The Institute for Fiscal Studies

NEW PODCAST: How to fix the fiscal rules

@helenmiller.bsky.social and @benzaranko.bsky.social examine our current UK fiscal framework and its issues, and explore an alternative approach using a traffic-light style system.

🎧️ Listen here: ifs.org.uk/articles/how...

To leave questions for the panel on Slido please click here: https://app.sli.do/event/48mTe6GCH2BzMJfV1waLZb/live/questions Fiscal policy is difficult. Governments have to balance multiple competing… Does the UK fiscal framework need a rethink?

LIVE NOW: Does the UK fiscal framework need a rethink?

🖥️ Watch @benzaranko.bsky.social present his new report, followed by a panel with @chrisgiles.ft.com, Victoria Clarke, Rupert Harrison and Gus O'Donnell: www.youtube.com/watch?v=l_qu...

❓️ Ask questions here: app.sli.do/event/48mTe6...

We're hiring for an Office Administrator and PA to our Director, who will facilitate the smooth running of the office, meetings and director's diary, and will be the first point of contact for visitors.

📅 Find out more and apply here by 11:59 Sunday 22 Feb: app.beapplied.com/apply/8npldm...

Does the UK fiscal framework need a rethink? | Institute for Fiscal Studies An IFS event discussing new research on the UK fiscal framework, its limitations, and options for longer-term reform.

We have an @theifs.bsky.social event later today where I’ll be discussing this alongside a star panel: ifs.org.uk/events/does-...

It’s not too late to sign up for the livestream and send in difficult questions.

The UK has had numerical, pass-fail fiscal rules since 1997. Under this and previous governments, they’ve been at the heart of how tax, spending and borrowing decisions are made.

But is it time to rethink this approach? A thread based on some new @theifs.bsky.social research 🧵

What can emerging economies learn from the UK's approach to subnational finance?

David Phillips' presentation to policymakers from Nigeria’s RMAFC explains, drawing on the UK's experience with devolution and local government finance reforms.

📊 Find out more: www.taxdev.org/presentation...

Here it is, my magnum opus: an analysis of what’s wrong with the UK’s approach to fiscal policy (under this and previous governments), and a proposal for what an alternative to pass-fail fiscal rules could look like.

I’ll follow up with a longer thread later.

Quote from IFS Director Helen Miller: "It’s important for all our futures that policies are well designed and that the public finances are sustainable, but the UK’s current fiscal framework isn’t delivering on either front. We should be debating how to improve the framework now, rather than waiting for the next set of fiscal rules to be developed in a rush, behind closed doors, after the next general election. A broad traffic light assessment of the public finances would make governments’ multiple objectives – and the associated trade-offs faced – much more transparent and explicit."

📗 Read @benzaranko.bsky.social’s new report, funded by @jrf-uk.bsky.social, here: ifs.org.uk/publications...

🖥️ Watch the livestream of our report launch from 3pm today here: ifs.org.uk/events/does-...

NEW: The UK’s approach to fiscal policy needs a rethink.

📗 Instead of pass–fail fiscal rules and the consequent fixation on ‘fiscal headroom’, @benzaranko.bsky.social’s new report argues that the UK would be better served by a new framework, based around a set of ‘fiscal traffic lights’:

Scotland benefits from free university tuition, free personal care services, and smaller class sizes than England. Why? Because the Scottish Government receives 26% more funding per resident than is spent in England on comparable services. This funding advantage is now being (very) gradually eroded.

Quote from IFS Research Economist Martin Brogaard: "Without substantial increases in devolved revenues, improvements in public sector efficiency or cuts to other spending, it will be increasingly difficult for future Scottish Governments to continue to provide a wider range of free services – such as university tuition and personal care – than their counterparts elsewhere in the UK. The tricky funding outlook also has implications for assessing the plans different parties put forward in the election campaign. Cuts to some taxes or increases in spending on priority items are feasible but will require tough choices elsewhere in a Scottish budget which will already be under strain."

📗 Read our Scottish election report on Scottish government funding, the first of our Scottish election analysis funded by @therobertsontrust.bsky.social and @nuffieldfoundation.org, here: ifs.org.uk/publications...

Chart shows year-on-year real-terms growth in total resource funding and funding available for public services. Title states: "The continuing squeeze relative to England will be accompanied by much slower growth in funding for public services."

Over the next three years, overall day-to-day spending is expected to rise by 1.0% a year on average in real terms.

But the amount available for public services (rather than devolved benefits) is projected to grow by just 0.3% a year on average – with cuts to many areas planned.

Chart shows Scottish Government resource funding, 2010–11 to 2025–26, adjusted for inflation (2010–11 = 100). Title states: "Despite the squeeze in funding relative to England, overall Scottish Government funding has risen substantially since 2019."

After a decade of real-terms falls in the 2010s, Scottish Government funding has increased in the 2020s.

We estimate that, adjusting for changing responsibilities, funding in 2025–26 is 12.4% (or 6.0% per person) higher in real terms compared to 2010–11.

Scottish funding per person as a share of comparable spending in England, selected years. Title states: "The Scottish Government receives 26% more per person than is spent in England, but this funding advantage is being reduced by the ‘Barnett Squeeze’.

NEW: The next Scottish Government will face tough choices as their funding advantage relative to England falls, making it harder to continue providing more generous services and benefits than England.

🧵 THREAD on David Phillips and Martin Brogaard’s new Scottish election report:

How do Plan 2 student loans work, and how have they changed over time? | Institute for Fiscal Studies Plan 2 student loans were issued to English students who started university between 2012 and 2022.

