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North-South economic and social divide still growing

Economic and social divergence between London and the North of England continues to grow, according to new LSE and University of Manchester research.

The research put to the test a statement by Cities Minister Greg Clark in January 2015 that such was the revival of northern cities to date that the “picture of the north-south divide pulling apart was certainly true in the previous decade…in this decade it is changing. North and south are now pulling in the same direction, which is upwards.”

It also follows Theresa May’s reference to “life being much harder” for “an ordinary working class family” than “many people in Westminster realise”.

angel of north

The analysis suggests that the economic divergence between London and the Northern regions in England continues to grow, in terms of GVA per head (a measure of the increase in the value of the economy due to the production of goods and services), employment and unemployment. Additionally, the gaps are also growing between London and the North in relation to a number of social outcomes, such as education and health, with improvement in these outcomes in London being in line with economic conditions in the capital bouncing back to pre-recession levels or beyond while the North lags behind.

But economic growth in London has not resulted in reduced poverty or inequality. On the contrary, poverty rates for various groups, including children, have seen much less improvement in London compared to the Northern regions; house price affordability and private rental costs have increased substantially in London but not in the North; homelessness has worsened in London but improved in the North; and overcrowding remains particularly acute in the capital.

The impact of public service cuts made to address austerity have been felt both in London and the North. While it is too soon to tell whether these cuts have direct impact on the provision of services in these regions, the research found evidence that measures related to A&E admissions and waiting times for treatment are deteriorating at a faster rate in London than in the North of England, while pupil-to-teacher ratios in the North are not improving as well as in London. This is putting increased pressures on services in these areas.

The paper, Pulling in the Same Direction? Economic and Social Outcomes in London and the North of England Since the Recession, by Polina Obolenskaya, Ruth Lupton and Bert Provan, concludes: “The findings suggest not only a need for regional rebalancing of both the economic and social kind, but that economic growth per se cannot be relied upon to improve social outcomes in any region – and in particular it cannot be relied upon to reduce poverty and inequality”.

It recommends closer monitoring of regional disparities and levels of inequality within regions, and a clearer understandings of how growth strategies and public service reform can generate “inclusive growth” in different local places.

For more information

Jo Bale, LSE Media Relations Office, j.m.bale@lse.ac.uk or 07831 609679.

Notes to editors

The paper can be found at http://sticerd.lse.ac.uk/dps/case/spcc/wp23.pdf

During the Social Policy in a Cold Climate programme, researchers from LSE’s Centre for Analysis of Social Exclusion (CASE) analysed social policies and spending of Labour and Coalition governments from 1997 to 2015 in the UK and their impacts on poverty, inequality and distribution, concentrating on the period since the 2008 economic crisis.

Pulling in the Same Direction? Economic and Social Outcomes in London and the North of England Since the Recession forms part of the project and focuses principally on the differences between London and three Northern regions – the North East, North West and Yorkshire and Humberside – since the recession. It is published by CASE as part of the Social Policy in a Cold Climate Series. 

29 July 2016