Robert Halfon MP: Why is the Institute for Fiscal Studies receiving millions from the State?

By Robert Halfon MP

Does it matter that the Institute for Fiscal Studies is such a large recipient of taxpayers' largesse? Answers to written questions in Parliament have revealed that in the last 10 years, Whitehall has funded the IFS to the tune of £2.6 million. 

To take just a few examples:

• The Department for Work and Pensions has spent £1.7 million.
• The Department for Education has spent £400,000. 
• The Department of Business and Skills has spent £250,000.
• The Treasury has spent £147,000.

This funding from Whitehall does not include the money paid directly to the IFS by the BBC, the devolved administrations in Wales, Scotland, and Northern Ireland, the Bank of England, or the European Commission: all major supporters. Therefore, the true public sector cost of the IFS will be much higher than it appears.

Indeed, in 2009, the IFS received a substantial part of its core funding from the Economic and Social Research Council (ESRC), worth up to £6.8 million over five years. And ESRC in turn is funded by the Department for Business, Innovation, and Skills...

This raises many questions. Why is it necessary for the Government to spend such vast sums of money on one particular think tank? Given that the Treasury, the Bank of England, and all the Government Ministries are staffed with economists and statisticians, why is it that the IFS needs to be the beneficiary of taxpayer funding?  Why should this economic think tank be favoured over others?  Why has funding not gone to other think tanks with a different world view, such as the Institute of Economic Affairs?

There are further questions as to whether or not the IFS actually tendered for Government contracts, or were just lucky recipients of one handout after another. 

As I wrote in a previous article for ConservativeHome, it is good that the IFS exists to vigorously question and analyse economic policy.  Most reasonable people acknowledge the expertise and high standard of IFS work. 

But, that is very different from ‘the State’ acting as a kind of guarantor in supplying the IFS with millions of pounds of steady income from the taxpayer. The IFS is not the only think tank in the village.