Our faculty are driven by a desire to address critical global issues in economics in a way that will improve people’s lives – often the lives of the poorest. In order to effect change, members of faculty work with external organisations, providing expert knowledge and rigorous analysis to help inform policy development and implementation. Here are a few examples of how research directly informs policy and practice.
- Informing the National Minimum Wage
Professor Richard Dickens, Professor of Economics, is a leading academic on labour markets and the minimum wage.
His research has directly informed the recommendations of the Low Pay Commission, on the rate at which the National Minimum Wage is set; on the associated regulations; and on the Commission’s evaluation of the economic impact of the National Minimum Wage.
In particular, in 2010, as a result of research conducted by Prof Dickens and others, the age of eligibility for the National Minimum Wage was lowered from 22 to 21 years, leading to 55,000 young British workers benefiting directly from a 20 per cent increase in wages.
In 2014 Prof Dickens was appointed as an independent member of the UK’s Low Pay Commission for a three-year term.
The Low Pay Commission makes recommendations to the Government on the level at which to set the National Minimum Wage.
As a commissioner, Professor Dickens is involved in:
- Monitoring, evaluating and reviewing the impact of the National Minimum Wage on pay,
- Employment and competitiveness in low paying sectors and small firms; the effect on different groups of workers,
- The effect on pay structures,
- The interaction between the National Minimum Wage and the tax and benefit systems.
The Commission reports to the Prime Minister, Deputy Prime Minister and the Secretary of State, and consists of a Chair and eight other members. Three of the Commissioners have an employee/trade union background, 3 have an employer background and 3 are independent/academic labour relations specialists.
In July 2015, Professor Dickens provided information on the UK’s experience in addressing wage inequality, as well as the modalities of introducing a national minimum wage at a conference organized by the government of South Africa, which is exploring whether to introduce a minimum wage so as to address the triple challenges of unemployment, inequality and poverty.
- Advising Ofsted on their inspection methodology
Dr Iftikhar Hussain, is one of very few economists to study the impact of Ofsted.
His research, involving applying econometric techniques to understand cause and effect within the education system, has provided some of the first hard empirical evidence on how Ofsted shapes behaviour and affects the education market.
In October 2015, Dr Hussain became a member of a new expert panel advising Ofsted on their inspection methodology. Ofsted had recently introduced a change to the way they inspect maintained schools, academies and further education and skills providers. Schools and providers that were judged good at their most recent inspection will now receive a short inspection approximately every three years instead of a full inspection approximately every five or six years.
The expert panel was established to help understand which elements of the new approach drive consistency and reliability, in order to improve their inspection practice and ensure the reliability of their assessments.
In three separate studies Dr Hussain has documented how school performance responds to the punitive elements of the regime, as well as investigating the impact of disclosure of Ofsted inspection ratings on parents' school choice decisions as well as on house prices.
As a member of the panel, he will help to scrutinize and inform the choice of methodology to test the new short inspection approach, and analyse the findings of the tests as they take place.
Hussain, Iftikar (2015) Subjective performance evaluation in the public sector: evidence from school inspections. Journal of Human Resources, 50 (1). pp. 189-221. ISSN 0022-166X
The School Inspector Calls, Education Next, Summer 2013.
- Enabling industry to navigate trade policy changes as a result of Brexit
The UK Trade Policy Observatory (UKTPO), in collaboration with EURIS, one of the largest trade associations in the UK, has enabled a large number of high-value manufacturers to commence informed engagement with trade policy to try to ensure that they get the best deal from Brexit. The collaboration has informed firms, enabling them to lobby government for trade agreements that have the most positive/least negative impact on income and jobs in the post-Brexit era.
Led by Professor L. Alan Winters, the UKTPO, a partnership between the University of Sussex and Chatham House, draws together the largest group of academic expertise on the world trading system, with specialists in economics, law, international relations, business and management. EURIS is a trade association of sophisticated manufacturers with a turnover of around £100 billion. EURIS represents sectors with a turnover of over £148 billion and with 1.1 million employees comprising 13 trade associations. EURIS covers sectors responsible for over 25% of total UK goods imports and exports.
In 2018, EURIS approached the UKTPO for advice about identifying, quantifying and responding to the likely impacts of the changing trade and regulatory relationship between the UK and EU. Brexit will potentially induce a huge change in the conditions under which all companies operating in the UK do business, and EURIS was keen to interact with the Government on these policy areas to minimise the risks and maximise the opportunities for its members.
