The 2025 Spending Review reaffirmed the government’s Plan for Change, which aims to fundamentally reshape the Civil Service’s property footprint by relocating roles from London to regional hubs. The Review confirmed that by 2030, the number of civil servants based in London will be reduced by 12,000. The Government Property Agency has previously stated that this relocation strategy could release approximately 3.3 million sq ft of space in London by that time. According to government estimates, the move could save taxpayers £94 million annually by 2032 and generate £729 million in local economic benefits for regional communities between 2024 and 2030.
Areas set to benefit include Birmingham, Leeds, Cardiff, Glasgow, Newcastle and Tyneside, Sheffield, Bristol, Edinburgh, and York. Additionally, the government announced plans to establish three new regional campuses. One will be in Manchester, focused on digital innovation and AI. Manchester already hosts the second headquarters of the Department for Science, Innovation and Technology, the Department for Digital, Culture, Media and Sport, and a major Government Communications Headquarters base. The new campus aims to build on the city’s status as a global digital hub. A second campus will be located in Aberdeen, home to the Department for Energy Security and Net Zero’s second headquarters and the new headquarters of Great British Energy, with a focus on energy. The third location is yet to be confirmed.
It’s important to note that the shift of public sector roles to regional markets began before the current government took office. The previous government had similar plans under their ‘Places for Growth’ programme, which aimed to relocate civil service roles to established regional hubs. Our National Office Moves 2025 analysis found that this initiative had already driven expansion within departments such as HM Courts and Tribunals Service in Leeds and the UK Space Agency in the South East. It also saw Ofcom open a new digital and technology hub in Manchester, located near the government’s planned digital campus. These moves reflect a broader strategy to stimulate economic activity in regional cities and tap into more diverse local talent pools. While not part of the Civil Service, several public institutions, including the Bank of England and the National Wealth Fund in Leeds, have also expanded in regional markets, following a similar rationale.
These plans are poised to have a significant impact on the regional office market. Following a sharp post-pandemic rebound in 2021 and a peak in 2022, annual take-up in the Big Five regions (Birmingham, Bristol, Edinburgh, Leeds, and Manchester) has decreased but remained above 300,000 sq ft through 2023 and 2024. In Q1 2025, take-up reached approximately 161,400 sq ft, which already reflects 50% of the 2021–2024 annual average. If this momentum continues throughout the year, 2025 could mark a post-Covid high for the sector.
The Wider Impacts
These requirements highlight the boost to office demand in core regional markets. Beyond this, a government presence can have a wider multiplier effect, stimulating local spending and driving investment in public infrastructure and the public realm. When civil service roles are relocated to city centres, local councils and developers may respond by enhancing the surrounding area to attract workers and visitors. This, in turn, can potentially lift property values and support mixed-use placemaking, integrating retail and leisure into business districts. Such improvements elevate the overall quality and appeal of the office environment, making it more attractive to private sector occupiers. Additionally, the relocation of certain public sector bodies may encourage clustering, with private firms choosing to locate nearby to benefit from proximity and alignment.
Another way in which Civil Service relocation is influencing regional office markets is through increased pre-letting activity. Civil service branches have already driven significant demand in regional markets via major pre-lets. Notable examples include the Department for Work and Pensions pre-letting 173,000 sq ft at 1 Pilgrim Place in Newcastle; 110,000 sq ft pre-let at Brunswick Street in Darlington, forming part of the Darlington Economic Campus; and the Government Property Agency pre-letting 130,900 sq ft at First Street in Manchester to accommodate a range of civil service departments.
This trend of civil service pre-letting contrasts with the broader regional market, where pre-letting activity has historically been limited. For most occupiers, committing to a major pre-let carries additional risks, including shifts in the business environment, evolving workforce needs, and potential construction delays. In contrast, the public sector is typically less exposed to such volatility and often requires long-term, secure office space to accommodate a workforce with clearly defined roles and functions.
Additionally, a core objective of the Government Property Strategy is to deliver a ‘Smaller, Better, and Greener Estate.’ The ‘greener’ element aims to improve energy efficiency across the estate, with new acquisitions required to meet a minimum EPC rating of B. Newly built or refurbished office space is more likely to meet these energy efficiency standards and broader sustainability criteria. Therefore, pre-letting new developments enable the civil service to minimise risk, ensure value for money, and meet its energy efficiency targets in line with the Government Property Strategy. As part of the Spending Review, the government reinforced its commitment to sustainability when announcing plans to dispose of £1 billion of unused real estate by 2030 and investing these receipts in improving the condition and sustainability of what property it retains.
While Civil Service pre-letting activity typically involves full occupation of a new development, the prospect of public sector-led demand can also help unlock speculative development, easing the current undersupply of newly built or refurbished stock in regional markets. Although the benefits of clustering near public sector offices are unlikely to be sufficient on their own to trigger speculative development, increased competition for the limited supply of available office space could drive rents higher. This, in turn, may improve the financial viability of new schemes and encourage developers that hold planning consent on schemes to ‘press go’ on construction.
Looking Ahead
The government’s ‘Plan for Change’ will undoubtedly have a positive impact on the regional office market. However, the scale of that impact remains uncertain, with several factors potentially accelerating or limiting growth. One key variable is the Civil Service’s approach to hybrid working. Currently, staff are expected to be in the office 60% of the time, but there has been resistance to such policies. Where the civil service ultimately lands on this issue will influence the amount of space required upon relocation to the regions.
At the same time, it is unclear whether current office requirements reflect the full extent of the government’s Civil Service cost-cutting measures. Chancellor Rachel Reeves had previously committed to reducing running costs by 15%, while separately expressing confidence that the workforce could be reduced by 10,000 roles. Whilst no specific cuts to headcounts were announced in the Spending Review, any future reductions would in turn reduce overall space requirements, potentially limiting the scale of demand generated by relocations.
Despite these uncertainties, the relocation of Civil Service roles represents a significant source of demand, investment, and regeneration across the UK’s regional office markets.
