Society

British think tank highlights England's regional social-economic gaps

A British think tank denounces widening gaps between the north and south of England, decision power too much centralized and government's failures in delivering "change at the scale required". Between 2014 and 2019, the government spent 34% less for someone who lived in the north of England than in London.

Boris Johnson, UK's Prime Minister
For the IPPR, Boris Johnson's Leveling up program fails at closing regional divide between northern and southern English regions | December, 2021. Adrian Dennis via Reuters

The Institute for Public Policy Research, a UK-based think tank, released the report State of the North 2021 on January 17 where it highlights worsening regional divides, denounces centralized power and unfulfilled promises.

For the IPPR, England's regional gaps are widening in fields like health, job opportunities and trust in democracy.

In fact, if London and the South East region are one-third of England's population, they however account for 42% of its wealth, the report states.

Moreover, fewer jobs are created in the north. For every job created in the north, almost three are created in Greater London, South East and East of England regions. The job quality index created by the Institute shows lower scores in the north, too.

The report points out funding is lacking to help fill the gap. Funding and decision-making powers even became more centralized between 2010 and 2019.

The government invested 34% less for a person living in the north than in London

The central government gets most of the revenue as it collected 96% of individual tax in the north in 2019-20. In return, 23% of UK's public spending was deferred to subnational entities in 2019, in spite of devolved governments in Scotland, Wales, and Northern Ireland.

According to OECD data, the United Kingdom is the 12th most centralized country in 33 OECD states with available data. Less centralized than countries like Ireland or New Zealand (89% and 90% of expenditure managed by central governments) but more than Canada, where only 32% of public expenditures are managed at the national level.

Since 2010, the UK has cut public spending but public expenditure decreased less in London than in northern regions.

The government's capital expenditure to the north amounted to £1,280 per person in 2019/20 (US$1,748), which means that the population received £700, or 34%, less than someone in London. "Had the north received London-level investment in the period 2014/15 to 2019/20, it would have received £61.6 billion more capital investment than it did", the report emphasizes.

The centralization of power is materialized with the evolution of local government employment. Jobs in this sector decreased by 31% in the north since 2010 whereas central government jobs have risen 23%.

Job quality index by region in the UK
Job quality index by local authority district as per the IPPR, calculated from factors like pay, job security, skills required or union density. Darker indicates higher score. Good quality jobs are largely concentrated in cities and places with large and unionised industrial employers | © IPPR North, January 2022

Giving more fiscal and decision-making power to local authorities

For years, the UK government has been promising to reduce the social and economic gaps between the north and the south of the country.

For instance, Boris Johnson's government implemented a Leveling up policy to correct imbalances between regions. And in 2016, a Northern Powerhouse's agenda aimed at boosting economic growth in the north of England and parts of Wales, and particularly in cities like Manchester, Liverpool, Leeds or Newcastle.

But the charity claims the government fails to deliver on its promises as "the UK is more regionally divided than ever and the policies to deliver it remain elusive".

For the IPPR, "the lack of a clear plan allows central government to maintain a sense of progress and delivery by attaching it to a vast number of things. These often include investment in small capital projects – which, while welcome, are not enough to deliver change at the scale required."

One of the solutions the think tank promotes is to enhance financial and institutional devolution, by providing local institution with more fiscal powers for example.

For a government spokeperson, the report is "misleading" according to the BBC. A government white paper of the Leveling up policy is expected in early 2022.

Read more about the United Kingdom

Source
State of the north 2021/22, IPPR, January 2022, Free access, PDF Revenue and spending shares of state and local government, OECD, Free access

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