Fiscal framework, public investment and regional regeneration: Policy responses to spatial and distributional inequality in the UK

Drawing upon heterodox contributions that highlighted the impact of the global financial crisis and austerity on inequality, this paper builds on recent research about spatial and distributional dynamics to argue that the post-crisis approach of monetary expansion and fiscal contraction has exacerbated disparities both between and within regions as well as along the income distribution. Given the deep gaps in regional, human and social capital stocks, the paper also shows that the current approach to fiscal policy and public investment will not reduce inequalities. The fiscal framework and policy on public investment require fundamental reform if the UK government is to raise economic growth and living standards in every part of the UK.