Improving public funding allocation to reduce geographical inequalities

This report proposes improved ways to allocate public funding within and between different areas in England to reduce geographical inequalities and enable more places to contribute meaningfully to national economic growth and renewal. It draws on the research of a multi-disciplinary team of academics, researchers and consultants undertaken between June 2024 and March 2025.
This research included evidence reviews, international case studies, analysis of spatially targeted funding streams, ‘deep dives’ into specific topics, interviews with policy practitioners, and citizen engagement. Addressing the role of public funding in reducing geographical inequalities in England, the research identified ten guiding principles and ten key problems with incremental, moderate and radical proposals to help resolve them.
The main messages for policy practitioners and decision-makers are:
• prioritising and resourcing geographical inequality reduction within the national growth and renewal agenda are critical to improving public funding allocation
• the problems in the existing funding allocation system are largely recognised and accepted by national, subnational and local policymakers and there is genuine appetite for reform. Early progress on positive reform – such as funding simplification – needs further support, acceleration and expansion to achieve meaningful change
• meaningful and sustained decentralisation of powers and resources from national to subnational and local government is integral to building capacity and capability for improving funding allocation to reduce geographical inequalities
• strengthened accountability is central to enhancing the effectiveness and wider transparency, oversight and scrutiny of public funding
• monitoring and evaluation require substantive resources and strengthening alongside improvement of data and legibility for users, stakeholders and the wider public

This report is for the Improving Public Funding Allocations to Reduce Geographical Inequalities project funded by the ESRC.

The project brings together a highly experienced interdisciplinary team from the Universities of Birmingham, Bristol, De Montfort, Newcastle, Nottingham, Plymouth and Sheffield, together with the National Centre for Social Research and Metro Dynamics.