Tom Riordan is an English civil servant. He has been Chief Executive of Leeds City Council since August 2010. Tom Riordan moved to Leeds in 1997 and helped set up Yorkshire Forward, the regional development agency for Yorkshire and Humber, becoming its chief executive in 2006.
This interview was conducted on 15 September 2022.
Q: Could you tell us about your role in growth and regional policy over the past few decades?
I was in regional growth for 13 years, setting up Yorkshire Forward, one of the Regional Development Agencies under the Labour government. I went from being the Strategy Director to the Chief Executive. I was dealing with economic strategy and the devolved ‘single pot’ investments of that government: basically, regeneration across Yorkshire. Yorkshire Forward did lots of things, ranging from the Advanced Manufacturing Park in Sheffield to running business support services and the regeneration of towns and cities across Yorkshire; to doing some emergency work like foot and mouth and flooding as well.
Then I moved to Leeds City Council and have been the Chief Executive for 12 years with a local economic development role dealing with investment into the city (a £12 billion programme of investment). We’re about two thirds of the way through and that’s transformed the city centre, led to lots of economic development in the city, a large increase in inward investment, foreign direct investment, etc.
I’ve also had roles with national policymakers. I had the lead role with the Treasury during the period of the RDAs for a decade and have liaised with the Treasury, BEIS, Number 10 and others throughout the last 20 years in the formulation of economic policy and its execution.
Q: Looking back over that period, what is your overall assessment of efforts to improve regional local economic performance?
It’s the macroeconomic position versus the microeconomic position: the regional stuff probably falls into the ‘micro’ intervention. The stable macro position helps enormously in navigating what happens in reality and is executed at that micro level. That is a fundamental point I would make. The fact that I’ve been here for 12 years means investors, property developers, businesses know what to expect from Leeds. They get used to dealing with a predictable, business-friendly response. They know that there are active programmes of skills development; housing being built; all of those things. Stability and predictability about the macro and the micro level is quite important context.
This desire for stability has been a success at a local level and a frustration at a national level. It was a success for a long period from the late 90s but, as we’ve all seen, has been more challenging over the last five years. That’s a strong point. One of the big messages back from business has been that lack of predictability.
The big success in regeneration terms and innovation terms was having a significant flexible resource that was able to deliver a long-term strategy – the single pot of the RDA. That led to things like the Advanced Manufacturing Park in Sheffield, which brought together academic strength based on the specific asset of a place (out of the steel industry). Metal-cutting techniques in the aerospace and automotive industry was something that Boeing and McLaren and Rolls Royce were really interested in. That led to the Advanced Manufacturing Park. That would not have happened without the RDA single pot, because we had to take a bit of a bet and a leap of faith on a group of people and a group of organisations that Whitehall would not have done. I’m very much convinced of that, so that is a big success. Also, the regeneration programmes in city and town centres, some of the market town and rural stuff that we did, backed up, again, alongside a long-term strategy linked in with local government, has been the thing that’s been successful.
In terms of failures, I think business support over the years has been a failure. Trying to replicate the specialist advice that businesses need from the public sector has been a weakness, and Business Link didn’t really work. I think the business support that’s in place now doesn’t always work. I think it’s captured by the big companies who want a level playing field on sectoral interventions but it doesn’t really work in terms of place-based stuff that I mentioned. I would say that’s the weakness and the failure of the last 20 years.
Q: What was regional economic policy trying to achieve when you were at the RDA and how has that changed over the time?
The goal then, coming from the political centre, was about tackling the inequality gap between London and the South East and the rest of the country. It was very much through a ‘GVA’ lens [Gross Value Added], not the easiest thing to communicate and explain. To try and galvanise people a bit more, we pushed the ‘jobs’ issue at that time. The idea of creating new, good jobs in Yorkshire and Humber was a big, galvanising force. For local politicians, it enabled them to talk more easily than the more generic, opaque concept of GVA and productivity. As we moved on, the productivity point became stronger to try and drive those economic strategies and that led to things like the employment and skills frameworks. It led to a bigger focus on infrastructure and innovation.
That stayed as the orthodoxy through until the last few years. The stagnation in job growth can be traced right back to the 2007 financial crash, where people just wanted to keep their jobs and they were willing to take lower wages because of that. Then you had the austerity period and jobs became less of an issue and it became more about productivity – and specific targets around housing and skills – but was less focused.
Q: Has London been a help or a hindrance to wider regional growth?
I think London’s our greatest strength and our greatest weakness. Having the world financial capital two hours away from your city is something that a lot of cities across the world would kill for.
We did a piece of work with MIT and cities like Sydney, Oslo, and Monterey and others. They played that message back to us very strongly. I think proximity to London is, for a big city like us, a positive element that people forget.
