Geography

The differences between UK regions are rooted in history going back decades, even centuries. Having fundamental effects on them will require reallocating capital spending for sure, and a whole lot more.

We are in the midst of major changes to local government funding – both its level and the system for raising and distributing it. This note brings together some of the key findings of our research on this topic and highlights where to find further information.

The results of the latest business rates revaluation reveal a growing divergence in property prices between London and the rest of the country. Increases in the value of non-residential property in the capital are set to raise rates bills by 11%, on average, increasing the tax take by over £700 million. This will be offset by reductions in bills and revenues in most of the rest of England, and especially the North, as property values fall behind. Growing differences in property prices reflect broader evidence of a growing divergence in economic performance over the last few years. And it will contribute to the ongoing trend of the UK government becoming more and more dependent on revenue from London to fund services across the whole – which may pose difficulties if more revenue sources are devolved to the local level. This observation discusses this and other issues related to today’s revaluation figures.