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2023-12-31-accounts

Trustees, Report Year ended 31 December 2023 Institute for Fiscal Studies

Trustees’ Report | 2023

Contents

Contents
Company information 3
Introduction from the Chair of Trustees 4
Objectives and activities 5
The objects of the Institute
Public beneft
Strategic framework
How has the Institute tried to further these aims?
Review of 2023 6
Priorities for 2024 and beyond 17
Strategic Report 20
Financial review
Reserves policy
Principal risks and uncertainties
Going concern
Governance and management 23
Constitution
Members of the Board of Trustees
Induction and training of Trustees
Remuneration policy
Organisational structure of the Institute and the decision-making process
Statement of policy on fundraising
Charity Governance Code
Trustees’ responsibilities 26
Auditor’s Report 27
Financial reports 30
Statement of fnancial activities
Balance sheet
Statement of cash fows
Notes to the accounts

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Company information

Company registered office 7 Ridgmount Street London WC1E 7AE

Company registered number 00954616 (Incorporated in England and Wales) Registered charity 258815

Company bankers National Westminster Bank plc City of London Office 1 Princes Street London EC2R 8BP

Auditor

Moore Kingston Smith LLP 9 Appold Street London EC2A 2AP

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Introduction from the Chair of Trustees

I am pleased to present the Trustees’ report of the activities of IFS in 2023. Over the year, IFS published research findings on a wide range of topics. At the core of this is our ESRC-funded research institute, now complemented by a large research grant focusing on productivity

and work.

The Trustees were delighted to hear about two large new programmes of work that are beginning at IFS, expanding the areas of expertise of our researchers. The first, funded by the ESRC, investigates economic opportunities across racial and ethnic groups in the UK, focusing on five interlinked themes: identity, education, crime and justice, labour market, and wealth and inheritance. The project is headed by our Research Director, Imran Rasul, in partnership with colleagues at the London School of Economics. The work aims to transform our understanding of economic inequalities within and between the UK’s ethnic minority groups.

The second programme will focus on the interplay of social change and policy reforms. With funding from the Nuffield Foundation, IFS researchers are setting out to develop both depth and breadth of expertise on justice within IFS, and with partner institutions, such that there is a group of independent experts who can support, challenge and communicate about developments in justice policy and spending in the public domain. Just as, over the past two decades, we have developed such capacity in education, childcare and health, we aim to do so in the justice domain.

The first phase of the Deaton Review of Inequalities is almost complete, and will see the many studies that have contributed to it published during 2024 by Oxford University Press. The Review has brought together leading academics both in economics and in other disciplines; researchers involved in the Review have also been looking at aspects of inequality caused or exacerbated by the pandemic.

The academic excellence of the Institute’s research and researchers has continued to underpin our mission to inform the public debate and support policymakers in understanding the choices they face. IFS researchers are frequently called upon by the media, especially around fiscal events. Our improved website allows us to make new materials available to the public, including a series of new explainer videos, using chart animations and graphics to illustrate key research findings, and the podcast series, ‘IFS Zooms In’. IFS has also launched a new microsite, TaxLab, a repository of facts, figures, data and tools, created to provide better access to impartial information about how the UK tax system works, the effects it has on different people and businesses, and the options for reform. Everything on the site is either a verifiable fact or a conclusion drawing on the best possible evidence.

This report highlights these achievements along with a small selection of the research and activities that took place over the year.

Careful scrutiny of the finances of IFS is an important part of the Trustees’ work; as ever, this has been helped by clear and timely presentation of the facts to the committee by IFS officials. Whilst we, in common with other organisations that seek funding for academic research, face challenges in raising the finances to cover our ambitious programme of work, I am reassured that our financial position is healthy. In 2020, IFS’s ESRC Centre – which has attained ‘Institute status’ – received a further five years of Research Council funding. This contributes greatly to future stability. The Institute has again been successful in gaining ‘impact acceleration’ funding from the ESRC to broaden and deepen the impact of its research, and this funding is used to invest in digital expansion and public engagement. We have continued with this programme during 2023, expanding the digital materials available on our website and our research information system, as well as designing and running a series of online events and podcasts.

On behalf of the Trustees, I thank all the staff at IFS for their tireless work, continuing to produce and disseminate excellent research of the highest standard. I would like to thank my fellow Trustees for giving their time and expertise so generously throughout the year.

