Of course, the decision makers, whether military, corporate or governmental, would never accept that their choices are corrupt; and they always have a rationalisation to hand, on the very rare occasion when someone raises the point. But corruption it is, nonetheless.
Unfortunately, it isn't quite that simple.
The south has a lot of advantages over the north, particularly a deeper hiring pool for skilled labour, better infrastructure, and in some cases closer proximity to customers and business partners. Basically, the same reason that people tend to prefer cities. If you want cheap land, cheap labour, and less regulation, and aren't too bothered about where you are located, then you don't locate in the North, you locate in the Far East.
So what ends up in the North is things that need a UK element - businesses that need to be close to northern customers, businesses that can use local concentrations of skilled labour, such as shipbuilding, media, steel and so on, land-intensive businesses, typically recreation, and so on, and very small industries that rely on a handful of people who can locate themselves where they choose. So you get a lot of small specialist high-tech business, skilled labour business, and so on, and a handful of export businesses that need a 'made in Europe' label. Anything where you want cheap labour goes to the Far East, anything where you want to be able to swap employees with your competitors and hire experienced staff at short notice goes to London, anything where you want regular contact with other companies goes to London, and that doesn't leave enough left to keep the North as active as the South.
Sure there's an element of exec snobbery there, but it's not just a problem for the execs, it goes all the way down the company. If you want to hire good people you hire in London, because that's where the good people tend to go to get hired. When I did contract work up in Newcastle, I could expect to get 50% more money than I could down in London, because there were simply far fewer skilled candidates to hire. Even then, we had a terrible problem with people leaving, and we would hire twice as many people as we needed to make sure we had enough people left at the end to finish the project.
If you want regular contact with a specialist supplier, you move to London. If you want a close working relationship with another company, you move to London. And so on... It's not true for every company, just enough of them to make England into something approaching a city-state.
Even if you're a general, it's better to be located with other generals, semi-retired advisors, defence research companies, the Ministry of Defence, and other branches of the armed services in the South East, than in a military base or training camp. And the more generals that make the same judgement, the bigger the advantage it gives you.
There is a psychological element to all this as well, which is how far you need to get before you're considered 'Far Away' I've noticed that in the US 'far away' is 2-3 states away on both the East and the West coast, despite the states being different sizes. In the UK it's the South if you're in the North, or the North if you're in the South, and Wales and Cornwall no matter where you are. This despite the entire country being smaller than some US states. And on the island of Jersey, in the Channel, the east coast is far away from the west coast, and vice versa, despite the island being 5-10 miles across. As one native explained to me, if he had to move 'away from home' to work on the far side of the island, he might as well move to London.