Almost no progress has been made in narrowing the UK's regional household income divide since 1997, according to a Resolution Foundation report covered by The Guardian on July 8, 2026. The report, titled "Uneven ground" and published by the think tank in August 2024, examined gross household disposable income per person before housing costs across UK local authorities over a 26-year period.

Between 1997 and 2023, gross household disposable income per person in London averaged £27,900, compared with £17,300 in Northern Ireland — a gap of three-fifths. At the local authority level, the disparity was starker still: Kensington and Chelsea recorded disposable incomes of £60,584, against £13,398 in Leicester, a four-and-a-half-fold difference that has held roughly constant for almost three decades, The Guardian reported.

The persistence extends beyond headline averages into the underlying rank ordering of places. Of the local authorities that sat in the poorest fifth for income per person in 1997, 54% remained there as of 2023. At the other end of the distribution, 82% of authorities in the richest fifth in 1997 had stayed in that top tier 26 years later. Between 2019 and 2023 alone, the gap between the richest tenth and poorest tenth of local authorities did not narrow at all.

The Resolution Foundation's findings complicate a simple story of stagnation, however. The report identifies genuine convergence on some measures: employment gaps between regions have narrowed since the late 1990s, jobs growth has been concentrated disproportionately in areas that historically had low employment rates, and local pay gaps have compressed as successive increases in the minimum wage have lifted wage floors in lower-paying regions. Manchester illustrates the pattern — gross household disposable income per person there grew 40% in real terms between 1997 and 2023, reaching £16,500. Yet that growth left Manchester significantly behind London, and also behind Sheffield, Newcastle and Liverpool, all cities with which it is more conventionally compared.

The divergence between converging labour-market indicators and a stagnant income divide points to where the mechanics lie: not primarily in wages, but in capital. The Resolution Foundation's analysis finds that the contribution of investment income to geographical income inequality has doubled since 1997, according to the report itself. Wage convergence, in other words, has been running in one direction while returns to accumulated assets — property, savings, equity — have been pulling regional household incomes apart in another, and the second effect has evidently outweighed the first.

This pattern sits uneasily against three decades of UK regional policy, spanning devolution, regional development agencies, the Northern Powerhouse initiative and the more recent "levelling up" agenda under successive governments. Each of these frameworks targeted, in some form, the employment and productivity gaps between regions — and the report's own data suggest employment gaps did narrow. But if investment income is now doing more of the work in sustaining the divide than earned income, policies calibrated around job creation and minimum wage floors address only part of the mechanism. A local authority's mix of homeowners versus renters, and the scale of accumulated household wealth within it, may matter as much to its income trajectory as the jobs available within its boundaries.

The persistence of the poorest-fifth and richest-fifth categories — 54% and 82% respectively — also raises a familiar question in regional economics: whether these are best understood as income gaps or wealth gaps expressing themselves through income statistics. Kensington and Chelsea's position at nearly four-and-a-half times Leicester's disposable income, unchanged in relative terms since 1997, is difficult to explain through labour market dynamics alone given a shared national minimum wage and broadly similar employment trends. It fits more naturally into an account centered on property values, capital gains and inherited wealth concentrated in specific postcodes.

None of this is presented by the Resolution Foundation as a verdict on any single government's policy record, since the 1997–2023 window spans multiple administrations of differing political stripes. The consistency of the divide across that period — through recessions, the 2008 financial crisis, austerity, Brexit and the pandemic — suggests structural rather than purely cyclical or partisan causes. Whether the current government's own regional agenda, whatever form it ultimately takes, engages with the investment-income channel identified in this report, or continues to focus predominantly on employment and wage measures that have already shown convergence, will be one indicator of whether the next three decades look different from the last.