Government targets for regional policy are too weak to reverse the North-South divide and need to be redefined, according to a report today which says the policies should aim to reverse regional disparities not just to reduce the rate at which the South is getting richer and the North is getting poorer.The report, from the Institute for Public Policy Research, also calls for Government Departments to be moved to harder pressed areas. It recommends that employment issues be given equal weight to productivity and says the Government’s focus on skills shortages and welfare-to-work programmes will not be enough to tackle high worklessness in poorer regions. The authors say more jobs need to be created in areas of high unemployment.

‘A New Regional Policy for the UK’ says Whitehall and devolved administrations should work together so the target for reducing regional disparities includes Scotland, Wales and Northern Ireland, rather than just England. It calls for key government departments and agencies – such as the Office of the Deputy Prime Minister, the Higher Education Funding Council and the seven Research Councils – to be relocated to lagging areas while at the same time better-off areas of the country bear more of the costs of success. That could be done through schemes such as congestion charging and capturing increases in land values.

Official figures show that since 1992 the gap in economic prosperity between the North East and the South East has almost doubled to nearly 60 per cent. In February this year more than one in five of the working population in the North East and Northern Ireland were claiming key state benefits. The figure for the South East was less than one in ten. The effects of the ‘brain drain’ to the south east also mean that in 2002 nearly a third of workers in London had a degree or equivalent while in the North East the figure was 19 per cent.

John Adams, Research Director at ippr’s new office in Newcastle and co-author of the report said tackling regional disparities had risen up the political agenda but the current targets were ineffective and lacked ambition. They simply aimed to reduce the gap in growth rates between regions, but not to reverse the North-South divide.

The reports sets out a ten-point plan for regional economic policy which it says is deliberately not a new set of spending commitments but is designed to flag up difficult issues that need to be addressed and priorities that need to be established.

‘A New Regional Policy for the UK’ by John Adams, Peter Robinson and Anthony Vigor is available from Central Books on 0845 458 9910.