Michael Ridge

Chair of Trustees

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Objectives and activities

The objects of the Institute

The objects of IFS are the advancement of education, for the benefit of the public, by promotion on a non-political basis of the study and discussion of, and the exchange and dissemination of information and knowledge concerning, the economic and social effects and influences of:

in each case whether in the United Kingdom (UK) or elsewhere in the world.

So as to advance these objectives, it is IFS’s policy to retain the right to publish its reports openly in order to inform public debate and policymaking.

Public benefit

The Members of the Board of Trustees confirm that they have complied with the duty in Section 17 of the Charities Act 2011 and have taken due regard of the Charity Commission’s general guidance on public benefit. Examples of how the Institute has

aimed to meet its public benefit are given in the review of 2022, where the Institute’s achievements are reported.

Strategic framework

IFS operates within a strategic framework agreed by the Board of Trustees; the Board meets every year to discuss strategy with IFS staff, discuss issues, opportunities and difficulties, and agree on objectives. These discussions cover maintaining excellence in research, preserving independence and impartiality in policy analysis, engaging with a wide range of stakeholders, financial viability and good management, good governance, and supporting Institute.

How has the Institute tried to further these aims?

During the year, the Institute has carried out a wide range of research and has publicised the resulting findings as widely as possible through publications and conference participation, on its own website and in the media. Success lies in the scientific quality of our research and the efficacy with which our findings have informed the public debate. The following pages outline how this has been done.

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Review of 2023

In 2023, IFS continued to undertake rigorous research to inform public understanding of crucial policy issues. IFS research spans a broad spectrum of topics and is presented to, and discussed with, audiences from academics at international conferences to UK policymakers to undergraduate students.

Alongside work on our ambitious programme of academic research, focused on the key themes of our CPP Institute, IFS researchers were called upon during 2023 to analyse and explain a number of policy changes and discussions that accompanied the political and economic upheavals.

Academic excellence

In recognition of the contribution made by IFS research and researchers to the advancement of economic understanding, a number of members of staff and associates received awards and honours for their work.

IFS research is funded through research grants, from the UK Research Councils, charitable trusts such as the Nuffield Foundation, and elsewhere (see financial review on page 20 for details). During 2023, IFS was notified of the outcome of 42 research proposals, of which 25 were approved for funding (60% success rate). Fewer proposals were assessed than in 2022 (47) and the success rate was a little lower (77% in 2022); but the value of awards made was greater as IFS was successful with a number of large grants

(£10.0 million in 2023 compared with £7.4 million in 2022). A total of 101 funded research projects were active in 2023, which is very similar to 2022 (100). Selected ongoing and new research projects from 2023 are outlined below.

Centre for the Microeconomic Analysis of Public Policy (CPP)

CPP has been at the heart of IFS research and its dissemination over the past 30 years. In recognition of the role this research has played in the UK social sciences, the Economic and Social Research Council (ESRC) elevated the Centre to Institute status, with a new tranche of funding starting in October 2020.

The core objective of the ESRC Institute at IFS is to inform and improve the quality of public debates around economic policy in the UK and internationally. We do this by conducting worldclass research, acting as a national resource by collaborating with a wide range of researchers in the UK and abroad, engaging with policymakers and practitioners, and building capacity through training new generations of researchers. We are strongly committed to bringing the high-quality and rigorous insights from our research, and the research of others, to bear on issues of current public interest through many forms of media and communication.

Our research agenda is ambitious and will yield policy-relevant academic research that makes important scientific advances and is published in the most prestigious peer-reviewed journals. This agenda is driven by our core areas of expertise, covers a broad spectrum of interrelated topics and is designed to address major challenges the UK and other economies face in ensuring the resilience of households, firms and the broader economy. It will continue to evolve in response to the changing policy landscape and wider economic environment.

Our agenda is organised around five interconnected themes:

The economics of race and ethnicity

Funded by the ESRC, this ambitious new programme of work investigates economic opportunities across racial and ethnic groups in the UK, focusing on five interlinked domains: identity, education, crime and justice, labour market, and wealth and inheritance. The project, headed by Imran Rasul, IFS Research Director, and co-led by Monica Costa Dias (IFS and Bristol) and Lucinda Platt (London School of Economics), aims to transform

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understanding of economic inequalities within and between the UK’s ethnic minority groups.

