Levelling up? Public spending has increased most in London as the north falls further behind

London has seen the highest increase in public spending since the government’s flagship levelling up agenda was introduced, while the north has fallen further behind.

IPPR North, a branch of the Institute for Public Policy research, has revealed the spending gap between the north and the capital has doubled since 2019. 

When the Conservatives promised to level up the country in their election manifesto three years ago, the spending gap between the north and London was £1,513 per person. Last year that gap increased to £3,008 per person. 

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Marcus Johns, a research fellow at IPPR North, said the “money simply didn’t follow the levelling up rhetoric” as the country “became more centralised and inequalities widened”. 

Spending remains lower in the north than in other parts of the country, and it also saw the lowest increase. In 2021, total public spending on the north was £16,223 per person, an increase of 17 per cent on 2019. This is lower than the average of £16,309 per person in England, an increase of 20 per cent since 2019.

London saw the highest public spending per person in 2021, at £19,231. That’s an increase of 25 per cent over the course of the levelling up agenda, which aimed to reduce regional inequalities across the country. 

Johns added: “Regions like the north deserve nothing less than to be afforded the tools they need to level up for themselves – it’s a sensible way of governing, and very normal in less unequal countries. But here, that hasn’t yet happened at anywhere near the level needed.

“Candidates to be the next prime minister should commit to delivering where their predecessors have not. Reversing cuts to local government and to planned transport projects, beefing up the levelling up bill to make it a transformative piece of legislation, and going big on opportunity and future proofing the economy.”

Last month, research from the Resolution Foundation claimed the government would need to invest millions more than expected for them to work. The report revealed “substantial” and “highly persistent gaps” between the richest and poorest regions. 

Income gaps between the north and south which existed 25 years ago still persist today. The average income per person in the affluent borough of Hammersmith and Fulham has “stubbornly been two-to-three times higher” than in Burnley for more than two decades, for example.

Lindsay Judge, research director at the Resolution Foundation, said: “Britain is beset by huge economic gaps between different parts of the country, and has been for many decades. While progress has been made in reducing employment gaps, this has been offset by a surge in investment income among better-off families in London and the south-east.

“People care about these gaps and want them closed, as does the government via its levelling up strategy. The key to closing these gaps is to boost the productivity of our major cities outside London, which will also lead to stronger growth overall.”