Most graduates now choose not to head for the capital, seeking a better work/life balance close to home or university. Julie Ferry reports

The bright lights of London are failing to attract today's graduates, according to research out today. Seven out of 10 graduates are now choosing to live and work outside the capital.

The bright lights of London are failing to attract today's graduates, according to research out today. Seven out of 10 graduates are now choosing to live and work outside the capital.

The survey by Graduate Prospects, the leading provider of graduate careers information and guidance, shows that more are choosing to stay close to home or their region of study, dispelling the myth that graduates head south.

"London and the South-east have always been magnets for newly qualified graduates, which is not surprising given that it is where many of the blue-chip companies offering fast-track graduate training schemes reside," says Mike Hill, the chief executive of Graduate Prospects. "What is surprising is the extent of the drift away from these traditional graduate employment hotspots, perhaps reflecting the trend towards increased graduate employment in the public sector and small and medium enterprises - both of which have less regional bias."

While London and the South-east remain the most popular destinations, with 17.6 per cent heading for the capital and 12.3 per cent for the South-east, the North-west emerges as the third most-popular destination for graduates, 11.3 per cent finding work in the region.

Hill attributes the North-west's attractiveness to a rise in popularity of public-sector work. "In the North-west, the biggest employer is the public sector, with 19.7 per of graduates in the region working in health and social work, followed by retail at 12.9 per cent and education at 11.8 per cent, indicating that public- sector jobs are more likely to keep students in their region of study."

So why is the public sector luring so many graduates? Contributing to society is very important to this generation of graduates, says Alison Hodgson, who chairs the Association of Graduate Recruiters. "They see training schemes like the NHS leadership graduate programme, which is highly respected, as a great way to fulfil career goals."

Public-sector employers have also got their act together, offering attractive working conditions through comprehensive graduate training programmes. Initiatives like the national graduate development programme for local government, launched in 2002 with the aim of recruiting the senior managers of the future, have paid off. The sector is now seeing a wealth of talent competing for positions that had been hard to fill.

Government policy has also had a considerable effect. Since Labour came to power in 1997, the number of public-sector workers has increased by nearly 600,000. Significantly, the Government has proposed that 20,000 public-sector jobs should be relocated out of London.

However, there hasn't just been a shift in the public sector: commercial organisations have been relocating out of the capital as well, bringing with them more opportunities for graduates. A substantial amount of government funding has been allocated to regional development agencies, which are responsible for sustainable economic growth. Steve Broomhead, the chief executive of the North West Regional Development Agency, says: "One of the goals of the agency is to attract international companies to the region, and we are managing to do that. For example, Bank of New York is moving its corporate headquarters to Manchester. We believe that graduates are playing a much greater part in this development of the regional economy."

Even traditional London-based industries, such as the media, are recognising the benefits of moving more of their operations to the regions. The BBC announced that it is to relocate 1,800 jobs from London to Manchester, with its director general Mark Thompson saying that Manchester would become a "talent hub" for the North.

The report highlights the extent to which graduates choose to remain in their region of study after graduation. About 40 per cent of 2003 graduates stayed close to their university or college, and most regions retained at least half of their student population. Top of the list for regional retention are Northern Ireland and Scotland, which retained 96.9 per cent and 84.8 per cent respectively, followed by the North-west at 66.6 per cent.

Broomhead admits that the agency sets great importance on retaining the knowledge and skills of graduates in the region. It has supported a number of projects, such as Flying Start, which encourages graduate entrepreneurs, to ensure that the area holds on to its talented people.

Personal reasons rank high when graduates are considering where to begin their careers, Hill says. "Student debt and the perceived higher cost of living in London and the South-east may be putting some graduates off making a break from areas where they have established themselves and have support networks."

Hodgson agrees: "Some graduates find that a balance between their personal lives and their careers is very important, and feel that they may be more likely to find that outside London."

Whether it is personal considerations or career opportunities that are having more effect on graduates' location choices, Hill is confident that the shift in thinking is a positive one. "The research suggests that much of the nation's top intellectual talent is now being dispersed across a wider range of businesses and business sectors. This wider distribution of graduates can only be a good thing."

'I'm buying a house, and I can get much more for my money up here'

Danielle Brandreth, 24, is typical of a graduate who's chosen to work outside London. She's an administrative officer in the civil service in Warrington, having graduated from Leeds Metropolitan.

Danielle never considered moving to London because she wanted to stay close to family and friends. The cost of living in the capital also meant that she preferred to stay in the North-west. "I have a really good support network around me here, and that is really important. I am also buying a house, and I can get much more for my money here."

Damien Currie, 24, works as a case worker in the Department of Transport in Leeds. He agrees that living closer to home has its benefits. He also points to the increasing opportunities for graduates in the region. "Manchester certainly rivals London now: there is so much going on there, which gives graduates more options."

However, the Liverpool John Moores graduate wouldn't rule out a move to London in the future. "For me, it wasn't a conscious decision not to go to London. I would be willing to move if that is what the job demanded."