How Channel 4’s move to Leeds will benefit the City

Applied Institute for Research in Economics

Dr Michael Reynolds is a Teaching Fellow in Economics. His research interest lies within the areas of microeconomics and industrial economics. Dr Reynolds’ current projects involve using mathematical models to consider issues involving competition, networks and regulation.

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The news that Channel 4 will be moving some of its operations to Leeds has been welcomed by many in the City, with Tom Riordan, chief executive of Leeds City Council, describing it as “the best news” and screenwriter Kay Mellor describing it as a “game changer”. Here I explore some of the factors behind the move and how it will benefit the Leeds economy.

Why Leeds?

There are various ways to measure the boundaries of region. One of the measures used by the Office for National Statistics is the ‘Travel to Work Area’ (TTWA). TTWAs are a broad estimate of the important areas where people work and live. In 2011 (the most recent data collection and analysis of TTWA), the Leeds TTWA was the 11th largest in terms of ‘Economically Active Residents’ (410403) despite only having the 84th largest land area (64675 hectares). Hence, you can see there is a potentially large pool of talent for Channel 4 to pick from within a small area.

Despite these numbers looking quite impressive on their own, you could argue that Leeds has an even larger pool of talent than those estimated by the TTWA. These are a rough estimate and only include sub-regions (called ‘Lower Layer Super Output Areas’) that have more people commuting into Leeds than any other major area. For example, York has its own TTWA and, hence, commuters from York to Leeds are not included in the Leeds TTWA. In addition, Harrogate, Bradford, Halifax, Huddersfield, Barnsley, Wakefield and Castleford, all areas of a ‘commutable distance’ to Leeds, are not included in the Leeds TTWA. The Leeds TTWA has 28.5% of its jobs taken by people outside of the area – Manchester by way of comparison only has 11.2% of jobs taken by people outs the TTWA. Leeds is close to a large population and talent that Channel 4 can take advantage of.

Channel 4 will not only want access to a large employment base, but also media talent. Talent itself should not be the problem – there are now five Universities in Leeds alone without including those in the surrounding area – but London has often been the destination for a lot of media talent. However, this creates something of a ‘selection bias’ in the media where only those (i) already located in London or (ii) those willing to move to London get these ‘creative’ jobs. Diversity is something that has been found to improve decision making. This is important within creative industries too; different types of people lead to new ideas and innovations 

Direct and indirect impacts

Inevitably some of these new jobs will be filled by people moving from other areas of the country. They will bring earnings – and Channel 4 investment - that will inject money into the Leeds economy. New employment opportunities will not just be directly related to Channel 4 as they will also be commissioning work from independent production companies and that will bring new opportunities to the region.  Such work is also not limited to the media industry, as a new building for Channel 4 means more jobs for builders and planners; more employment and people will result in bigger sales in shops. These people will also bring experience and skills, which in turn will help refine the talent already present in Leeds. Large companies have been found to have a positive impact on the management practices of firms that are located close to them and these improved practices can then increase firm productivity.

The Leeds City ‘doughnut of deprivation’ was identified in around 2004 and despite the improvements in Leeds it has persisted. As yet, the precise location of the Channel 4 headquarters has not been revealed. If the investment is wisely targeted then there is a great opportunity for the Channel 4 investment to bring improvements in these areas and to improve the lives of those that need it most. The creation of Media City in Salford was rightly targeted at an area of deprivation, but there have been suspicions about precisely who has benefitted. The Channel 4 investment is not at the same levels of the Media City money, but Leeds should take inspiration from Salford and use the lessons they have learned.

This investment in Leeds also brings a renewed focus on the ‘Northern Powerhouse’ and the efforts to improve rail links between Leeds and Manchester/Salford. Better communication links between the industry in each city has the potential to bring ‘agglomeration effects’ and other positive spin offs from collaboration. 

Efforts should not just rest on improving transport into Leeds, but these extra jobs will also bring with it a need to further improve the infrastructure within Leeds. The reallocation of the £174 million of trolley bus money to improve transport in the City is greatly welcomed. Better transport will help improve everybody’s lives, but also help improve the spread of this investment around Leeds and make sure it reaches the parts that really need it. The Channel 4 investment represents a huge opportunity to improve the Leeds City economy and all those people in it. Let us make sure that opportunity is seized.  

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The views expressed in this article are those of the author and may not reflect the views of Leeds University Business School or the University of Leeds.