The UK is increasingly ethnically diverse. There have been significant improvements in the economic, and especially educational, success of some ethnic minorities in recent years. But not all have shared in this success. Substantial ethnic inequalities in multiple domains across the life course persist, and many continue across generations. The experience of minority groups has been quite different in terms of how far their economic outcomes have become similar to or different from those of the majority. There have been equally important differences within minority groups, between men and women and by social class background.

Even as the extent of ethnic inequalities is recognised to be of public and political salience, the causes and solutions remain contested. Despite an important body of existing qualitative and quantitative research from multiple disciplines, substantial gaps remain in knowledge and robust policy recommendations.

The ambition of this project is to establish new, authoritative and policy-relevant evidence and understanding in this contested area. We will do so by providing a detailed account of how ethnic economic inequalities emerge, evolve and are maintained across the life course at a level of detail and in ways not previously possible. We will use newly available administrative and linked data, tracking different life stages, alongside longitudinal survey data and primary data collection. Developing an integrated programme of work across domains allows robust conclusions to be drawn about what drives disadvantage for different ethnic groups, and for men and women and different social classes within groups.

Inequalities in the 21st century

The first stage of this wide-ranging, international and interdisciplinary programme of research, funded by the Nuffield Foundation, is now complete. Altogether, 18 studies, along with commentaries, have been produced by an interdisciplinary and international group of experts. The studies contain much new work, as well as summarising the current state of thinking in each area. They are to be published by Oxford University Press in the summer of 2024, freely available through Open Access as part of the journal, Oxford Open Economics. In addition, a series of country studies focus on particular countries and provide comparative data.

The studies cover these areas:

Work is under way on the second volume of the Review, which will draw on the key findings and themes to produce a book accessible to a much wider audience. This is likely to be published in autumn 2024.

Cross-country studies of inequalities

Alongside the Deaton Review, IFS researchers are taking part in an international project looking at differences and commonalities in inequality in 17 countries.

The impact of the COVID-19 pandemic on earnings, education, skills and jobs raises key challenges for inequality and the design of policy responses. The aim of this project is to examine a broad set of inequalities in employment, human capital, earnings and family income over the last five decades in a coherent framework across North America and Europe. It will provide a major source for comparative research on inequality trends and on how the pandemic has affected them. There are 17 country-based research teams involved, with extensive experience researching economic inequalities. Each team is responsible for their country-specific data, which will draw on household surveys and administrative records, but all analyses are coordinated across countries to provide harmonious treatment of variables and estimation.

The project is composed of four related research strands. The first is to understand changes in a wide range of economic inequalities before and during the COVID-19 pandemic. The second examines labour market inequalities in detail. The third highlights the role of education and training for those who do not go to university and focuses on the differences in educational systems and the impact on inequality. The final strand looks at the tax and welfare systems and their effectiveness at addressing family income inequality.

The key outputs of this project are a set of country-specific papers on the evolution and drivers of income inequalities

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pre- and post-pandemic, two cross-country synthesis papers, and a policy brief for each country. We are organising an international conference for academics and policymakers to conclude the project. The project highlights key differences and commonalities across 17 economies, deepens our understanding of the drivers of inequality and the impact of the pandemic, and provides evidence needed to design appropriate policy responses to inequality in the post-pandemic world.

Tax in developing countries

The Foreign, Commonwealth and Development Office (FCDO) has renewed funding for The Centre for Tax Analysis in Developing Countries (TaxDev) for seven years, working in collaboration with the Overseas Development Institute.

TaxDev was originally established in 2016 to support governments in low- and middle-income countries (L&MICs) to develop evidence-based tax policies which help them to achieve their revenue, poverty reduction and growth objectives. To date, the programme has worked with partners in Tax Policy Units in Ethiopia, Ghana, Rwanda and Uganda to provide highquality analysis at critical points in the policymaking process, and increase the demand for, and use of, evidence by senior policymakers. It has also generated important new research on the impact of taxes in L&MICs.

TaxDev’s recent activities have included support for the embedding of systematic policy appraisal and costing in budget processes; in-depth reviews of major taxes (such as customs and VAT); support for the publication of tax expenditure reports to increase transparency around spending through the tax system; and the development of medium-term revenue strategies to help partner governments to plan and deliver on their longer-term policy priorities.

