Bob Kerslake was a Civil Servant. Bob’s work began in local government in London, where he became Chief Executive of the London Borough of Hounslow. From 1997 to 2008, he served as Chief Executive of Sheffield City Council. He became Chief Executive of the Homes and Communities Agency in 2008, and Permanent Secretary of the Department for Communities and Local Government in 2010 (serving as Head of the Home Civil Service from 2012). He chaired the UK2070 Commission.
This interview was conducted on 18 July 2022. Bob died in July 2023. We are very grateful for his insights and contribution to the project.
Q: Could you tell us about the roles that you’ve held in growth and regional policy over recent decades?
My career was primarily in local government and then later on in central government – Chief Executive of the London Borough of Hounslow for six years and I then moved to Sheffield in 1997. Both inside London and outside of London – that’s a critical point because it gave me two very different perspectives on the issues.
The job in Sheffield exactly coincided with the arrival of the Labour government. Sheffield had gone through serious financial issues, and the focus was very much on getting that repaired, but we spent a lot of time working through how economic growth could be delivered in the city – how could you turn its fortunes round, because both the city and the council had had a very bumpy ride. I left that role after about 10 years to set up a national agency called the Homes and Communities Agency in 2007. That new agency focused on housing and regeneration. It looked to develop new housing in the South and regenerate projects in the North.
Then the 2010s saw the Coalition government, a fairly determined effort to cut back through the austerity years and a severe reduction in the number of people. Fortunately, the Homes and Communities Agency survived that process, but its regeneration role was significantly cut back. Its focus became very strongly on housing and new housing delivery, but at least it survived to fight another day.
After that, I went on to become Permanent Secretary of the Department of Communities and Local Government (DCLG) around October 2010 and then, just over a year after that, I became Permanent Secretary of DCLG and Head of the Civil Service.
I would say the big themes that I focused on were austerity, the impact of budget reductions, devolution and localism, setting up a new structure following the abolition of the Regional Development Agencies and the creation of the Local Enterprise Partnerships. I stepped down in 2015 from both roles and then went into non-executive roles, chairing the Peabody Trust in London. I became chair of the Independent UK 2070 Commission, which continues.
Q: When you were Permanent Secretary at DCLG, did that include the period when Greg Clark was a minister at DCLG doing the city deals, or was that work happening from the Cabinet Office at that point?
Yes, you’re right to say he formed a team in the Cabinet Office, but the work straddled the two departments I chaired, both DCLG and the Cabinet office. I negotiated some of the city deals on his behalf. I was closely involved in all of them.
Q: Could you give us your headline assessment of what you think were the key successes and frustrations over this period?
On successes, I think it’s been a fragmented story. In the early years the Regional Development Agencies were successes and I think many people would see that. The New Deal for Communities was a very important policy initiative. The restoration of funding during the Blair years was crucially important across a range of public service areas. Without it, I don’t know how Sheffield City Council would have survived. So, there was a period where the uplifted public service investment was crucially important and saw the replacement of infrastructure, additional funding to local government. All of that was during a powerful period.
If I move to the Coalition government, I find it hard – and this is not making a party point – to see how many of the changes really moved the dial. Except perhaps for the introduction of the deal-based model which did at least allow some places to move forward; and I think probably the biggest single success in that context would be the Manchester devolution deal under George Osborne. I think what happened there, if I’m honest, is that George Osborne was a northern-based MP near Manchester and Manchester persuaded him that he wanted something he didn’t know he wanted. That led to the idea of a combined authority mayor and the devolution deal. That was probably the first, maybe the only time, where some of the intrinsic barriers to devolution were overcome. I think that was a success.
I think you have to go forward beyond the area you’re covering, 1979-2015, to see the next one, which would be that white paper – it’s probably the next point at which you see a change in intellectual underpinning. Because Greg Clarke’s was not an intellectual underpinning, it was more about ‘let’s do a deal, let’s see how far we can get’. George Osborne’s was the Northern powerhouse, to wrong foot Labour through a political project. I think you could arguably say that the white paper gives the first – beyond the work we’ve done through the 2070 commission – intellectual underpinnings of a policy to level up.
