The drive to move out of London is driven largely by talent management and has been the government policy for several years. I know this as I designed the new operating model for one of the largest government departments and that was a constraint on my design. They can't compete with the private sector for wages and benefits, particular due to changes in the pensions which were traditionally very very good. The idea was that by setting up hubs related to locale university, they can offer a wage that is at least moderately competitive for non-London dwellers, hoovering up the talent coming out of uni and giving them a decent career and hoping to keep 25-30% of them for at least a decade.
The problem with that is that if we move to a work from home economy, you can work for city firms from anywhere. All the best talent throughout the country can work for the London financial sector and multi-national firms while having the benefits of cheaper accommodation in other parts of the country. The regional hub systems starts to break down. I mean if you can afford a massive house outside of London working for a blue chip firm why would you live in London?
If work from home is the new norm moving forward in the private sector, it will harm the government talent management strategy, because talent will drift to the better payers even more than today. It might drive public sector wages up to be honest, they'll have to to compete and will probably have to move to WFH as a benefit. They might just outsource even more to be honest and leave it for the private sector to sort out.