However, the over-dominance of London – if you over obsess about it and put too much of the relative infrastructure investment into it – causes a big problem. That’s been our biggest problem in Leeds and in West Yorkshire: we just haven’t had that infrastructure investment, the transport investment that’s so necessary. That’s where we’ve fallen back the most in productivity terms.
Q: What are the things that you think that make the biggest difference in terms of boosting regional local growth and closing divides?
If you take what’s happened in Leeds, we have achieved what I’d call ‘unsubsidised growth’. If you can get your act together and if you can get a very strong partnership with public and private sector and give investors confidence, even a city in the North is capable of good economic growth and sustainability. We’ve had stable leadership; an active local council that has intervened in the local property market to make things happen, in regenerating our city; a planning system, and a housing and planning strategy, that we’ve agreed and delivered on. We’ve been in the top three for housing delivery in the last five years. And partnership: a self-starting private sector; very strong universities – we’ve now got six universities, very well led, very aligned with what we’re trying to do. When you get all of that right, it can work.
However, we haven’t had the productivity improvement. We’ve had increases in inequality in the city. I think that is down to austerity, infrastructure and skills. Infrastructure and skills investment is still very much skewed to London and the South East. I would throw in research and development which is still very much skewed to London and the South East. It should be linked much more – as it is in Germany with the Fraunhofer’s approach – to regional universities.
Q: How about your production of and retention of graduate and non-graduate skills?
We’ve turned a brain drain into a brain gain in the last 10 years: we have more graduates coming out of university and staying here in net terms than there were 10 years ago. Again, that’s about having a long-term vision for a place, somewhere where people like to live and know they’re going to get a job but also be part of something bigger in terms of the North. Leeds and Manchester have managed to achieve that, I would say, over the last 10 years in a way that many other places haven’t.
Q: How do you think about cities, towns, and the wider region? What’s important in terms of driving growth – is it all about cities?
Definitely not. You’ve got to have a strong city at the core of an economy to be successful. If you don’t have that, you get even more stagnation. In our case, I think Leeds has done really well, but we haven’t had that spreading out to as many places as possible mainly because of a lack of transport investment. There are opportunities for us in West Yorkshire to learn from what’s worked well – like the links between Leeds and Wakefield which have been a deliberate strategy –and try to spread those benefits more widely. This regional dimension is really important for labour markets, for housing markets, for the depth and strength of skills, the quality-of-life issues that we have in Yorkshire. In our region it’s as important for Leeds that we have a relationship with Harrogate and York, as it is that we have a relationship with Bradford and Wakefield and Huddersfield. The challenge is adapting the administrative and political challenges and boundaries to an economy and a housing and skills labour market that makes sense.
Q: What’s your assessment of the RDAs?
Overall, they were a success. Research showed four times the economic benefit for every pound invested. There were two big Achilles’ heels in the RDA model. One was accountability: so long as they had a lot of money given to them by the national ministers – for which they were accountable to parliament – they were inevitably going to be drawn to the centre, despite the best efforts of people running them. Second, although the RDAs were set up to reduce regional inequality, the budget of the London Development Agency was bigger than many of the Northern RDAs. The further away you got from London, the more necessary and RDA was.
I think the best thing we could have done was to have kept the Northern RDAs, stuck a mayor on top of them, and carried on. In our part of the world, in Yorkshire and the North East, that would have worked pretty well – if you’d have had a strong link into the council leaders and you’d have had a unitary local government in place which is now coming, so you’ve only got 13 councils, not 22. It’s perfectly possible to do that in our part of the world.
Q: How is the model that you have put in place in West Yorkshire different from the Manchester model?
Greater Manchester do brilliant stuff. They have done amazing regeneration and they are building an amazing track record in terms of what they’ve achieved in positioning Manchester. But our economic geography is different – less urbanised, more green space. I think what we’ve got is sustainable, a bit less GVA-focused. Our strategy is more balanced between the housing that we’re developing. It’s a much more federal model that tries to play to the stronger local nature of our economy and the more polycentric nature of the Yorkshire economy.
Q: So it’s not about the model, it’s about the strategy?
It is. The regional agenda can make a big difference to soft power, to transport and skills investment. But the real test, when the rubber hits the road, is the local area. That local bit is most important. My lesson from my last 25 years is that the region is really important, but it’s not as important as the local.
Q: If you look over the other side of the Pennines at places like Burnley or Blackburn – which could be considered part of the Greater Manchester economy and used to be part of the North West RDA – they are now outside of any regional structure. What’s the solution for them?
The RDAs were criticised by everybody for favouring everyone else. When that happens, you usually know are getting the balance about right, but you don’t win many friends.
If we’d have had another ten years of people like me going into local government from the RDA and people from local government going into the RDA and having a chance to do what I was lucky enough to be able to do, you’d have forged a greater partnership, connection and skillset. That, I think, would have made a big difference. Arguably in Scotland, that’s happened over a longer period.