The failures are well documented in our 2070 report. They include many well-intentioned policies, all of them underpowered, all of them be-devilled by the challenges that any cross government initiative has, which is departmentalism. All of them too short term: RDAs set up, taken away; LEPs set up, now coming to the end of their period. Endless, fragmented funding streams that didn’t align with each other and, all the time, underpinning drivers that were pushing the money in the opposite direction. We have had a regional policy on investment. It’s just been the opposite to what everybody thinks it is. It moved money massively to the South rather than to the North. So quite a lot of policy failures; but at the root of them, in my personal view, was a lack of analysis of the issue. There was no proper in-depth analysis, a lack of clear goals. Two things which historically government are hugely weak at, which is cross-government working and long-term thinking. All those things impacted on progress. If you overlay the impact of austerity, which knocked the stuffing out of local capacity for a lot of places, you can see why we’ve ended up where we are.
There’s nothing wrong with experimentation. You need it. But it has to be within a core intellectual framework: one that explains what you’re trying to do and why; and through strong cross-government leadership. The argument we made in the UK2070 report was that what you needed had to be comprehensive, large scale and long term, and those are really important characteristics of anything that’s going to succeed on this rebalancing regional policy agenda. I’d add that: up until the Osborne push on the Northern Powerhouse, maybe even beyond it, the Treasury were deeply sceptical of the value of regional policy, deeply sceptical. I can remember meetings where they essentially – the most senior person in the department, now you can guess who that is – simply thought it was a waste of time. Didn’t think it would ever have any impact.
Q: Officials we have interviewed suggest that – as New Labour began to increase public spending – the Treasury had to use targets and reporting to ensure value for money. Do you think that’s fair?
The first part is undoubtedly true: new money came in, very welcome money. It allowed big things to happen: the schools programme, the highways programme, some major programmes in Sheffield’s case. It allowed the settling of some major financial pressures, and we lose sight of how effective programmes like Sure Start were. These were basic foundations. I would say it was centralist in its thinking, it was top down, and therefore never quite got embedded in places and probably I think it disempowered places to a degree. I think we got caught up in the targets culture.
The nearest we’ve got to something that might have just about done it was the idea of Local Area Agreements with government, where you were rewarded for the delivery of targets. But even there, you might argue that was a nationally set of targets. Local government basically got rewarded to deliver them, but at least it allowed some local initiative to deliver. Taking the round, I think there was a lot of scepticism of local government. I’ll name names: Tony Blair. I doubt if he ever walked into a town hall. It took a lot of persuading that there was much good in local government. It was always seen as part of the problem rather than part of the solution. The constant desire to move beyond local government, to local level work. I think that undoubtedly is the case.
The RDAs were again set up as separate bodies. There was a good reason for it. They needed to get up and running quickly. You can see why it was done that way, but it crucially, and I think ultimately fatally, meant that many of these new institutions were not owned by local politicians who felt they intruded on their territory. Therefore, when it came to the austerity years, there were very few defenders. Privately, Manchester and others were saying, ‘let’s get rid of them’.
So, it was done in a way that never created that local ownership, local engagement, local empowerment. To that extent, I have some sympathy with Eric Pickles, but some crucial differences. The first is that the solution was to just get rid of them. What was put in place was a pale, pale shadow of what had gone before. I think of Yorkshire Forward. It did huge projects like the Advanced Manufacturing Research Park. There’s no way one council could have done that. You had to put big money in with big risk for a long period. That’s what they were capable of doing. Yes, they started to become too much a creature of central government. For a period, they really did make a difference. On the issue of the period where Eric Pickles is talking about, you’ve got to remember that something like a third of the money came out, as well as all the bodies abolished – you solve the problem by getting rid of the capacity, and then replacing it with something very thin. LEPs were often no more than one or two staff. I don’t think they realised it. I think they thought they’d created an alternative vehicle. It wasn’t at all. So truthfully, for a good period, we had nothing, so there might have been needs locally and lots of blather. But it wasn’t changing the dial at all, and, in fact, places stagnated or went backwards.
Q: Did you think that the RDAs, or Yorkshire forward in South Yorkshire, were effective at doing that brokering?
I think they did in the early years but they started to become, under Peter Mandelson’s time, too centrally driven and uneven. As I said, they didn’t put enough attention into carrying local political leaders with them. I think the LEPs had more variability, more flexibility, at the price of having very little real capacity.
