A new Resolution Foundation report has found that the gap between wealthy and poor regions in the UK has barely narrowed since 1997, despite decades of government efforts to level the playing field. The think tank's analysis of gross household disposable income per person — what people actually have left to spend after taxes — reveals a stubborn, almost static divide across three decades of policy interventions.

The numbers tell a striking story. Between 1997 and 2023, London's average household disposable income per person stood at £27,900, while Northern Ireland averaged £17,300. At the local authority level, the disparity grows sharper: Kensington and Chelsea recorded £60,584 per person compared with Leicester's £13,398 — a nearly 4.5-fold difference that has scarcely shifted in relative terms. According to The Guardian, the persistence extends beyond headlines. Of the local authorities in the poorest fifth for income per person in 1997, 54% remained there through 2023. In the richest fifth, 82% stayed put. Between 2019 and 2023 alone, the gap between the wealthiest and poorest tenth of local authorities did not narrow at all.

The picture becomes more complicated when the report's own data on underlying drivers is examined. Employment gaps between regions have actually narrowed since the late 1990s. Jobs growth has concentrated disproportionately in areas with historically low employment. Successive increases in the minimum wage have lifted wage floors in lower-paying regions. Manchester exemplifies 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 trailing London and comparable cities like Sheffield, Newcastle and Liverpool.

Here is the crux: wage convergence has pulled in one direction while returns to accumulated assets have pulled in another, and the second effect has won out. The Resolution Foundation's analysis finds that investment income — returns from property, savings, and equity — has doubled its contribution to geographical income inequality since 1997, according to the report. Wage convergence across regions has been real, but it has been outpaced by growing inequality in capital returns.

This dynamic creates a mismatch with three decades of UK regional policy. Devolution, regional development agencies, the Northern Powerhouse, and the "levelling up" agenda all targeted employment and productivity gaps — and the report's data confirm those gaps did narrow. Yet if investment income now drives more of the divide than wages do, policies centred on job creation and minimum wage floors address only half the mechanism. A local authority's composition of homeowners and renters, and the scale of accumulated wealth within its boundaries, may shape its income trajectory as much as the jobs available there.

The rigidity of the poorest-fifth and richest-fifth rankings — with 54% and 82% remaining in place respectively — raises a deeper question in regional economics: whether these disparities are best understood as income gaps or as wealth gaps expressing themselves through income figures. Kensington and Chelsea's persistent four-and-a-half-fold advantage over Leicester sits awkwardly with labour market explanations alone. A shared national minimum wage and broadly similar employment trends would not predict such stability. It aligns more neatly with an account built on property values, capital gains, and inherited wealth concentrated in specific postcodes.

The consistency of these divides across the 1997–2023 period — through recessions, the 2008 financial crisis, austerity, Brexit and the pandemic — suggests structural roots rather than purely temporary or political ones. The report is framed by the Resolution Foundation as analysis rather than judgment on any single government's record, since the period spans administrations of different political orientations. What happens next may depend on whether policymakers recognise the investment-income mechanism this report identifies. If the current government's regional agenda continues to emphasise employment and wage measures that have already shown convergence, rather than engaging with the deeper drivers of wealth concentration, the next three decades may resemble the last.