Re: Travel expenses
People not claiming back £14,000 per year for travel would not be a terrible thing. Employees pay their travel out of their wages (after they've paid tax too). You can say what you like about sick pay and holiday pay - it's not worth that much.
What will actually happen is those contractors will have to move closer to London as it's not just well paying government work that's centred there.
Now is a great time to hire contractors if you're a private company as supply is about to sky rocket - you should be able to offer lower than usual rates in a month or two ...