Second-stage relocation of public institutions to begin early without new offices; employees to receive up to 700,000 won more per month

[Financial News] The government plans to finalize the second-stage relocation of public institutions to regional areas by the end of this year. It will hold public discussions to address the various problems that arose during the first-stage relocation. Full-scale relocation will begin next year.
Kim Yun-duk, Minister of Land, Infrastructure and Transport, presented the "Principles and Direction for Promoting the Second-Stage Relocation of Public Institutions to Regional Areas" at Government Complex Seoul on the 3rd.
The government plans to finalize and announce its second-stage relocation plan during the fourth quarter of this year. Since the institutions to be relocated were not specifically identified in the announcement, the list is expected to be released at a later date.
The government said it would pursue the second-stage relocation of public institutions based on five principles.
The central focus of the relocation is to minimize the number of institutions remaining in the Capital Metropolitan Area. The government plans to reconsider from the ground up the criteria for remaining in the area that were applied during the first-stage relocation, and to move to regional areas any public institutions that do not have a special reason—such as national defense or diplomacy—to remain there. The plan reflects criticism that the first-stage relocation had limited success in reversing the concentration of institutions in the Capital Metropolitan Area. Kim emphasized, "Unless an institution must remain, it will in principle be included among those subject to relocation."
The public institutions being relocated will be clustered around existing Innovation Cities. Kim explained, "We will promote relocation centered on existing Innovation Cities to maximize its ripple effects," adding, "We will fully consider the growth engine of the Five Mega-Regions and Three Special Self-Governing Provinces Policy, as well as the functional groupings of existing Innovation Cities." During the first-stage relocation, institutions were distributed across several cities, prompting criticism that coordination among them was difficult. The latest plan is intended to improve efficiency and connectivity by bringing first- and second-stage institutions closer together.
The government also plans to revitalize regional areas by linking local universities with industry. It will expand cooperation among companies, universities, and research organizations around the relocated public institutions, hire talent from the relevant regions, and strengthen partnerships with local universities. Kim explained, "Regional core industries grew around the institutions relocated in the first stage, while positive changes emerged in regional economies, including increased hiring of local talent and higher local tax revenues."
The government plans to expand the self-sufficient functions of Innovation Cities by leveraging the population growth and increased demand resulting from the second-stage relocation. In cooperation with central and local governments, it will build and improve settlement infrastructure—including transportation, education, health care, and culture—to create cities that are good places to live. According to MOLIT, the first-stage relocation was carried out over 14 years, from 2005 to 2019, and involved 150 institutions and more than 50,000 people. Since about 70% of employees at the relocated institutions settled in regional areas with their families and became key contributors to local industries, the government intends to focus on the infrastructure needed to support them. Kim stated, "We will develop Innovation Cities into premier cities worthy of serving as regional growth hubs."
Finally, given that more than seven years elapsed between the announcement of the first-stage plan and the actual relocation, the government intends to move quickly this time. For the second stage, it plans to lease private buildings first and begin full-scale pilot relocations next year. Kim added, "Rather than waiting for new offices to be built as we did during the first-stage relocation, we will use leased private buildings and other facilities to begin pilot relocations immediately next year." He continued, "We will also prepare effective housing support measures to minimize the burden on employees of relocating institutions who must move their homes within a short period."
The government will also strengthen support measures to reduce the burden on employees and encourage them to relocate early with their families. In addition to the relocation allowance paid during the first stage—200,000 won per month for two years—and moving expenses, employees will receive a long-distance relocation allowance based on the distance moved, worth up to 200,000 won per month for two years. An early-relocation allowance, worth up to 500,000 won per month for two years, will also be introduced based on the timing of the move. Excluding the existing allowances, employees can receive up to 700,000 won per month through the new allowances.
Kim said, "Beginning with today’s announcement, we will launch a full-scale public discussion process with local governments, labor groups, and others." He added, "We will listen carefully to a wide range of views from the field and prepare and announce a reasonable relocation plan that everyone can support by the end of this year."
MOLIT has allocated approximately 181 billion won in next year’s budget for the second-stage relocation of public institutions to regional areas. The funds will be provided to institutions that cannot finance the relocation themselves.
[email protected] Reporter Jeong Gyeong-su and Choi Ga-young Reporter