A recent report by the Institute for Fiscal Studies (IFS) has revealed a significant disparity in public spending across England, with the poorest areas receiving substantially less per person than the wealthiest. The analysis, which examined spending on health, education, policing, and local government services, found that the poorest fifth of areas receive approximately 10% less in public spending per person annually, equating to a shortfall of around £1,600 compared to the richest fifth.
This finding challenges previously held assumptions and other analyses that suggested public spending tended to be higher in more deprived areas. The IFS attributes this difference to their more detailed methodology, which allocates spending to the specific local authority areas where services are delivered and consumed, rather than simply where funds are initially allocated. The report highlights that the primary drivers of this spending gap are lower health and education expenditure in poorer regions. Despite local government spending being higher in more deprived areas, this does not sufficiently compensate for the shortfalls in other crucial public services.
Geographically, the report indicates that the North East and North West of England receive the highest total public spending per person, while London and the South East receive the lowest. However, even within these broader regions, the pattern of poorer areas receiving less than richer ones largely holds true. For instance, the analysis shows that NHS spending per person is 15% lower in the poorest fifth of areas compared to the richest fifth, and school spending per pupil is 4% lower.
The implications of these findings are significant for the Government's levelling up agenda, which aims to reduce regional inequalities. The report suggests that current public spending patterns may be exacerbating, rather than alleviating, some of these disparities. While the Government has emphasised investment in infrastructure and specific projects, the day-to-day funding of essential public services appears to be distributed in a way that disadvantages more deprived communities.
Shadow ministers have been quick to respond, with the Labour Party stating that the findings underscore a failure of the current government to address deep-seated regional inequalities. They argue that the report provides further evidence that the levelling up agenda is not delivering for the communities that need it most, and call for a more equitable distribution of public funds to support vital services in deprived areas.
The Conservative Government has previously stated its commitment to ensuring all parts of the UK benefit from public investment. However, this report will likely prompt further scrutiny of how public funds are allocated and whether current policies are effectively targeting areas with the greatest need. The Department for Levelling Up, Housing and Communities is expected to review the findings as part of its ongoing work to address regional disparities.