Greater investment in the UK’s regions is needed in the upcoming 2020 Budget to tackle regional inequality, according to a KPMG report which cites the successes of Greater Manchester’s devolution.
The report suggests that infrastructure investment, particularly in transport and digital connectivity, offer opportunities to create world-class cities outside London that can support the growth of UK regions beyond London and the South East.
Regional inequality has long existed between the capital and the rest of the UK, but since the 1980s, the gap in economic growth rates has widened. The KPMG report outlines that the 2020 Budget should focus on key economic areas around core conurbations in each region, such as Greater Manchester, to build them into world-class cities.
The KPMG report also proposes three pillars, which it recommends are vital to support economic growth and reduce regional inequality.
KPMG’s Three Pillars for fighting regional inequality
- Building a fertile business environment, connecting regions with their main cities to improve commutability, as well as improving digital connectivity and access to funding and innovation support.
- Creating regions that are magnets for people, through ensuring adequate housing supply, cultural and recreational offerings, and investing in skills from pre-school through to adult education
- Securing an enabling governance, through giving local leaders power to pursue long-term strategies, as well as developing sustainable ways of funding those initiatives, such as is being done through Greater Manchester’s enhanced devolution deal
Chris Hearld, Head of Regions at KPMG, said:
From Greater Manchester’s flag bearing devolution deal to the North East’s cultural renaissance along the River Tyne’s Quayside; with Birmingham planning for the Commonwealth Games in a couple of years and Leeds’ offer as a base for fast growth businesses being stimulated around University innovation hub Nexus, there is a great deal of exciting progress underway to support a diversity of economic ambition around the country.
“Yet, growth and productivity are not where they might be. This supports our assertion that all three pillars must be in place for an area to thrive. And it is imperative the UK’s regions prosper for the nation’s bottom line to grow sustainably.”
Yael Selfin, Chief Economist at KPMG UK, adds: “
As central and local government look to reinvigorate the regions, they should not neglect the importance of culture and recreational spaces in improving the quality of life and instilling purpose and pride.
“The aim must be to design places where people desire to live and to support their community beyond the provision of good employment opportunities alone. People should feel connected and supported by their local communities and cherish living in their region.”