBC jobs (and successful TV
programmes) from London to Salford (Manchester
area)
–
the relocation of the Office for National Statistics
headquarters from London to Newport (Wales)
 ULØ, Alm.del - 2014-15 (1. samling) - Bilag 132: Præsentationer fra høringen den 22/4-15 om udflytning af statslige institutioner og arbejdspladser fra hovedstaden til provinsen
Rationale for these moves
•
Advocates of relocation programmes:
–
relocation programmes = local public investment →
help for lagging regions
•
Opponents’ view:
–
relocation programmes (and the associated
redundancy packages) = waste of taxpayers money
→ no help for lagging regions/possibly detrimental
•
Despite the attention given by the government and the
media, it is not clear whether relocation programmes
are beneficial or detrimental for local development
 ULØ, Alm.del - 2014-15 (1. samling) - Bilag 132: Præsentationer fra høringen den 22/4-15 om udflytning af statslige institutioner og arbejdspladser fra hovedstaden til provinsen
2004 Lyons Review
•
Government-sponsored independent review on the
scope of public sector relocation
•
In 2004, the review proposed the dispersal of 20,000
civil service jobs out of London and the South East to
other UK destinations by 2010
•
Thanks to effective ‘push’ factors (e.g., relocation
targets and property controls), the original target was
delivered a year ahead of schedule
•
By its end, the program relocated around 25,000 jobs
 ULØ, Alm.del - 2014-15 (1. samling) - Bilag 132: Præsentationer fra høringen den 22/4-15 om udflytning af statslige institutioner og arbejdspladser fra hovedstaden til provinsen
Exploring the data
•
Where do these jobs go?
–
Mostly, to urban areas outside London and the South East
•
When?
–
65% of the relocations were completed by Dec-2007 (before
the recession started)
•
What department was involved? How did relocations
vary by department?
–
ONS and HM Revenue and Customs: small and frequent
relocations
–
Ministry of Defence and Home Office: larger and less
frequent relocations
 ULØ, Alm.del - 2014-15 (1. samling) - Bilag 132: Præsentationer fra høringen den 22/4-15 om udflytning af statslige institutioner og arbejdspladser fra hovedstaden til provinsen
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2003-2007 Relocations
Blue dots = job moves
Job moves not
adjusted by size
White areas = rural
Purple areas = urban
 ULØ, Alm.del - 2014-15 (1. samling) - Bilag 132: Præsentationer fra høringen den 22/4-15 om udflytning af statslige institutioner og arbejdspladser fra hovedstaden til provinsen
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Total size and density of relocations
6000
120%
5000
100%
4000
80%
3000
60%
2000
40%
1000
20%
0
2003
2004
2005
Size
2006
2007
2008
2009
2010
Cumulative density
0%
Density
Size
 ULØ, Alm.del - 2014-15 (1. samling) - Bilag 132: Præsentationer fra høringen den 22/4-15 om udflytning af statslige institutioner og arbejdspladser fra hovedstaden til provinsen
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Relocations by Gov. Department
Department Name
Department for Business, Innovation and Skills
Competition Commission
Commission for the Compact
Crown Prosecution Service
Department for Communities and Local Government
Department for Culture, Media and Sport
Department for Children, Schools and Families
Department for Environment, Food and Rural Affairs
Department for International Development
Department for Work and Pensions
Department for Transport
Department of Health
Foreign and Commonwealth Office
HM Revenue and Customs
HM Treasury
Home Office
Ministry of Defence
Ministry of Justice
Office of Fair Trading
Office for National Statistics
Relocation size
Mean
SD
Frequency of
relocations
58
1
6
6
76
42
58
49
39
125
6
53
19
635
10
56
29
58
1
139
13.2
25.0
11.2
7.2
5.2
22.5
26.3
16.1
2.3
33.7
10.3
23.0
24.1
5.7
3.7
54.9
207.6
16.7
3.0
4.3
20.2
0
4.4
8.2
10.7
29.9
37.7
21.4
2.5
75.0
8.3
32.1
14.6
16.0
4.0
89.9
282.3
44.8
0
5.5
 ULØ, Alm.del - 2014-15 (1. samling) - Bilag 132: Præsentationer fra høringen den 22/4-15 om udflytning af statslige institutioner og arbejdspladser fra hovedstaden til provinsen
Policy Evaluation
 ULØ, Alm.del - 2014-15 (1. samling) - Bilag 132: Præsentationer fra høringen den 22/4-15 om udflytning af statslige institutioner og arbejdspladser fra hovedstaden til provinsen
Purpose of my analysis
•
Answering the question: Is a rise in public employment
good or bad for local businesses?