Complementing the work with partners, TaxDev’s research has sought to answer large policy questions which are core to our broader understanding of how tax systems operate in L&MICs. How might the taxation of formal sector employees in Africa be simpler, fairer and more progressive? Is the VAT really regressive in the presence of high levels of informality, and could VAT exemptions be better targeted? How would different households, businesses and industries be affected by carbon pricing? And how can governments increase property tax revenues without reducing welfare?

TaxDev’s work over the next seven years will include:

researchers and wider tax policy networks to maximise the impact of training tools, resources and research.

Quality of higher education provision

The overall objective of this project is to set out options for making use of graduate earnings data to support the Office for Students’ regulation of the higher education sector. For this purpose, we aim to develop indicators of graduates’ earnings outcomes that will be informative about higher education providers’ success, or otherwise, in equipping graduates with skills that are useful for them in the labour market.

Education Maintenance Allowance

The Education Maintenance Allowance (EMA) is a government programme designed to improve lifetime outcomes by reducing the numbers of young people leaving school without basic academic qualifications in the UK. The scheme pays 16- to 19-year-olds up to £30 per week for continuing their education, targeting students from poorer households due to their particularly high dropout rates.

While early evidence shows the EMA boosted post-16 education participation and reduced youth crime, evidence of its effect on subsequent educational attainment is incomplete, and there is no evidence on its long-term effects on crime and labour market outcomes. As improving later-life outcomes was the ultimate aim of the policy, this represents a crucial gap in our knowledge. This project will exploit the staggered roll-out of the EMA across the UK in 2004 to investigate its effects on labour market outcomes, education outcomes and crime, at various ages up to 30. It will also consider how these effects vary by gender, prior attainment and – sample size permitting – ethnicity. The project will provide evidence for policymakers on whether the EMA improves longer-term outcomes and on whether it delivers value for money. More broadly, the project will provide additional evidence on whether policies that reduce school dropout improve longer-term outcomes.

Minimum wages and cash transfers

Tackling high rates of inequality and in-work poverty has become central to public policy agendas in many developed countries. Policymakers have often turned to two particular tools: cash transfers (sometimes called ‘tax credits’) from the government to low-income workers or firms that hire them, and minimum wages. But the impacts of these policies, and in particular their role in reducing poverty and increasing living standards, cannot be adequately understood independently from one another.

Understanding how these key tools combine, and how their effects are shaped by the wider economic and policy environment, is crucial for building the mix of policies that is best targeted at boosting living standards for low-income workers. With funding from the ESRC, this project seeks to enhance our understanding of such policies in several dimensions, and across three countries: France, Germany and the UK.

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Job opportunities

The COVID-19 pandemic brought about unprecedented changes to the labour market. Job opportunities in sectors such as hospitality disappeared overnight, whilst opportunities expanded in other sectors such as driving and healthcare.

This radical restructuring of the economy called for a new way of measuring the labour market prospects facing individuals that captured their widely varying ability to adapt to the shock by moving into alternative lines of available work. The aim of this project is to take a newly developed approach to measuring job opportunities, allowing for detailed characterisation of how opportunities vary across individuals, and to embed it in research practice in three ways:

Healthcare workforce shortages

IFS Associate Director, George Stoye, has received a British Academy postdoctoral Fellowship to carry out a programme of research into shortages in the healthcare workforce.

Governments around the world are facing shortages in health and long-term care staff. However, we know relatively little about how these shortages have fed through to patient outcomes, in part due to a lack of high-quality data on workers in these areas linked to patient outcomes. This research uses new individual administrative data on health and long-term care workers in England, linked to patient records at the provider level.

The work will exploit three natural sources of variation in the availability of staff: changes in the number and experience of hospital and nursing home staff following the 2016 EU referendum; disruptions to the composition of hospital doctor teams; and changes in the nature of the labour markets that nursing homes hire workers from. This will allow researchers to study the impact of these disruptions on the number and characteristics of workers in the affected sectors, and the health consequences for patients.

Pensions Review

The Pensions Review – led by the Institute for Fiscal Studies and funded by abrdn Financial Fairness Trust – is an ambitious, 2½-year, project that is comprehensively assessing the consequences of current pension policy, the economic environment and individual behaviour for the future of living standards in retirement. It will provide recommendations for reform to improve outcomes for future generations of pensioners across the UK.

