PHOTO: Japanese journalist Kenji Goto holds up a photo of fellow Islamic State hostage, Jordanian pilot Moaz al-Kasasbeh

On Wednesday the Jordanian Government said it would exchange an Iraqi woman, imprisoned since 2005 under a death sentence, for the pilot Moaz al-Kasasbeh, held by the Islamic State and threatened with execution.

As the negotiations continued, I spoke with BBC Hereford and Worcester about a wider issue: how is the Islamic State using the hostages as part of the effort to fund and run a “State” across its territory in Iraq and Syria?

Listen to discussion from 1:14.51

The Islamic State is trying to establish itself as a true “State”. It is not just “terrorist” — they are trying to set up administrations in cities and towns across Syria and Iraq. They have to run public services; they have to provide schools and hospitals; they have to provide security, as well as support their military. It takes a lot of money to do this….

At the end of the day, money rules — whether you are the Islamic State or whether you are a Government.