South-East's tax 'funds rest of UK'

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But while the region is funding public services in other areas, its own police and NHS facilities are being neglected, according to research. The apparent divide is highlighted in a study by Local Government Futures and Oxford Economics.

They found the nine million people who live in Bedfordshire, Buckinghamshire, East Sussex, Essex, Hampshire, Hertfordshire, the Isle of Wight, Kent, Oxfordshire, Surrey, and West Sussex paid £18 billion in taxes in 2005-6 - double the contribution from Londoners. On average, each South-East resident hands over £2,000 more in tax than the Government spends per head in the region.

Public expenditure is also £1,000 less per head than in the UK as a whole. Meanwhile, police numbers are lower, with one officer to every 495 residents - compared with a ratio of one to 468 in the rest of England.

The South-East also contains four out of the five Primary Care Trusts with the lowest per capita funding, and the only NHS areas in England to be in deficit. Henry Smith, leader of West Sussex County Council and chairman of South East County Leaders - which commissioned the research - said the region could not continue to "bankroll" the rest of the country.

"When it comes to government funding, London receives special treatment, but policymakers seem to have forgotten that many of those who make London the successful world city it is, live in the South-East counties," he said.

"Ministers can't afford to continue to take us for granted, because the hardworking families and businesses who've made the South-East so successful won't be able to continue bankrolling almost a quarter of government spending without a fair deal that reflects the higher costs of living and working in a successful economy."

The report warned: "The South-East is not wholly prosperous. The high cost of living particularly affects those who are not part of the region's economic success."

Researchers also uncovered high council tax bills in the South-East. In Surrey, council tax payers are compelled to provide £8 out of every £10 their town halls spend. In Manchester, by contrast, council tax has to meet only £3 of town hall spending. Old people suffer most from spending cutbacks in the South, the study said.