Did we support towns as much as we should have done? I think in monetary terms, we did (when you look at the money that actually went in). It’s back to the question of local partners’ capability and ability to get things done. It also comes back to accountability: it’s up to the people that are elected to do it. You’ve got to let that happen.
I do think there has been a bit of a snobbishness to economic development, over the years. We didn’t pay enough attention to retail and to what’s really happening in communities on the ground. For instance, could you intervene and make it easier for a credit union to get money to people quicker than a payday lender? That would be important to help people in an area like Blackburn or Burnley or Stoke.
I also support the idea of growth champions. I think there are examples of companies that if you work with them and support them and get them hiring in local areas, then they become of local strategic importance, if not national. The example I always used was, if you said Malton bacon factory employs 1000 people and if that went, then it would be devastating for the Malton and Norton economy up in North Yorkshire. Similarly, BAE Systems over at Brough, Bombardier in Derby, Forgemasters in Sheffield. There are economic assets that you need to secure and sustain for longer in certain local areas that could make a big difference.
I don’t think the decline of the coal and steel industry has been managed as effectively as it could have been, because some of that kit is still going to be really useful. For example, in building an energy waste plant in the Skelton Grange area of Leeds at the moment, we’re using the old power station infrastructure and that will lead to a district heating system that’s going to help us decarbonise the city’s energy system.
Q: What was your assessment of the capacity of local government to play the role it needed to play in economic development when you were at the RDA?
It was patchy. The bigger councils had big departments. There were some that really didn’t do much of it at all.
This municipal idea – that if it’s important, then we’ve got to do it as a council – has been difficult to wean places off. They need to understand the role of business, often local businesses. Relationships weren’t always good. There were very different cultures. Our role in the RDA was to try and bridge that gap. We did that in some places, better than others. I think as time went on austerity obliterated much of that. There’s been a hidden impact of austerity, which is a lot of these places just don’t have the teams in place anymore. There’s a real gap, and it’s a problem.
Q: And that’s true even despite the devolution to Combined Authorities?
Yes because that money tends to be a bit sticky and stay at that regional level. In Leeds I’ve always had a ‘key account’ system here. I make sure I know all the business CEOs and they know me. If something happens, I can ring them. They’ll tell me if they’re pitching for international investment and we’ll be alongside them. Not all councils do that. We’ve had the Combined Authority pay for key account managers for all districts in West Yorkshire to replicate that.
Q: The post-2010 Treasury leadership says that it was very hard dealing with Yorkshire compared to Greater Manchester because it was much harder to get a common view from leaders. Would you agree with that?
The key politicians had different views about the mayoral model and Yorkshire is a bit different as it’s polycentric. Although Leeds is strong and important, we wanted to go with the mayoral model and would have moved straight after Greater Manchester, but there were different views in other parts of the region.
The evidence was that that was where the money was going. Government made that much more explicit. They didn’t drive it as strongly at first because it was the coalition. I think if it had been a Conservative government, they would have just legislated, but they didn’t. There was wriggle room and the politicians here took that opportunity.
Q: Is the right approach to allow each area to decide whether to move forward voluntarily, or should devolution be comprehensive even if that means central direction?
Of course, you have accountability and mandate at national level as well. I think the main thing that the national government should do is bring is clarity – alignment of policy and industrial strategy and the ability to execute – and then let people get on with it. I think that does drive you to being more emphatic than ‘This is what’s going to happen,’ but then allowing as much flexibility as possible within that framework to let people get on with it.
Q: What was your experience at the RDA, and then at Leeds, in dealing with Westminster and Whitehall. Was there a ‘Whitehall view’?
There is lots of variation. Whitehall is like five-dimensional chess at times. The problem local government has had through the years – the big systemic weakness in the system – is that the triumvirate of the Treasury, BEIS and DLUHC (as they’re now called) have rarely been aligned and had a common view about what should happen. You have to navigate your way around that.
We were usually sponsored by a different department to the one that was most important, the Treasury. I would criticise the Treasury for having an orthodoxy that still doesn’t see places like Leeds in the way that it should, and sees London and the South East as the goose that lays the golden egg. The problem with Whitehall was always that – with both ministers and civil servants, and variation across departments – you had to be pretty opportunistic. To do that, you have to have your politics aligned locally.
Q: Was there a reluctance to let go from the centre?
Completely. I think that is due to the accountability structures, the way that parliament votes its money. Regularity and propriety run through civil servants like a stick of rock: the worst thing that can happen to you is being called to the Public Accounts Committee to explain why some public money that was voted through by Parliament last year has been spent on something completely wrong or completely ineffective. That drives you towards that sense of control. But that’s an illusion of control, because you’re not controlling anything from the centre. People just get on and do things. That’s the thing that really needs to change: that umbilical cord needs to be cut. That’s why devolution matters.
