The northern England railway town of Darlington has emerged as the most likely location for the Treasury’s new economic campus, despite a last-ditch attempt by senior civil servants to locate the project in a city.
Chancellor Rishi Sunak, who will make a final decision this weekend, is under pressure from numerous ministers — including Cabinet Office minister Michael Gove and international trade secretary Liz Truss — to plump for Darlington on Teesside.
They believe this would be a totemic symbol of prime minister Boris Johnson’s pledge to use the levers of government to improve the economies of England’s towns through a “levelling up” agenda. Darlington returned a Tory MP at the 2019 election for the first time in decades.
But permanent secretaries, the most senior civil servants, are urging the chancellor to opt for a larger northern city, such as Leeds or Newcastle, with closer ties to universities, according to Whitehall officials.
Sunak will announce the location of Treasury North in next week’s Budget. It will take five years to set up and initially house 750 officials — 400 from the Treasury and the rest from other ministries including the business and trade departments.
According to individuals with knowledge of the discussions, Sunak’s shortlist for the campus has narrowed to Darlington, Newcastle, Leeds, and Bradford in West Yorkshire.
One government insider said: “Ministers are very keen for departments not to move to the big cities. We are the people’s government, so we have to move government closer to the people in communities that have been overlooked and undervalued in the past.”
Ministers believe that youthful civil servants should capitalise on the advantages of living so far out of London, including cheap house prices. They believe civil servants are trying to build up “London-like metropolitan clusters” in major cities rather than helping left-behind towns.
Ben Houchen, the Tory mayor of Tees Valley — who is standing for re-election on May 6 — said Sunak was being pressed by civil servants to “swap one metropolitan city for another”. He warned that the government “might as well not bother” opening the campus if Treasury North ultimately goes to a city such as Newcastle or Leeds.
“Rishi understands that we need to start delivering in areas like mine and what better way to show real levelling up than by bringing this to Darlington,” he told the Financial Times.
Whitehall’s most senior officials agreed at a recent meeting that new government operations should be based in large regional cities, with large pools of local talent and close to good schools and universities, according to two government sources. Darlington was not specifically discussed.
One person briefed on the meeting said: “They agreed that Manchester would be ideal but also places like Leeds or Newcastle.” Property advisers are also said to have issued the same advice.
They argued that Darlington lacked the infrastructure, and skilled workers, to support 750 civil servants. But officials fear that Sunak will put politics first in choosing the location.
Officials said they had conducted a thorough analysis of recruitment, retention and sustainability for each location and concluded all four were viable.
Ultimately the mandarins accept this is a decision for ministers, but want to ensure that Sunak and other cabinet members are aware of their reservations. “There will be a paper trail,” said one civil servant, noting that the plans would be scrutinised by the National Audit Office.
When asked about the dispute, one government insider pointed to a clip of Yes Minister, the BBC satire of the civil service, where officials resisted moving government personnel to the north of England due to its distance from Harrods and London’s social scene.
As well as Treasury North, Sunak will next week announce locations for the first wave of free ports, which will give at least seven English locations tax breaks and relaxed planning controls.
The chancellor will also use his March 3 Budget to announce the location in northern England for Britain’s new infrastructure investment bank.
Meanwhile, the Treasury is also finalising £180m of funding for new “carbon capture and storage” schemes in far-flung sites, which will capture CO2 emissions to tackle climate change, including Net Zero Teesside and Zero Carbon Humber.
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