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London receives nearly twice as much investment as other parts of England - new study

New research produced by the Purposeful Finance Commission (PFC) has uncovered huge differences in regional investment levels.

New research published today has highlighted the huge geographical disparity between London and the rest of the country when it comes to the ability to attract investment in physical assets such as buildings and infrastructure.

The study by the Purposeful Finance Commission includes new analysis of the latest available ONS investment data to create a state of the nation investment map documenting the value of infrastructure investment in each region across the country.

Key findings include:

  • Stark regional divides throughout the country, with seven out of the top 10 areas receiving the most investment being located in London.

  • The best performing area, Camden and City of London, sees investment levels of almost seven times the national average and over 20 times the level of the lowest performing region.

  • London receives average investment of £6,058 per person compared to the English average of £3,316. Internal disparities reveal major challenges exist even in the Capital with local authorities such as Enfield (£1,636) scoring well below the national average.

  • The lowest performing regions averaged just over £1,000 of investment per capita annually prior to the COVID-19 pandemic, roughly a third of the UK average.

The report argues that more work must be done to connect private investors with local communities through purposeful finance initiatives. As part of the study, three roundtables were held in Liverpool, Manchester and Birmingham with local authorities, investors and other business bodies.

The roundtables consistently uncovered three factors that were mentioned by attendees as key barriers which were preventing private sector investment into local areas. These were:

  • A lack of capacity and expertise in local councils, especially among planning and regeneration teams. New polling of local government officials found that a third of people stated the lack of the level of expertise within their council is a significant barrier to delivering regeneration projects.

  • Government grant bidding processes have resulted in councils competing against each other for the same funds, wasting time whilst ensuring ‘losers’ have historically been embedded into the process.

  • A cumbersome and time-consuming planning regime slows down developments and increases costs. Some developers have reported spending as much as four times as long on obtaining planning permission as they do on the construction of their developments.

The PFC acknowledges that the Government has been working to address some of these challenges with the Levelling-Up and Regeneration Act coming into force just last week as a means to help revitalise the planning system.

The PFC will release a second report at the end of 2023 outlining policy recommendations on a national, regional and local level to help address the investment imbalances across the country to help further revitalise the levelling up agenda and regeneration in the communities that need it the most.

Tracy Blackwell, Chair of the PFC and CEO of Pension Insurance Corporation plc (PIC), said: “With about £11 billion invested in infrastructure type projects across the country, we at PIC have seen the real benefits regeneration projects can bring to local areas, including jobs, better social infrastructure, and significant spend in the regional economy. However, there are councils and local authorities that have proved better equipped to bring forward these types of projects than others. The report the PFC is publishing today outlines the extent of these disparities and reveals the barriers that are preventing more regeneration projects from being undertaken.

“I’m looking forward to launching the PFC’s second report later this year which will outline a series of recommendations to help communities can overcome these barriers and achieve meaningful levelling up right across the country.”


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