London’s Covent Garden is perhaps one of the best early examples of urban renaissance in the country. While its shops, bars and restaurants attract Londoners and tourists in equal measure, it is also home to numerous businesses and organisations including the IPPR and, for the time being at least, the Centre for Cities, an urban research unit that currently works within the well-known think-tank and will this autumn become fully independent.

Launched two years ago using funds from the then science minister, Lord Sainsbury, the centre focuses on how UK cities work and, in particular, the economic drivers behind successful urban change. Policy priorities include transport, housing and labour markets – all of which are key interests for the centre’s director, Dermot Finch, a former civil servant. “We want to know how and why cities perform as they do,” he explains. “Why is Manchester doing relatively well economically and why is Sunderland doing relatively less well? The work we have done over the past couple of years has touched on a whole range of issues from city centre housing markets and why they have revived, through to how we can promote more business development in deprived areas.”

Finch, a Lancastrian by birth, is the fourth of five children and the son of two teachers [“they both told me never to teach!”]. School was a merger of study and his interest in drama and music and this pattern continued during a History and Politics degree at Liverpool University. “I wanted to be a journalist and so avoided doing law or any sort of vocational thing because I was obsessed with the news and current affairs,” he recalls.

“When I was there I kept on with my acting and I remember doing the part of George in Who’s Afraid of Virginia Woolf?, I was a bit young for it really – it’s hard to mimic Richard Burton when you’re 21. I went from Liverpool to do a Masters in Irish Studies at Queen’s University Belfast. When I was there I decided to take the fast-stream examinations for the civil service but at the same time I got down to the last two for a casting job on Coronation Street. I said to myself that whatever job I got, then that’s the direction I’m going to go in. I didn’t get the casting job but I still watch Corrie!”

So Finch joined the civil service, beginning work at the Department for Agriculture in Northern Ireland [“a job which I still can’t quite fathom but anyway”] and spent a year or two there before being transferred to the Treasury in 1994. “I wasn’t an economist but I was a policy person who could work with economists and ministers and pretty quickly I was running a minister’s office,” he explains. “What was brilliant was that it was either side of the 1997 election. For about a year I was running Michael Jack’s office, who was Ken Clarke’s financial secretary, and then Geoffrey Robinson walked in the Saturday after Blair got in. For the next few months I was in the thick of it working on the chancellor’s budget, the windfall tax, setting up welfare-to-work taskforces and re-configuring the PFI.

Asked whether he agrees that a stint in private office is highly recommended, he agrees, adding that there are two periods in a civil servant’s career when it is most beneficial. “There are two stages where it works,” he says. “One is quite early on. If you do it in the first two or three years it gives you lots of networks that you can feed off for the rest of your career. I think everybody does well out of that experience. And later on in your career – say in your mid-30s – it is great to be able to run the secretary of state’s office. But for the most part a one-year/18 month stint in your 20s always works.”

And what about Team Brown? What was it like working alongside people like Ed Balls, Ed Miliband and indeed Brown himself? “It was a revolution at the time. If you think back to 1996 and what government was like then, with a wafer-thin majority and a real sense that that particular administration had run out of ideas, in walks not just a party with an enormous majority but one that has a completely different way of doing things. Geoffrey Robinson walked in and said ‘Call me Geoffrey’.”

Pressed, he concedes that Brown and his key lieutenants did cause some early disquiet. “The manner in which they worked threw quite a lot of civil servants off beam a bit,” he admits. “After 18 years of Conservative administration there was some trust to build up between the civil service and Labour and I think at the time there was an inner circle surrounding Team Brown.”

But, after a period, relations improved dramatically. “I think the new team realised that the Treasury was happy to have a new administration with new ideas,” he says. “People also realised that Gordon was the most important person in government beside the prime minister and the Treasury underwent a period of renewal – it hasn’t always had such clout – and this generated a very unified approach across the department. Every level of official benefited because they went into negotiations with opposite numbers across government and they knew that Gordon would carry the day.”

Finch, however, soon found himself far away from the Whitehall village with what is surely one of the plum postings for any civil servant: the British embassy in Washington. Working as the first secretary for economic affairs – one of two Treasury people stationed there – Finch sought to redefine the position. “The traditional role was to write rather nice telegrams to London saying: ‘The chairman of the Federal Reserve has increased/decreased interest rates’. When I got there people were still doing this but I took it for granted that people could read the internet and pick up what was happening.

Instead I became rather like a journalist for the government. I went into Congress, the Treasury and the White House and found out why policy was being formulated and where it was going to go in the future to get ahead of the curve. The chancellor was interested in a whole raft of other issues like housing and youth volunteering. I got a really great working knowledge of Washington and the financial district of New York but also places like Detroit, Chicago and Seattle as well.”

The pivotal moment during his time in America was, of course, the attacks on September 11, not least because Finch was actually in the World Trade Center when the planes struck the towers. Interestingly this fact emerges only after some probing and Finch, clearly, is not about to play the hero. “I was at a really quite boring economics conference – which I hope doesn’t sound flippant, but it was,” he says. “The conference was taking place in the Marriott Hotel which bridged the two towers and so I was right there in the middle of it when the planes hit. But I got out relatively easily and didn’t undergo anything like the trauma that lots and lots of other people did. But nonetheless I was caught up in it and it was probably more concerning for people who didn’t know where I was for several hours.”

