The Resolution Foundation has found that Britain's deep regional income divide has barely changed in 30 years, despite promises from successive governments to narrow the gap. The report highlights the challenge facing prime minister-in-waiting Andy Burnham as he prepares to take office.
Income Gap Between Richest and Poorest Areas Remains Wide
Between 1997 and 2023, gross household disposable income per person in London stood at £27,900, three-fifths higher than in Northern Ireland at £17,300. At the local level, disposable incomes in Kensington and Chelsea reached £60,584, four and a half times the £13,398 in Leicester—a gap that has persisted for almost three decades.
The report found that more than half (54%) of local authorities in the poorest fifth for income per person in 1997 were still in that category in 2023, while 82% of the richest places remained at the top. Between 2019 and 2023, the income gap between the richest and poorest tenth of local authorities stayed the same, despite Boris Johnson's "levelling-up" agenda.
Some Progress, but Challenges Remain
There were some positive developments: employment gaps have narrowed, and economic productivity has grown in cities like Manchester. Manchester's gross household disposable income per person grew by 40% in real terms between 1997 and 2023, but at £16,500, it still lags behind London and other northern cities such as Sheffield, Newcastle, and Liverpool.
Burnham has pledged to achieve "good growth in every postcode" through devolution, investment in transport and social housing, and greater public control over utilities. However, the Resolution Foundation warned that he would need to "get serious" about investment levels to overcome three decades of failure.
Calls for Sustained Investment
The report compared the UK's efforts unfavorably with Germany, which allocated about £70 billion annually for 25 years on post-Cold War reintegration. In contrast, the UK's "levelling-up" related spending in 2022 was just £4 billion. Ruth Curtice, chief executive of the Resolution Foundation, said: "PM-in-waiting Andy Burnham has rightly put regional inequality at the top of his agenda. But turning ambition into reality will require investment in transport, housing and wider economic development on a scale that no recent political leader has come close to meeting." She added: "Unless that investment is taken seriously, the economic and political cost of Britain's geographic divides will continue."
