The Resolution Foundation has released a report showing 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, who has pledged to achieve "good growth in every postcode" through devolution.
Income Gap Persists Between Richest and Poorest Areas
Between 1997 and 2023, gross household disposable income per person in London remained at £27,900, three-fifths higher than in Northern Ireland at £17,300. At the local level, disposable incomes in Kensington and Chelsea (£60,584) were four and a half times higher than in Leicester (£13,398), a gap that has been consistent 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 there in 2023, while 82% of the richest places remained at the top. The income gap between someone living in the richest tenth of local authorities and someone in the poorest tenth stayed the same between 2019 and 2023.
Some Progress Made, But Challenges Remain
The report noted some progress since the late 1990s, including narrowing employment gaps and stronger productivity growth in cities like Manchester. Jobs growth has been concentrated in traditionally low-employment areas, and local pay gaps have narrowed due to the rising minimum wage. Manchester's gross household disposable income per person grew by 40% in real terms between 1997 and 2023, but at £16,500, it remains significantly behind London and other northern cities such as Sheffield, Newcastle, and Liverpool.
Burnham has described "Manchesterism" as his guiding philosophy, aiming to replicate the city's economic revival nationally through devolution, investment in transport and social housing, and greater public control over utilities. However, critics warn that tight public finances constrain his ability to turn the economy around.
Investment Needed on a Larger Scale
The Resolution Foundation highlighted that Germany allocated about £70bn annually for 25 years on post-cold war reintegration, while the UK's "levelling-up" related spending in 2022 was just £4bn. Ruth Curtice, chief executive of the foundation, said: "Manchester's economic revival shows 'decline is not destiny,' but Britain's big regional cities continue to underperform." She added: "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. Unless that investment is taken seriously, the economic and political cost of Britain's geographic divides will continue."
