Should Government Offices Move to the Suburbs?

It's clear that government offices should be located in prime areas of Stockholm.

Sweden doesn't have an Elon Musk slashing state costs, but we do have the National Audit Office, a prudent watchdog with the motto: "We oversee how state funds are used and reported."

In its latest report, the National Audit Office examines government offices. The conclusion: They are too large and too costly. By reducing their square footage and moving to "less central locations," taxpayer money could be saved.

The National Audit Office urges the government to act—state funds should be used as efficiently as possible.

This makes sense, and some agencies might indeed need to reduce their space due to increased remote work since the pandemic.

However, the government shouldn't focus solely on costs. As any homebuyer knows, it's all about location, location, location: the location itself is valuable.

This applies to government offices as well. They must be maintained.

The more efficiently and smartly they operate, the easier and safer life becomes for citizens. How well a tax office functions determines whether it takes minutes to file taxes or weeks due to poor procedures and endless forms.

Many employees refuse to relocate and resign.

But competent agencies require competent employees. To attract the best, the state must compete with the private sector. While salaries might not match, a prime city location can be invaluable.

Unfortunately, parliament and government have often used agencies for other purposes—like "let the whole country live." Until 2020, 46 agencies were relocated across the country. When the National Audit Office evaluated some cases, they found each relocated position cost 1.1 million kronor and productivity declined. They understatedly reflected:

"It can be questioned whether it's reasonable to reduce an agency's operations for several years."

The problem with relocation is that many employees refuse to move and resign. If things go wrong, the agency ends up in a place where it's hard to replace lost expertise.

In the long run, relocation helps regional development "a little," the National Audit Office noted a few years ago. So, much ado about little gain.

In the 2010s, another idea emerged in parliament: Move agencies to the suburbs. Rent is cheaper, jobs are created, and the status of disadvantaged areas is raised.

But regardless of the goals, it's unwise to move agencies from the center. Not primarily because it's more glamorous to work in the city's hustle and bustle, but because the subway and commuter train networks are designed to bring workers into the city—it suits everyone. Moving agency X north of the city, however, makes it less attractive to those living in the south. And vice versa. It becomes harder to find competent staff.

Maintain our agencies. Good institutions distinguish well-ordered countries from banana republics.