Economic growth across the UK faces potential hurdles due to a significant “skills gap” between regions, with London and the south-east drawing in a disproportionate share of highly educated workers, according to a new report by the Learning and Work Institute.

The study highlights that the divide between regions with high and low levels of skills in the UK is more pronounced than in many comparable nations, and this gap is predicted to increase further.

If current patterns persist, the report forecasts that by 2035, 71% of London residents and 65% of adults in Scotland will hold a degree, compared to just 29% in Hull and East Yorkshire and 39% in Norfolk.

Data from the institute reveals disparities in foundational qualifications as well: 27% of adults in the West Midlands have not progressed beyond GCSE-level education, in stark contrast to only 9% in west London. This inequality is more severe than in many European countries. For instance, nations such as Ireland, Norway, and Finland show far smaller regional differences in the proportion of low-skilled workers.

The share of higher education qualifications also shows significant variation across the UK. In London, two-thirds of adults have advanced qualifications, compared with just a third in Greater Lincolnshire.

The report warns that if these trends remain unchecked, London and the south of England are likely to rival top-performing countries like Canada, Japan, and South Korea. Meanwhile, parts of northern England could lag behind, with qualification levels comparable to countries such as Latvia, Estonia, and New Zealand.

Bridging the gap between the capital and other regions would, according to the report, necessitate providing higher education qualifications to over 4 million additional individuals living outside London.

Stephen Evans, the chief executive of the Learning and Work Institute, said: “This report paints a picture of two Britains, where London’s strong pull concentrates talent, leading to a widening skills divide. This uneven distribution perpetuates a cycle where high-skilled jobs are often created in the south, further deepening the divide."

While Labour has moved away from Boris Johnson’s former “levelling up” rhetoric, Keir Starmer’s recently announced “plan for change” emphasized ambitions for “more people in good jobs, higher living standards, and productivity growth in every region of the UK.”

In response, the government has pledged to establish a new agency, Skills England, to manage training and education initiatives, alongside plans to revamp the apprenticeship system. Education policies in Scotland, Northern Ireland, and Wales remain devolved.

Government officials have also suggested that upskilling the domestic workforce could reduce reliance on migration to fill gaps in the labour market.

Evans argued that addressing the regional imbalance requires more than just enhanced skills policies. “What’s needed is a comprehensive strategy that includes industrial development and improved transport infrastructure to support local job markets in underperforming regions,” he said. “Without investments in both jobs and skills, along with infrastructure, the government risks falling short of its ambitions for equitable economic growth.”

A spokesperson from the Department for Education commented: “We are committed to breaking the connection between someone’s upbringing and their chances of success. Our ‘plan for change’ plays a central role in ensuring this, while developing the skills essential for economic growth nationwide.

“With the creation of Skills England, we are tackling skills shortages and empowering businesses to expand. Our focus is on cultivating a skilled workforce ready to meet the needs of future industries, laying the groundwork for long-term stability.”

The government also unveiled plans to combine the jobcentre network with the National Careers Service to provide clearer pathways to training and development opportunities.