The UKTPO worked with EURIS to provide EURIS member companies with unique insights into different Brexit scenarios and to equip them to advise the Government on trade negotiations with the EU and others. In particular, UKTPO formulated and executed a major survey of EURIS members in order to understand and communicate the major issues they faced with Brexit – see below. The project also involved research and analysis of various key issues surrounding UK/EU trade, including Rules of Origin (ROOs), customs procedures, regulations and mutual recognition agreements.
In July 2018, the collaboration led to 150 industry leaders writing to the Prime Minister to express concern over a ‘no deal’ Brexit scenario. The signatories stated that such an outcome would cause severe disruption and lead to severe economic damage to the UK. The letter called on the Government to secure a trade deal with the EU and avoid a ‘no deal’ scenario.
In September 2018, the collaboration produced a report – Securing a competitive UK manufacturing industry post Brexit - on the impact of a no-deal Brexit on the industrial product supply sector, stemming from a survey designed and analysed by UKTPO. The survey revealed that four out of five manufacturers in industrial product supply sector want continued regulatory alignment with the EU. The report also found that four in ten companies would face a skills shortage without EU workers, while 1/3 had already seen a fall in investment due to Brexit. The report was launched in London and has been reported in the Independent. EURIS continues to publicly lobby the Government against a no-deal Brexit as this would put at risk the industry product supply industry's £148bn contribution to the UK economy.
It is early stages to fully quantify the immediate or long-term impact of the overall collaboration with EURIS, but the aim is to strategically support EURIS member companies in preparation for different Brexit scenarios, with outputs informing and guiding particular UK policy decisions around Brexit. This will facilitate an industry negotiating position that is significantly better informed as to how various aspects of Brexit may impact upon it. Industry will be equipped with an evidence base and a hierarchy of needs to enable it to engage effectively with the government to inform and improve UK negotiating positions. This is true whether the approach that the government finally chooses is via the Withdrawal Agreement and subsequent negotiations based on the political declaration or a ‘no deal’ Brexit in which UK industry will still push hard for agreements with the EU and other trading partners.
This research was supported by EURIS and the ESRC IAA Social Science Impact Fund.
- Reviewing police pay
Professor Disney has directly influenced several public sector pay reviews, helping staff in the NHS and police obtain a fair wage.
In mid 2015, the UK government announced that the system used to decide how much money police forces receive would be replaced. The aim is to change the current method, the police allocation formula – which is nearly 10 years old, with a simplified version that will take into account factors such as the size of an area’s population.
A consultation process was launched involving Police and Crime Commissioners and Chief Constables among others, followed by a peer review to which the Home Office appointed Professor Richard Disney as Reviewer. Professor Disney was one of two academics appointed as reviewers. The reviewers were tasked with assessing the performance of the existing method of allocating police funding and the methodology used in the revision of the formula.
In November 2015, the review process was paused for a year after it was suggested that Home Office officials had made errors in computing the funding allocations for police force areas based on the new formula. Nevertheless, it is likely that the new formula will be implemented in due course.
In the UK, pay negotiations in the public sector are largely undertaken by pay review bodies. These bodies, which are staffed by individuals from outside government recruited through a competitive process, cover over 2.5 million public servants, including the armed services, NHS staff, doctors and dentists and, since 2014, the police. After considering evidence from the relevant parties, the Review Body makes independent recommendations on pay. It is generally expected that the Government will implement the recommendations and thereby avoid industrial action by the public servants. Professor Disney sat on the NHS Pay Review Body 2005-10 and on the Senior Salaries Pay Review Body 2011-14.
Professor Disney was also previously one of two external advisors to Sir Thomas Winsor's Review of Pay and Conditions for the Police Service in England and Wales, which reported in 2011 and 2012. In fact, the establishment of the police pay review body was a direct consequence of the recommendations of this Review.
The second report made a large number of recommendations directly to the Home Secretary, almost all of which were initially accepted by the Home Secretary and ultimately achieved by the arbitration process. This was the first major reform of police service pay and conditions for over thirty years or more.
Rowena Crawford and Richard Disney (2014) The Reform of police pensions in England and Wales, Journal of Public Economics Vol 116.
Rowena Crawford and Richard Disney (2015) Wage regulation and the quality of police officer recruits, Institute for Fiscal Studies Working Paper W15/19, London.
Rowena Crawford, Richard Disney and David Innes (2015) Funding the English and Welsh police service: from boom to bust? Institute for Fiscal Studies Briefing Note BN179, London.