Being there on the day defined his time in the US, he continues. “Without wanting to be corny it forged a really strong link between me and them. The two years after 9/11 were very strange because anybody British in Washington, and especially anybody who had been in New York on September 11, was kind of walking on water. I had to tone it down and often didn’t tell people that I’d been in the Twin Towers that morning because it got a bit embarrassing, but there was an extraordinary sense of engagement that is very hard to describe. It wasn’t particularly comfortable but it was there nonetheless.”

After four years in the US, Finch returned to London. “I didn’t know exactly what I was going to do,” he concedes. “There is always a bit of a trick about getting back into a department when you’ve been away but within a week of me getting back someone forwarded me details of the job at the Centre for Cities. If I’d come back to the UK a month later I wouldn’t have seen it.” A multitude of factors influenced his decision to apply, it transpires.

“I really got to know the whole think-tank scene in Washington and was very taken with the role they play there,” he explains. “I was very close to the Brookings Institution in particular and a guy there called Bruce Katz who runs what is effectively the Centre for Cities in Washington and I regarded him as my mentor. I also saw the way think-tanks in the States re-generate themselves. Because there are clear four-year terms and the top tier of departments are replaced, there is a revolving door between think-tanks and government – far more so than in this country. In the UK people tend to spend time in a think-tank as preparation for becoming a politician or joining the civil service. I went in the other direction, and left the civil service to run a think-tank.”

Finch is keen to stress that his interest in cities was sparked from his time at the Treasury. “I worked on the response to Richard Rogers’ urban taskforce and I also worked with Sir Ronald Cohen on the social investment taskforce which was about bringing more private investment into deprived areas,” he says. “I loved the civil service but I wouldn’t describe myself as a typical civil servant and at some point I would have left and this was the best jumping off point.”

Now, though, he is fully focused on making a success of the centre’s imminent transition to independent status. “The centre was Lord Sainsbury’s baby, his idea, and he planted the centre at the IPPR and said ‘if you do a good job I’ll spin you out’ which was a really good incentive for me,” recalls Finch. “We took a view about a year ago that we’d done well enough and that’s what is happening now. In a couple of months we’ll be leaving here and moving to new offices on the South Bank. If we’d set up the centre in 1986, Covent Garden would have been exactly the right place for us because then the market was at risk of being shut down, and new offices and housing were going to be built where the piazza is. But now the South Bank is the right place for us to be.”

The centre believes in these basic principles: Successful cities should be good places for people to live and work – delivering prosperity, opportunity for all and a good quality of life; economic drivers – jobs, investment, wealth creation – are key to cities’ success and social wellbeing; and cities should be empowered to succeed, with greater financial autonomy and political devolution.

Finch believes that his organisation has made great strides in recent months. “We’ve really championed the notion of city regions and that was a fairly long-drawn-out process but we feel that through the sub-national review that was announced just before the recess, there is a new and fresh approach to sub-regional governance in England,” he says. “Confirmation that regional assemblies are going to be phased out and that RDAs are going to be made more accountable are things we have been calling for. We can now look to a specific sequence of policy and say that we had a hand in crafting some of that and this is really satisfying.”

Cities’ finances, too, are a key priority and Finch was gratified to see that Sir Michael Lyons picked up on their idea of supplementary business rates, meaning that cities can raise extra cash locally, keep it, and spend it on local priorities. “This is our role really,” he says. “One of our key niches is not just to research for the sake of it but to apply what we learn and come up with practical solutions that can be implemented.”

He goes on to say that all cities are different and even ones that are doing well have their own challenges to face. “There are quite surprising places in England that have done well – like Reading and York, for example. They’re not massive places and we want to understand more how they will continue to do well and what their challenges are – like congestion – but equally there are places which have done relatively less well – like Hull or Burnley – and they have a completely different set of issues. Big cities, on the other hand, have pockets of really quite stubborn deprivation that are very near to the vibrant inner core. Clearly cities are by no means sorted. They are better than they were but there are still plenty of issues to address.” In targeting these issues, the centre, Finch says, is well placed to deliver. “We see ourselves really at the forefront of helping Whitehall, cities and the business community, bringing these three audiences together to understand what the challenges are,” he says. “We’ve found a lot of traction in Whitehall around this.”

As for the future, and the possibility of a Cameron government, Finch points out that his organisation is strictly impartial. “There are a few differences between us and most other think-tanks,” he says. “The first is that we are not just in the Whitehall bubble. If you just operate in Whitehall you almost have to reveal your colours but we reach out across the country and work with Lib Dem, Conservative and Labour councils. This means we have to be scrupulous in our cross-party credentials and my civil service background means that independence is in my blood – it’s important to me that I engage with all parties on an equal and fair basis and I think I’ve infused the centre with that approach. So yes, our core funder is Lord Sainsbury, but we’re independent and the work we do benefits all cities. So we would be just as effective if there were a Cameron administration – but we’re also on the lookout for changes in the political leadership of cities too.”

And what about Finch’s future? Does he see himself back in the civil service at some point? “I’ve got a real commitment to the centre for at least the medium term. I think it’s really important that we make a real success of independence. I don’t know what my next move will be. I really love the fusion between policy and media which the centre allows. I also really enjoy explaining sometimes complex issues to a wider audience. So it would be good at some point to lead a similar but larger organisation. As for going back to government I don’t know actually. Having got into the habit of speaking out loud it would be quite hard to zip it and have the minister do the speaking!”