The gap between wealthy and poor parts of the UK has barely shrunk since 1997, according to new research from the Resolution Foundation. The Guardian reported on the findings in July.

The numbers are striking. On average, people in London have about £27,900 a year to spend after taxes. In Northern Ireland, that figure is £17,300. When you look at smaller areas, the differences are even bigger. In Kensington and Chelsea, the average is £60,584 per person. In Leicester, it is £13,398. That gap — nearly 4.5 times larger — has barely changed in 30 years.

What is especially interesting is that the poorest areas stay poor and the richest stay rich. Of the local areas that were in the bottom fifth for income in 1997, 54% were still there in 2023. Of the areas in the top fifth in 1997, 82% stayed in the top tier nearly three decades later.

But here is where things get complicated. Some things have actually improved. More jobs have been created in areas that previously had very few jobs. Pay gaps between regions have narrowed, partly because the minimum wage has risen everywhere. Manchester is a good example: people there earned 40% more in real terms between 1997 and 2023, reaching £16,500 per person. Yet Manchester still falls behind London and cities like Newcastle and Sheffield.

So why hasn't the overall gap closed? The answer comes down to wealth — money people already have in property, savings and investments. According to the Resolution Foundation's report, investment income has doubled its role in creating regional inequality since 1997. In other words, while wages have started to even out across the country, the returns people earn from their assets have gone the opposite direction. The wealthy get wealthier, and that effect is now larger than the effect of rising wages.

This matters because most UK government policy over the past 30 years has focused on creating jobs and raising wages. Those efforts have worked — employment is more spread out than it was. But if the real problem is wealth concentration — people owning property and making money from investments — then job-creation policies only address part of the problem. Whether someone owns a house or rents one, and how much money they have saved, may now matter more to their region's income than the jobs available there.

The fact that Kensington and Chelsea stays nearly 4.5 times richer than Leicester, with no real change in 30 years, is hard to explain just by looking at jobs and wages. The real story seems to be about property values, savings, and inherited wealth, which tend to concentrate in specific areas and stay there.

This divide has held steady through recessions, the 2008 financial crisis, austerity, Brexit and the pandemic. That suggests the problem runs deep — it is structural, not just a temporary dip. Whether the government's next attempt to reduce regional inequality can address wealth concentration, or whether it will repeat the same job-focused policies that have only partially worked, is an open question.