•
Limited evidence of the interaction between public and
private sector employment in a local labour market
•
The arrival of public sector jobs into an area can have
contrasting effects (see Moretti, 2010):
–
Local multiplier effects: higher demand for locally-produced
goods and services
–
Crowding-out/displacement effects: upward pressures on
renting/housing costs lead businesses to move out of an area
 ULØ, Alm.del - 2014-15 (1. samling) - Bilag 132: Præsentationer fra høringen den 22/4-15 om udflytning af statslige institutioner og arbejdspladser fra hovedstaden til provinsen
Two complications
•
The analysis is complicated by two factors:
–
The geographical spread of the policy is unknown
a
priori
–
Locations are not randomly chosen
•
To solve these issues:
–
Looking at effects within the receiving areas and
allowing for potential spillovers in neighbouring
areas
–
Assume the policy impact decreases by distance
 ULØ, Alm.del - 2014-15 (1. samling) - Bilag 132: Præsentationer fra høringen den 22/4-15 om udflytning af statslige institutioner og arbejdspladser fra hovedstaden til provinsen
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Research question
 ULØ, Alm.del - 2014-15 (1. samling) - Bilag 132: Præsentationer fra høringen den 22/4-15 om udflytning af statslige institutioner og arbejdspladser fra hovedstaden til provinsen
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2001 Census Output Areas
 ULØ, Alm.del - 2014-15 (1. samling) - Bilag 132: Præsentationer fra høringen den 22/4-15 om udflytning af statslige institutioner og arbejdspladser fra hovedstaden til provinsen
Results
 ULØ, Alm.del - 2014-15 (1. samling) - Bilag 132: Præsentationer fra høringen den 22/4-15 om udflytning af statslige institutioner og arbejdspladser fra hovedstaden til provinsen
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Impact of public sector relocation on the private sector
Total private
sector
(1)
Receiving OAs
Spill-overs
0-1km
0-2km
0-3km
0.066
(0.026)**
-0.024
(0.007)***
-0.009
(0.006)
√
√
151,074
0.003
(0.013)
-0.008
(0.014)
-0.008
(0.012)
√
√
36,120
0.083
(0.027)***
-0.014
(0.004)***
-0.007
(0.005)
√
√
145,593
0.544
(0.257)**
Manufacturing
(2)
-0.196
(0.114)*
Services
(3)
0.663
(0.256)**
Controls
Pre-trends
Obs.
 ULØ, Alm.del - 2014-15 (1. samling) - Bilag 132: Præsentationer fra høringen den 22/4-15 om udflytning af statslige institutioner og arbejdspladser fra hovedstaden til provinsen
Main results
•
Total private sector employment:
–
Positive effects in receiving OAs:
•
OAs that received relocated jobs: the arrival of 100 public
sector jobs → additional 50 jobs created in the private
sector
–
Some evidence of displacement:
•
OAs further away: Private sector jobs moving out of areas
at 2km distance and moving into areas at 1km distance
•
Manufacturing: weakly negative effect localized in
receiving OAs (20 fewer jobs)
•
Services: positive impact in receiving OAs (70
additional jobs) + displacement
 ULØ, Alm.del - 2014-15 (1. samling) - Bilag 132: Præsentationer fra høringen den 22/4-15 om udflytning af statslige institutioner og arbejdspladser fra hovedstaden til provinsen
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Splitting services by type
Baseline
(1)
Construction
(2)
0.025
(0.017)
-0.001
(0.004)
-0.002
(0.002)
0.000
(0.002)
48,681
Transport
(3)
0.074
(0.112)
0.008
(0.022)
0.002
(0.012)
-0.009
(0.008)
19,222
FIRE &
Business
(4)
0.437
(0.163)***
0.063
(0.022)***
-0.013
(0.006)**
-0.006
(0.005)
76,077
Trade &
Catering
(5)
0.268
(0.114)**
0.056
(0.024)**
-0.011
(0.004)***
-0.004
(0.004)
94,441
Receiving
OAs
Spill-overs
0-1km
0-2km
0.663
(0.256)**
0.083
(0.027)***
-0.014
(0.004)***
-0.007
(0.005)
145,593
0-3km
Obs.
Note: Relocation size measure; All columns include controls and pre-trends.
 ULØ, Alm.del - 2014-15 (1. samling) - Bilag 132: Præsentationer fra høringen den 22/4-15 om udflytning af statslige institutioner og arbejdspladser fra hovedstaden til provinsen
Splitting services
•
When we split services into different sub-sectors:
–
Transport services: no effect
–
Construction: no effect
–
FIRE and Business:
•
Receiving OAs: local multiplier effect (100 public sector jobs → 40
jobs in FIRE and business services)
•
Neighbouring OAs: displacement effects (100 public sector jobs → 6
jobs created at 1km distance; 1 job destroyed at 2km distance)
–
Trade and Catering:
•
Receiving OAs: local multiplier effect (100 public sector jobs → 30
jobs in trade and catering)
•
Neighbouring OAs: displacement effects
 ULØ, Alm.del - 2014-15 (1. samling) - Bilag 132: Præsentationer fra høringen den 22/4-15 om udflytning af statslige institutioner og arbejdspladser fra hovedstaden til provinsen
Conclusions
•
Conducted an ex-post policy evaluation exercise:
–
Looked at the dispersal of 25,000 public sector jobs out of
London and the South East
•
Was the policy beneficial for local labour markets?
–
It raised total private sector employment in the receiving
areas
–
It had, however, little impact on neighbouring areas
–
It changed the sectoral distribution of local employment
towards services and away from manufacturing
•
Was the policy designed to differentially stimulate the
provision of locally-produced goods and services?
–
Probably not, but this is
de facto
what it did