More than half of new jobs will go to London while the rest of the country competes for what’s left, a major new study has warned.
The huge gap in wealth between London and the rest of the country is only going to get worse unless drastic action is taken, researchers found.
And they called on the Government to introduce a £10bn-a-year “renewal fund” to invest in the North and Midlands.
The findings are published in a report by the UK2070 Commission, chaired by Lord Kerslake, the former head of the civil service.
He said: “There is no logical reason why people and places in one part of the UK are bound to perform more poorly than others. There is tremendous untapped potential in the regions in particular and we need to put the structures and resources in the right places to release it.”
Members of the commission include academics from the universities of Cardiff, Manchester and Liverpool, and local government leaders from the North and Midlands. These included Julia Goldsworthy, Director of Strategy for the West Midlands Combined Authority.
In his civil service role, Lord Kerslake led an inquiry into the problems facing Birmingham City Council.
The report warned: “A huge gulf exists between the UK’s best and worst performing regions and towns.”
It said this had a direct impact on people’s lives.
“There is a clear connection between these regional variations and deprivation, educational attainment and skills. For example, a child who is poor enough for free school meals in Hackney, one of London’s poorest boroughs, is still three times more likely to go on to university than an equally poor child in Hartlepool.”
London and the south east were increasingly sucking up new jobs, making the huge wealth gap worse, researchers found.
The proportion of new jobs created in the UK that located in the London and the wider south east rose from around 26% in the 1980s to around 40% in the following two decades.
And they warned: “On mid-range projections, we have calculated that London and the wider south east this could rise to 55% by 2051, with 2.26m extra jobs, compared with 1.88m extra jobs across the whole of the rest of the UK.
“The concern is therefore that inequalities in the UK will continue to grow.”
The proposed renewal fund would last for 25 years, coming to a total of £250bn. It would be used to support investment in new infrastructure as well as inward investment, and business and skills development.
As well as funding, the report calls for much greater devolution of powers including spending decisions, and the creation of four new “super-regional” economic development agencies. This would include development agencies for the North, for the Midlands, for the South West of England and for London and the wider south east. Scotland and Wales already have their own bodies.
The UK2070 Commission warned that unless action is taken, quality of life in an over-heating south east of the UK is likely to suffer, whilst economic productivity and measures of deprivation in other regions will remain among the worst in Europe – increasing the tensions arising from political challenges like Brexit, and making it harder to deal with problems like housing affordability and the impact of technological and environmental change.
Lord Kerslake said: “The UK’s regional inequalities are well-known and there have been many well-intentioned efforts to address them. Despite these initiatives, these inequalities are widening, and our inquiry suggests that most policy responses have been like pea-shooters or sticking plaster – too small, short-lived or disjointed to have a lasting impact.
“The result is that in 2019 the UK suffers both stark differences in performance within a comparatively compact economy, and disturbing disparities in people’s life chances. A child poor enough to qualify for free school meals in the London borough of Hackney is still three times more likely to go to university than a similarly disadvantaged child in Hartlepool in County Durham.
“These inequalities have built up over many decades and many different governments. Without a radically different approach and conscious effort to rebalance, the gap will continue to widen.”