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The Treasury’s move to Darlington lacks a clear route to succeed

The chancellor may live to regret putting politics first in his choice of location for the new Treasury office

The chancellor may live to regret putting politics first in his choice of location for the new Treasury office, argues Sarah Nickson

In the reported tussle between Conservative red wall MPs and senior officials for the chancellor’s ear, Rishi Sunak has sided with the former and opted to set up a new “Treasury North” campus in Darlington, rather than a larger northern city like Leeds or Newcastle. Four hundred Treasury staff – around a quarter of the whole department – will relocate over five years, along with 350 staff from other departments.

The news will no doubt be welcomed in the Tees Valley. But the choice of a town over a larger city raises questions about potential disruption to the Treasury’s work – and the new office’s prospects beyond the tenure of the current chancellor.

A multi-department campus is a good idea

One welcome aspect of the announcement was confirmation that Treasury staff will be joined by colleagues from other departments, including the Department for Business, Energy and Industrial Strategy, although failing to co-locate it with the new infrastructure investment bank seems a missed opportunity. For many civil servants, particularly the generalists who tend to populate the Treasury, the ability to move between roles and departments and broaden their experience is critical to moving up the career ladder. Providing these opportunities in a single place will help persuade ambitious civil servants that shifting to Darlington is a bet worth taking.

Further, if departments work together to send complementary functions to the new campus, this could help break down the departmental silos that have traditionally hampered efforts to tackle problems that cut across different ministers’ briefs.

The biggest challenge for Treasury will be retaining staff

When the Office for National Statistics shifted its headquarters from London to Newport in south Wales, 90% of London-based staff chose to stay in London and find other jobs. Even a decade after the move commenced, a review found that the resulting disruption continued to hamper the quality of the ONS’ work.

Like ONS staff, most Treasury officials will have plenty of other job options should they weigh up caring responsibilities, children’s schooling, and spouses’ work – or their own careers – and decide to stay in London.

And if they don’t make the move, then what? Darlington has a relatively small labour market, with only around 20,000 people working in managerial and professional roles.[1] By comparison, the greater Newcastle area – one of Darlington’s rumoured rivals for the Treasury post – has around 10 times this number.[2]

Even if the Treasury did fill vacant roles without difficulty, this would still result in significant disruption: research suggests that it takes two years for people to become fully effective in management roles. The civil service itself has estimated that performance peaks between three and five years into a role for senior jobs.[3]

The government – and the Treasury – will need to show this is more than a political stunt

Political factors weighed heavily in the choice of Darlington. The location is next door to the chancellor’s own constituency, while its Conservative mayor faces re-election in May. It also offers a tangible downpayment on a “levelling up” agenda that, until this point, has mostly remained a slogan.

But this office will remain long after that slogan, and maybe this government, moves on. Senior officials will need to convince staff that commitment to the Darlington hub, and a pipeline of high-profile work, will endure and that careers won’t suffer if people make the move out of the capital. They will also need to invest time and attention in making sure Darlington-based employees feel well integrated into the broader department. That includes ministers spending sufficient time there. That won’t be a problem for Sunak, but might prove harder for the rest of his team and his successors.

How well the Treasury executes all of this will determine whether its new office flourishes and improves the department’s overall effectiveness, or whether it muddles along as a forgotten backwater, or worse, instigates an ONS-style exodus.

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