This chapter gathers evidence about the spatial geography of the UK economy and reviews the current direction of sub-national development policy in England. It discusses how increasing analysis of the functioning of the economy has influenced policy over the last decade, including recent decisions to abolish institutions operating at the regional administrative scale in favour of those operating at scales closer to the functional economy.

In this context, it explores how the OECD common methodology to define functional urban areas could be a significant new tool for understanding the development, and measuring the performance, of key cities and their surrounding functional economies. Further, the chapter illustrates other forms of economic functionality beyond the labour market definition which underpins the OECD methodology. It shows how working with different understandings of functionality can provide further insights about economic opportunities and challenges for further developments of the work on international comparison of functional urban areas.