Office Location and the Cost of Maintaining Contact

Abstract

When an office relocates from London, its accommodation costs and salary costs decrease substantially. Some contacts must, however, be maintained with people in the capital, resulting in an increase in travel costs. Those increases are compared with accommodation and salary savings to show that the greatest net saving is usually obtained by a move to a town in the outer South East. Such moves have been very common. Few offices would obtain greater savings by moving to the assisted areas, despite government incentives, which would have to be increased substantially to make those areas attractive. Similarly the replacement of 30% of meetings by cheap teleconferences would not alone persuade many more offices to move there. Policies concerning many aspects of travel and communications would have to be combined before relocation to the assisted areas would be worthwhile for more than a very small minority of offices.