The country’s most unproductive areas receive the least investment to boost output, according to new analysis published before next week’s budget.

London and the South East get more per head in taxpayer cash for transport, housing, innovation and culture, says Onward, a Conservative-leaning think tank, in a report that paves the way for changes to Treasury rules.

London and South East enjoy most taxpayer cash

Francis Elliott Political Editor, The Times, March 6

Rishi Sunak, the chancellor, is expected to change rules on public spending that critics say reinforce regional inequality in next Wednesday’s budget.

Boris Johnson has made “levelling-up” opportunity around the country the overarching theme of his government. Today’s analysis shows the scale of the task ahead.

London has received nearly twice the UK average in research and development spending since 2001 and nearly three times as much capital spending on transport as the rest of England since 2007, according to Onward’s analysis. This equates to about £6,600 per head in the capital compared with £1,800 in the East Midlands and £1,980 in the South West.

The analysis also found that between 2016 and 2021, London will get five times as much financial support for affordable housing as the rest of England. It also enjoyed nearly five times as much spending on culture over a seven-year period from 2010.

The think tank is urging the prime minister and chancellor to “take a bazooka” to the Treasury “green book” that lays out the rules and devolve transport policy. It is also urging the chancellor to “use every tool at his disposal” to level up regional growth.

The author of the report, Neil O’Brien, a former Treasury and No10 adviser and now an MP, said: “It is no wonder some parts of the country feel shortchanged. 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.

“To change trends that have gone in the wrong direction for decades will need not a few tweaks, but taking a bazooka to the problem. We have to use every tool, starting by rebalancing the types of spending that do most for growth towards poorer areas.”