The time is ripe for a comprehensive review of pensions policy. The economic and policy environment is hugely different from when Lord Turner’s Pensions Commission reported in 2005. The UK has seen a global financial crisis, a COVID-19 pandemic

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and, most recently, the highest levels of inflation in almost 40 years. Interest rates (at least until mid 2022) have been at historically low levels, homeownership rates have fallen, and there has been a large rise in self-employment with the growth of the gig economy. All of these have consequences for how people are – or should be – saving for retirement.

The Review is led by a team of three Directors at IFS: Paul Johnson, Carl Emmerson and Jonathan Cribb. We are guided by a highly qualified steering group: David Gauke (former Secretary of State for Work and Pensions) and Joanne Segars (former CEO of the Pensions and Lifetime Savings Association). This steering group will provide high-level strategic advice on the direction of the Review and on the merits and drawbacks of policy options that emerge from our work, and will assist with disseminating our findings and recommendations to policymakers and the pensions industry.

The Review was launched at a public event in April 2023, with preliminary findings to be published throughout the following two years: the first main report was released in autumn 2023. We will publish our key findings and recommendations for reform at launch events in London and Edinburgh in early summer 2025.

Communication and stakeholders

IFS receives UKRI funding, in the form of a renewed Impact Acceleration Account (IAA), specifically to enhance the impact of our research. This has been and will continue to be used to develop our relationships with key stakeholders – business, central government, and local and devolved governments – and to improve the resources available to the public to aid their

understanding of economic issues.

UKRI has renewed this funding stream, to cover the period from 2023 to 2028. The key aims to increase the impact of our work are set out below.

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and impact. Building enthusiasm and capability is key to achieving genuine and enduring impact. The ultimate objective is to ensure the sustainability of our impact capacity and that we build on our past successes in creating new generations of researchers who can go on to influential positions in academia and public policy, where they can have long-term positive impact on policy and public understanding.

Conferences and lectures

Our events in 2023 were a mixture of in-person, online and hybrid events. Our event videos from 2023 were watched over 28,000 times (2022: 32,000).

Some highlights are listed below.

Research findings and reports

A key strength of IFS is that its analysis of policy and its contributions to the public debate are grounded in rigorous empirical research. IFS researchers and Fellows published 82 (2022: 81) journal articles during the year, including six (2022: three) in the top five economics journals and 11 (2022: 21) in the leading field journals. The IFS journal, Fiscal Studies, which is published by Wiley, curated symposia of papers on: global minimum taxes; welfare economics; tax equity around the world; and the Understanding Society panel dataset.

Journal paper highlights included the following:

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https://doi.org/10.1016/j.jdeveco.2023.103074

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doi.org/10.1016/j.jdeveco.2023.103166

Researchers published reports relating to a broad spectrum of important policy areas. Some of the more significant reports are mentioned below.

The IFS annual report on living standards, poverty and inequality examined how material living standards – most commonly measured by households’ incomes – have changed for different groups in the UK, and the consequences that these changes have for income inequality and for measures of deprivation and poverty. This 23rd such annual report by IFS authors explored how material living standards have changed since the beginning of the pandemic, based on household incomes as well as other indicators. The report had a particular focus on cost-of-living payments and housing. A further report looked particularly at the impact of the COVID-19 pandemic on living standards. In addition, most of the studies for the Deaton Review of Inequalities were finished during the year and made available on the Review’s website; these will be published during 2024 by Oxford University Press as part of its Open Access journal, Oxford Open Economics.

Researchers produced the sixth IFS annual report on education spending, funded by the Nuffield Foundation, which sought to provide a clear and consistent comparison of the level and changes in spending per student across different stages of education. Following on from cuts to most areas of education spending during the 2010s, the government has provided additional funding at successive spending reviews between 2019 and 2021. However, rising levels of inflation and cost pressures have dampened the effects of extra funding. The government also has high ambitions for education to play a major role in ‘levelling up’ poorer areas of the country. Our report therefore focused on geographical differences in education spending across each stage of education, as well as the extent to which education spending is targeted at pupils from more disadvantaged backgrounds.

