Almost No Progress Made on UK Regional Household Income Divide in 30 Years, Report Finds

The promise of devolution and “good growth in every postcode” has been a recurring theme in British politics for decades. Yet, despite successive governments’ vows to narrow the income gap between regions, the reality is that almost no progress has been made since 1997. A recent report by the Resolution Foundation paints a stark picture of entrenched regional divisions, with London’s £27,900 gross household disposable income per person remaining three-fifths higher than Northern Ireland’s £17,300.

This persistence of inequality has real-world consequences for people living in regions that have been left behind. The report highlights the challenge faced by Andy Burnham, who has pledged to replicate Manchester’s economic revival across the country. However, as noted by the foundation, Manchester’s success story is not easily replicable, and sustained investment on a scale previously unseen in Britain will be needed to overcome decades of failure.

One striking aspect of the report is that over half of local authorities in the poorest fifth of places for income per person in 1997 are still there in 2023. This suggests that regional divisions have been perpetuated by successive governments’ policies, rather than reversed. The levelling-up agenda has failed to make a meaningful impact, and the income gap between the richest and poorest local authorities remained unchanged between 2019 and 2023.

The UK’s approach to addressing regional inequality is often compared unfavorably with other countries. Germany allocated approximately £70 billion every year for 25 years on post-cold war reintegration efforts to help rebalance its economy, whereas the UK’s levelling-up related spending in 2022 was a paltry £4 billion.

Manchester’s economic revival is often cited as an example of what can be achieved with sustained investment and devolution. However, even Manchester’s income level remains significantly behind London and other big northern cities. This poses a significant challenge for Burnham in turning around the economy amid tight constraints on public finances.

Resolution Foundation chief executive Ruth Curtice emphasizes the need for sustained investment in transport, housing, and wider economic development. Unless this investment is taken seriously, the economic and political cost of Britain’s geographic divides will continue. The report’s findings should serve as a wake-up call to policymakers, who cannot afford to continue down a path of incremental change when radical action is needed to address the deep-seated regional inequalities that have been perpetuated for decades.

Burnham’s plans must be backed up with concrete policies and sustained investment if they are to succeed. Ultimately, the challenge facing Britain is not just about rebalancing its economy; it is also about confronting the underlying causes of regional inequality. This requires a fundamental shift in approach, prioritizing long-term investment and sustainability over short-term fixes.

As Burnham prepares to take office, the question is whether he will be able to muster the political will and resources needed to tackle Britain’s long-standing regional inequality problem. The clock is ticking for him to deliver on his promises.