Improving Public Funding Allocation to Reduce Geographical Inequalities

Abstract

The UK faces severe geographical inequalities that manifest across multiple dimensions – including productivity, income, education, and health – and in different ways within and between areas. These multifaceted issues and their spatial expression create interconnected challenges that hamper national growth and leave economic potential unrealised.The UK’s centralised governance system has failed to address these longstanding inequalities, with standardised policy approaches and ineffective public funding allocation unable to address geographical differences. England’s asymmetric devolution and competitive funding environment particularly disadvantage areas with limited institutional capacity.While the 2024 English Devolution White Paper offers some promise for strengthening subnational governance, its focus on national economic growth is likely to continue benefiting major urban centres with the most immediate economic potential at the expense of other places, thereby reinforcing geographical inequalities.This project proposes improved ways to allocate public funding within and between different areas in England to reduce geographical inequalities and enable more places to contribute meaningfully to national economic growth and renewal. It draws on the research of a multi-disciplinary team of academics, researchers and consultants undertaken between June 2024 and March 2025.This research included evidence reviews, international case studies, analysis of spatially targeted funding streams, ‘deep dives’ into specific topics, interviews with policy practitioners, and citizen engagement. Addressing the role of public funding in reducing geographical inequalities in England, the research identified ten guiding principles and ten key problems with incremental, moderate and radical proposals to help resolve them