I think they still, even then, prescribed too much. In some places, it’s that easy, and in some places it’s not. I think there was still too much of a sense of: ‘It’s your choice, but you’ve got to do it this way’. I don’t think it genuinely added up to meaningful real devolution of the kind I think we need.
Q: What was your view on the variation in local government capacity and capability when you became Permanent Secretary?
I think the big cities started to get their act together. The core cities group, which I was very involved in, was very strong. You had some quite strong leaders. Albert Bore, Birmingham, Richard Leese, Manchester. I think they got more voice and more impact and more delivery.
In the 10 years I was Chief Executive at Sheffield, we did deliver quite a lot. We were very fortunate. I would say we’ve got two things: public money was available, particularly lottery money; and we had a buoyant economy. It was possible to fuse those two things together and get big things to happen for a period. I think that was powerful. What I think we probably didn’t recognize was that in our desire to advance the city’s agenda very little thought was given to the towns, who resented it. I had to work incredibly hard in South Yorkshire to keep them on side. I’m not sure I always handled it with the greatest sensitivity, but during that period they felt a certain resentment that the cities hadn’t solved all their problems. You can go into bits of Manchester now that are still pretty grim, the same in Sheffield and so on. But the perception out there amongst the other places was: ’It’s all happening in the cities. We’re getting nothing’.
Q: Do you think that was there in the 2000s as well as in the 2010s?
I do. It was there during the Labour government and partly it was because, in a sense, government talks to the people who seem to know what they’re doing and get their act together and can tell good stories. That was typically the cities at that point. Of course, the cities were a strong group. We might have felt we needed more attention. But it’s all relative, isn’t it?
Q: How did you think, at the time, about how you as a local government actor worked with peers, with regions, and worked with national government? How did you balance or prioritise relationship?
It’s tough because you have to function effectively at all those levels. Yet you’ve only got so much leadership capacity. Then you overlay some of the issues I’ve spoken about such as parochialism and resentment. It was hard work for everyone. Manchester, I think probably because it’s a natural conurbation, and had some very astute leaders, made good progress on it. I reckon pretty much every other city region struggled. I think Yorkshire did hold together with an RDA, albeit there were issues. But in Manchester, the RDA constantly chafed against what Greater Manchester wanted to do. Getting these levels right is difficult. Part of the challenge here is: you know that phrase about two bald men fighting over a comb. There was never enough power being distributed to allow people to grow their political leadership and capability. You only have to go to other countries. to look at Spain’s autonomous regions, to know that the regional leaders have huge power. You go to Australia, it’s a model that worked the other way around. It started with the states and moved up to the national government.
When you compare that with a UK that has stayed resolutely centralist, then what you’re arguing about is the scraps that get given out. You can see why it’s proved so difficult to build mature systems. I think we’re getting closer to that now. I think for a range of reasons. I’m a fan of the mayor model. Not everywhere, but in a lot of places, I think they’ve made a real impact. But even there, I think there is still a danger that unless the devolution comes with the institutions, they will struggle and start falling out. They’re going to have almost enough power and capability at all levels. Disempowerment just works upwards when you see it at different levels, from communities feeling disempowered, councils feeling disempowered, subregional structures wondering what they’re for. For regions you’ve got to be very focused on moving the power out alongside the building up of these structures, or they will end up going the way that some previous efforts have seen. I will never forget during the city deal negotiations, I went to something called Wednesday Morning Colleagues – a weekly Whitehall meeting of permanent secretaries. , I did a presentation on the deals. I think it was either the devolution deals or the growth deals. Someone said to me, ‘I don’t mind all these deals, as long as it doesn’t cut across any of my national policies, my national programmes’. I said to him, ‘That’s the point, that’s what they’re meant to do’. So every negotiated model of devolution has founded on the small ‘conservative and the unwillingness to let go of the central apparatus. It’s a long answer, but it’s really important, before we rush to judgement about how well these structures have worked at the different levels, to start with the fact that they’ve just not been given the wherewithal to do the things that they could do.
Q: So there are three potential problems with RDAs: local politics, a lack of formal accountability, and that they didn’t have the right powers and money. Which of those three do you think drove their lack of legitimacy?