Q: Would more revenue being raised by Combined Authorities, or other local accountable bodies, make a difference to that willingness to let go?
Without a doubt. I’d start by doubling the amount that mayors and local authorities can control themselves. Probably the easiest way would be through a local element of existing income tax. But because you get into all these problems – which tax are you going to use and how are you going to do it? –it’ll take you five years to do anything. I’ve come to a very strong conclusion, that that’s the only way that you will really break it.
Q: Scotland has only recently used its powers to vary income taxes, and Wales hasn’t really asked for the powers. It’s not a common call from mayors or local government leaders to ask for revenue-raising devolution. Why?
I think that’s probably because it’s seen as a new tax. I think we’ve all become a bit infantilised by the current paradigms and ways of working. Without radical change, we risk the break-up of the United Kingdom. The North of England will follow Scotland, Northern Ireland, in the long-term decline of confidence in that sort of democratic structure, in my view, unless we radically change the way we work. Tax devolution has got to be part of it.
Q: What has been your experience with individual Whitehall departments?
I think the Treasury under Gordon Brown got behind this agenda and aligned and delivered on the single pot. The civil servants knew they had to work with the RDAs. In a way, George Osborne continued that work, albeit with the mayoral model and a chilling dose of austerity. Similarly, the Treasury during that period were very aligned and the Northern Powerhouse came out of that.
DLUHC is challenged by having a regulatory role in local government, so it hasn’t promoted the sector within Whitehall enough at times. BEIS (as was) put too much focus on sectors and not enough on place.
Q: Is there any sign on non-schools skills that there’s more willingness to devolve?
I think that’s probably the area where they’re most interested, they’re probably most up for that, I would say.
DWP has probably the most centralist outlook, even though it has a local delivery side. Local relationships tend to be okay. DfT, I think, realises it’s got to do something different, but isn’t clear how to do it. They flirted with regional structures at one point. They got Transport for the North set up and this Northern Acceleration Council, but I don’t think we’ve seen the potential there we could have done. Much of the planning and delivery still feels far too detached from the reality on the ground.
Health again is highly centralist – but they are trying to move to this Integrated Care Structure at the moment which is really subregional. Quite an interesting experiment going on in the NHS, but the tendency to centralise is hard to get away from when it’s so political at a national level.
Q: Are the post-2010 reforms, the move towards elected mayors and combined authorities, a step forward we should build on now?
Yes, I will never complain about devolution. I have big reservations about the boundaries we have in West Yorkshire, but I’m always positive about the work our mayor is doing.
However frustrating it is at times to agree things across West Yorkshire, we work pretty well together. I think that the direction is set. I do appreciate that any change in boundaries cause huge angst and leads to delay – but let’s crack on and just get on with it.
Q: Does it surprise you, given the role you’ve played in your career over these 25 years, that this has been a period in which regional inequality has grown, rather narrowed?
While we’ve had success in Leeds, overall that’s disappointing and there are good reasons.
Look at the transport investment that’s gone in. Everybody knows that transport is one of the key elements of productivity; getting to and from somewhere is part of the cost of doing business and the ability of somebody to get a job or an education opportunity. I would argue that in Leeds it’s a bit of a miracle we’ve done as well as we have. Scotland gets more public spending spent on it per head, yet our performance has not been that different from – and probably a bit better – than Edinburgh and Glasgow.
But in terms of the region, it’s a shame that the work that was started at that regional level was completely dismantled and I think we’ve suffered for that. As I said before, austerity has consequences. The idea that you take more money directly away from the poorest parts of the country and that is not going to feed through into regional inequality is fantasy.
Q: Has there been an international example model which you looked at and thought, ‘this is an inspiration’ for what you’ve been trying to do locally, regionally?
In terms of the model that’s been the inspiration for us here, and that we’re trying to replicate, it’s more Scandi than Yankee: Copenhagen, Oslo, Stockholm. They are much better models for development because they have a strong social and environmental element to their strategy. I think we want that, and that suits a polycentric Northern European economy. We’re not going to dominate like a London or a Paris. We’re better off building somewhere that people want to live in and they can enjoy being a part of. In terms of sectors, probably Boston. I’ve been there and worked with them, on financial services and health tech.
Q: What is the most important lesson to take away for the future?
Having worked in Whitehall myself in the nineties, the closer you are to something happening, the more accountable you are and the better decisions you make. If you aren’t, you know someone’s going to call you out for it. In Whitehall, you can hide. You don’t have to understand the economic geography of the country in the decisions you make. That is why the more we can do regionally and locally, the better we’ll perform.
The other is the alignment of big infrastructure calls that we want to make: HS2, nuclear power, carbon capture, hydrogen and wind power. We’ve got to align our industry and our supply chains and our skills much better. That would be a much more effective way of achieving what we need. In the absence of that, you’re always pushing back against the tide.
ENDS