📊 Read our explainer on Plan 2 student loan changes here: ifs.org.uk/articles/how...

🎧 Listen to our podcast here: ifs.org.uk/articles/are...

Chart shows average expected lifetime student loan repayments of the 2022 university entry cohort under different loan terms by lifetime earnings decile. Title states: "Those who started university in 2022 can expect to repay around £16,000 more on average due to changes since they applied to university."

📈 #IFSSatStat: We estimate that those who started university in 2022 can expect to repay around £16,000 more over their lifetimes on average in today’s prices than if government policy on Plan 2 student loan terms hadn't changed since they applied to university.

NEW PODCAST: Are Plan 2 student loans 'unfair'?

@helenmiller.bsky.social, Kate Ogden and @hepi-news.bsky.social's Nick Hillman examine how the student loan system works in practice: who repays what, how this has changed and what it all means for graduates.

🎧 Listen here: ifs.org.uk/articles/are...

NEW #IFSWorkingPaper: The lifecycle of judicial bias

Omry Yoresh and Weijian Zou's paper traces the lifecycle of judicial bias in India’s criminal courts to see how judicial bias arises and persists in the legal system.

📗 Read here: ifs.org.uk/publications...

Very pleased that our paper examining how doctors respond to changes to their pensions is now published in the Journal of Health Economics. We find that consultants in the English NHS responded to changes in their pensions similarly to how existing evidence suggests they may respond to pay.

NEW in Journal of Health Economics: The effects of delayed remuneration on doctor labour supply: Evidence from the English NHS

📗Carol Propper, George Stoye and @maxwarner.bsky.social's paper examines how mid-career doctor labour supply responded to NHS pension reforms: ifs.org.uk/journals/eff...

Devolved elections 2026 | Institute for Fiscal Studies All of our analysis relating to elections in the devolved nations in 2026.

How does the Barnett formula work? What are 'block grant adjustments' and what borrowing powers do the Scottish and Welsh governments have?

➡️ Read our devolved government explainers for the answers, part of our upcoming Scottish and Welsh elections analysis: ifs.org.uk/devolved-ele...

Ad hoc bolt-ons are undermining government’s aims on local government funding reform, but support for historic SEND deficits eases pressure on councils' finances | Institute for Fiscal Studies The government has announced changes to funding for English councils, and that it will compensate councils for 90% of historic SEND deficits.

NEW: Ad hoc bolt-ons are undermining government’s aims on local government funding reform, but support for historic SEND deficits will ease pressure on councils' finances.

📗 Kate Ogden & @lukesibieta.bsky.social respond to the final Local Government Finance Settlement: ifs.org.uk/articles/ad-...

Next Thursday at 3pm we launch @benzaranko.bsky.social's major new report on the UK fiscal framework at our in-person and online event, with a panel including @chrisgiles.ft.com, Victoria Clarke and Rupert Harrison chaired by Gus O'Donnell.

➡️ Sign up to join here: ifs.org.uk/events/does-...

Chart shows year-on-year change in cash-terms Plan 2 student loan balance/

📈 Kate Ogden's explainer on Plan 2 student loans explains why this is the case and shows how much a Plan 2 borrower would have to earn this year for their outstanding loan balance not to increase year-on-year in cash terms.

Read here ⬇️ ifs.org.uk/articles/how...

Chart shows year-on-year change in cash-terms Plan 2 student loan balance. Title states: "Someone with an outstanding Plan 2 student loan of £50,000 would need to earn around £63,000 this year for their repayments to offset the interest added."

Many with Plan 2 student loans will see their outstanding loan balance increase year-on-year in cash terms despite making monthly repayments.

Someone with an outstanding Plan 2 loan of £50k would need to earn around £63k this year for their repayments to offset the interest added.

Effects of a ban on psychoactive substances on prisons in England and Wales | Institute for Fiscal Studies We summarise new research that examines how the ban on new psychoactive substances affected drug availability and violence in prisons.

Read the comment here, part of our Transforming Justice project funded by @nuffieldfoundation.org ⬇️ ifs.org.uk/articles/eff...

NEW: The Psychoactive Substances Act successfully reduced access to synthetic drugs in UK prisons, but also triggered a short-lived yet significant rise in interpersonal violence and self-harm.

📗 Rocco d'Este and Magdalena Domínguez's comment summarises new @theeconjournal.bsky.social research:

Interested in working for a think tank? We're taking part in a webinar on Wed 18 Feb hosted by @resolutionfoundation.org for undergraduates or those with similar experience on what it's like working in a think tank and how to apply.

🖥️ Register here: www.resolutionfoundation.org/events/worki...

Chart shows year-on-year change in cash-terms Plan 2 student loan balance. Title states: "Someone with an outstanding Plan 2 student loan of £50,000 would need to earn around £63,000 this year for their repayments to offset the interest added."

Many borrowers will see their outstanding loan balance increase year-on-year in cash terms, despite making monthly loan repayments.

Someone with an outstanding Plan 2 student loan of £50k would need to earn around £63k this year for their repayments to offset the interest added.

YouTube video by The News Agents Have the Government designed student loans to uphold a generational and class divide?

🎙️ IFS Senior Research Economist Kate Ogden
spoke to @lewisgoodall.com for a special @newsagents.bsky.social episode on how the terms of Plan 2 student loans have changed over time and how this has affected repayments.

📺 Listen here: youtu.be/DwRqHN3nWuA?...