This report synthesises findings from The Productivity Institute’s research programme on regional access to capital and investment finance in the UK.
It argues that weak and uneven UK investment (both public and private) stems from structural short‑termism, institutional centralisation, and geographically skewed capital markets.
Highly liquid London‑centred financial systems, combined with limited local institutional capabilities of financial institutions, generate deep insider–outsider divides that disadvantage economically weaker regions. New empirical evidence shows that post‑2008 capital markets have persistently priced most UK regions outside London and the South East as high‑risk, reinforcing regional divergence.
Public investment allocations and land‑use planning further amplify these disparities, while the UK’s unusually centralised fiscal–governance architecture restricts local agency and policy coordination.
Comparative international analysis highlights alternative institutional models, in particular the use of development banks and devolved fiscal systems, which better support regional investment.
The research outlines reform options, including redesigned governance frameworks, improved local financial intermediaries, and coordinated public–private investment platforms to enhance capital flows and long‑term productivity growth across UK regions.
Author Philip McCann