I would say the second one, a lack of sufficient engagement and connection. When you set things up as business organisations, some think they should run like a private company, and never mind any of this public sector nonsense. We’ll just do it in a business-like fashion. As they had no politicians involved, they were marginal to the story. Whereas they should be central to the story. The lack of that, I think, undermined their legitimacy.
The second is that they, on occasions, did too much, not too little. They should have trusted local government to do the things it could do, whereas they tried to run the programmes. There was no need for that. They didn’t particularly need big profiles themselves with the community. They needed others to value them. That was the lesson I learned from the HCA: our role was to enable others to do things as far as possible. I think RDAs didn’t quite get that message.
I think the assemblies could have helped, but I don’t personally think they are the critical thing. If you just look London as a comparator, you wouldn’t say the legitimacy of London, or the government, comes from the assembly, would you? It comes from the directly elected Mayor. Ultimately, directly elected mayors are really important, either at subregional level or even regional level, because they are the connected democratic legitimacy not the assembly. It was because of resistance to Mayors, which is still quite deeply ingrained in some parts of certainly Labour’s philosophy. Had we had a mayor for Yorkshire, say, would we have seen the RDAs abolished? Or would you have said that they were politically appointed champions with mandates bigger than many of the MPs?..
Q: The GLA was created or recreated in 1997, why wasn’t a similar move made to recreate the other metropolitan boroughs that had been abolished in 1986?
This goes back to my point about people being given the power to operate at the right level. They did have transport, but even there it was very controlled and weak. In the end, what you do is you squash two levels together. Then they fall out. Truthfully, there was no love lost for the metropolitan boroughs because it was felt they got in the way of the boroughs. Whereas if power has been drawn down to them, as they are trying to do with the Mayors, you might have had a very different story.
There wasn’t any enthusiasm at local level. What you ended up having was almost like a corollary of the LEPs really. You had very weak coordination across the sub-region in South Yorkshire. Yes, the leaders met quite often, still monthly, probably as much as they did when they were a metropolitan council. But it was all lowest common denominator. It was hard to get any strategic vision. Arguments seem to me often to be over fair shares, the point I made earlier about resentment in Sheffield. Rather than lifting it up to a genuine sub-regional vision. I don’t think we were alone in that. Only really Manchester managed to survive the change and keep some level of structure – even they kind of lost it and then grew it again.
Q: Insofar as there’s been progress in the non-Manchester conurbations, is that a function of the Mayoral Combined Authority (MCA) model? Or is it a function of the personalities of the people who have become mayors in that first generation?
I think it’s a function of partly the MCA model. I think the mayoral model is better. It gives you someone who can genuinely straddle areas, and, crucially, national figures. You’ve never had, until recently with Andy Burnham, Andy Street and Ben Houchen, locally based politicians who are nationally known. We haven’t had that almost ever.
There are quite a lot of weaknesses in the MCA model that need addressing. I still think it’s been better than what we had before.
The second thing is, to be honest, that money talks. The deal on offer was sufficiently good to overcome some of the barriers there were. In a world where there’s no money, you are forced to do things you may not ideally want to. There are still people in South Yorkshire who begrudge the fact that there is a mayor, and don’t think it’s worthwhile. There are still leaders who think that. But, they can see that it was the only way to secure new powers and new money. I think that’s been a driver of why they’ve been formed, but I think structurally they’re better as well.
Q: What was your experience of the different parts of Whitehall, and how they reacted to decentralisation and growth policy?
The way that the Civil Service works is that they are pre-eminently upwards managers. Their job, their whole line of sight, is to the minister. Their focus is: we serve the minister. When I say the minister, I mean in their Department. They find it naturally hard to look outwards, either to their colleagues in other Departments or – let’s call it downwards – or to the local level. Any interest they have in that is always calibrated, always secondary, to the line of sight to ministers and their minister, which makes it incredibly hard to move forward on agendas that appear to be taking powers away from their department, from their minister; and incredibly hard to have cross government discussions.
Cabinet committees are notorious for that, for being set up with a wave of enthusiasm and then withering away. The only time you ever break that is when you have a powerful minister who says, ‘I want this’. Osborne, at the point at which the Manchester deal was won, was very powerful. He was alongside the Prime Minister. He literally went into each department and said, ‘I won’t take no for an answer’. Transport absolutely resisted what he wanted. It was screaming and kicking. I think the culture is deeply inimical to devolution. The default is against you, whatever the rhetoric.
