Government spends five times more on London productivity

LONDON WILL get five times as much financial support for affordable housing as the rest of England between 2016-21, says a report by a leading think-tank.

According to Onward, which is led by Huddersfield-born Tory MP Neil O’Brien, inset, government spending to improve productivity is lower in less productive regions, and higher in regions that are already more productive.

The report by the former economic adviser to the Treasury and No 10 exposes how the most growth-enhancing items of public spending such as transport, innovation, housing and culture are skewed towards London and other regions that are already productive.

He wrote: “For decades we have piled fertiliser on the parts of our economy that are already flourishing while refusing to water the seeds of growth elsewhere.

“The PM’s mission to level up poorer parts of the country is vital.”

The report says spending on affordable housing in the current programme is five times higher per head in the capital, at £650 per head compared to £120 per head in the rest of England.

It says funding to unlock housing supply, including infrastructure to support private housing, is also concentrated in the South. The Housing Infrastructure Fund has spent £115 per head in the East of England, £97 in London and £95 in the South East, compared with £10 in the West Midlands and just £4 in Yorkshire.

Last week Lord Kerslake, the former head of the civil service, said in his landmark UK2070 commission report that the current housing crisis “has in large part been caused by rising regional inequality”.

The former chief executive of Sheffield City Council, who has previously advised Labour leader Jeremy Corbyn, wrote: “The continued allocation of land for housing to meet past trends does not make sense but is reinforced by the lack of effective regional planning for housing provision.”