I can remember going to Hilary Armstrong and her saying, ‘Challenge us, push us to do more, push us to devolve in these agreements, we want you to challenge us’. You go back and look at the deals, and they are just a pale shadow. Local governments got a bit jaundiced about going in there, and being told, ‘We mean it, really this time’, and then it doesn’t happen. There is no part of central government, except possibly in the part when I was there, or amongst a few now in Department of Levelling Up, Housing and Communities, that really is driven by the importance of devolution. It just isn’t there. I don’t think it will ever be there in central government. It’ll only come through political leadership, very powerful sponsored leadership. If you think of what happened in Manchester, it was a combination of George Osborne and a second Permanent Secretary doing the work on his behalf.
Q: Your analysis is that it’s about senior civil servants perceptions of their career path; others would say that there are accounting officer responsibilities.
There are barriers – I had quite a lot of fun and games with the National Audit Office. Talking to them recently, we found a way through, the old ‘follow the pound’ stuff. How do we know the money’s being spent properly? We followed through on all that, and we developed accountability system statements which sounded extraordinary dull but were crucial to enabling devolution to happen in a way that overcame the reservations of accounting officers and the Treasury. There was a way through all of that. Not easy, they’re necessary controls; but doable, manageable, if you have the will to do it and you have sustained powerful leadership and pressure. Anything less and it won’t happen.
Q: David Blunkett was a powerful figure in government with links to Sheffield. When you were in Sheffield, could you influence what was happening in national politics?
At the time David was very helpful. He was the minister for Sheffield. What he did was unpack individual issues for us in Sheffield. He was a powerful minister who could do that at the right moment, rather than a minister who was passionate about devolution. They’re two totally different things. Was it useful for Sheffield to unblock things? Yes. Was he a devolver? No, I don’t think so.
What came subsequently is a model of what was presented as localism and devolution, but actually he removed power from local education authorities. Some would argue that they were the problem not the solution. they were failing children and therefore academies were the way out of that. You needed to break the local power rather than enhance it. You have to have that debate. Education was an example of a department that saw its responsibilities being to the child Therefore it wasn’t about giving power to local government. I would say other departments were pretty problematic. DWP was centralising to its fingertips really. Other departments were passively resistant on what was done. I wouldn’t just single out education myself. As I’ve said, the Treasury were unenthusiastic on all this.
Q: Should combined authorities have a strategic function across its local authorities to drive public service reform? Or should it be doing skills, infrastructure, business support?
I would say the primary focus has been on the economic agenda. Jobs and skills have been important. Unlocking economic development, infrastructure, I would say, is where you can see most has happened. You’re quite right to say the public service bit was there in the negotiation. It helped being the one that they [Greater Manchester] focused on. But could you see that as having moved quite as determinedly as the economic one? I don’t think so. I’m not necessarily sure it lends itself because quite a lot of service issues should be dealt with at the local level. It’s not all of them. You can’t reorganise health through that route, nor hospitals through that route. But I think I would say the economic one is the one that is of primary significance here in relation to that tier myself.
Q: What are the most important lessons for us to take away for the future?
Number one is: have a long-term plan that could straddle more than one government. We’ll see whether Levelling Up straddles the loss of the current Prime Minister. Number two is: absolutely recognise that you need a comprehensive approach that works across government departments, and therefore you need cross government capacity and cross government leadership inside government. Number three is: it does have to involve devolution of powers and finance. Number four is: it needs an outcome-based approach, it needs you to be able to measure progress. The metrics are really important. Number five is: it does require sustained investment, with the same funding. East Germany and West Germany came together because they didn’t get it all right, but they did put serious money into the process over a long period before they started to make an impact. Last point I’d make is: levelling up is essential, it’s not a ‘nice to have one’, it is absolutely essential. It always felt like that to me when I was there. It was slightly humouring the politicians, but actually its essential. I think the UK2070 commission, and indeed Andy Haldane’s report, which I called the Levelling Up White Paper, have shown that this is an imperative, really, for the UK, if it’s going to raise its prosperity.
ENDS