Publications were also launched around key political and fiscal events. Following the Spring Statement and Autumn miniBudget, IFS researchers helped to explain the implications by answering questions from journalists from all the national papers, as well as conducting interviews on the BBC, ITV and other major broadcasters. In addition, as ever, research was disseminated via local radio and newspapers and through a range of online media outlets. Analysis was presented to journalists and key civil servants on the day after the Chancellor’s statements, to explain the implications for the public finances, businesses and households. Similar analysis was carried out around the Scottish Budget in February.

The IFS Green Budget 2023 was published in October with a detailed analysis of the issues and challenges facing the Chancellor. The areas covered by IFS researchers, and partners at Citi, were: the global economic outlook; the UK economic outlook; the outlook for the public finances; policy risks to the fiscal outlook; Chancellors’ responses to economic news; public sector net worth as a fiscal target; inheritance tax reform; implications of the NHS workforce plan; investment in training and skills; and full expensing and the corporation tax base.

Other reports published during the year covered topics including: the future of the state pension; benefits and the labour market; health, health inequalities, spending on healthcare and staff diversity in the NHS; corporation tax; local government and the geographical distribution of spending; and geography and the labour market.

Engagement with stakeholders

IFS staff and centre directors give evidence to a wide range of committees each year and also meet with senior policymakers to discuss policy developments and ideas, as well as briefing them on IFS research.

IFS work was cited 352 times in UK policy documents in 2023 (277 in 2022; 333 in 2021). The numbers show just how influential we are in informing policies, briefings to policymakers and debates. IFS was mentioned in 97 (157 in 2022; 187 in 2021) Select Committee published briefings, 35 (62 in 2022; 64 in 2021) official government documents from departments, commissions and committees (excluding select committees) and 25 (29 in 2022; 38 in 2021) research briefings from the House of Commons Library and Scottish Parliament.

Staff gave evidence to parliamentary committees 21 times in 2023 (17 in 2022; 12 in 2021; 15 in 2020; 9 in 2019). In 2023, staff have given evidence to:

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Significant contributions by IFS staff to committees, commissions and policy reviews in 2023 included:

Through our website, social media and press activity, we communicate the results of our research directly to the public, to enhance understanding of economics and policymaking. Our primary social media channel (because it reflects our main stakeholder groups) is Twitter (now known as X), where we have over 59,200 followers on our main @TheIFS account, up from 56,200 at the end of 2022. We have seen growth of 5.3% in 2023. Director Paul Johnson’s account has also grown and now has over 62,490 followers, up 9.0% from 57,300 followers at the end of 2022. His tweets reached 16,694,000 total impressions in 2023 (compared with 29,252,000 in 2022).

YouTube continues to be central to our digital strategy – it hosts our explainer videos, event videos, podcasts and other video content. This gives us an exceptional opportunity to reach younger audiences. In 2023, around 50% (2022: 63%) of our YouTube audience was aged between 18 and 34. YouTube

remains a key place to reach younger audiences, though we are now reaching an older demographic on YouTube than before. This is likely due to demographic changes on the platform itself. During the year, we had around 177,600 views (2022: 174,000) on YouTube.

In November, we launched our TikTok channel, where we primarily share clips from our podcast, short-form explainers and event clips. In the first two months of operation, we had over 1,045,000 views and reached over 827,000 people with our content.

TikTok is a high-engagement platform. Our videos generated nearly 3,000 comments, were shared over 3,000 times and were liked nearly 24,000 times. This is our highest-engagement social media channel. We added 4,414 followers in the first two months; 63% of them are aged between 25 and 44 and 97% of them are based in the UK. Crucially, our follower base is geographically distributed, with only 5.7% from London.

The number of website users (individual visitors) remained steady at about 1.5 million between 2022 and 2023.

Since the new version of the IFS website was launched in 2022, with improved ease of navigation and improved accessibility, the communications team has been working on curating existing content and producing new materials to showcase our research. In 2023, we continued filming our rapid-response explainer videos for major fiscal announcements. Our videos around the Spring Budget and Autumn Statement had around 36,000 views across platforms. We have continued developing our longer explainer videos. In 2023, we produced two explainer videos on pensions, which together gained over 3,000 views.

Video production also allows us to give young researchers exposure to the production process for digital content and a chance to build skills in this area. The videos are hosted in a dedicated explainer section on our website, as well as on

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YouTube, Twitter and Facebook. These social media platforms allow us to reach new viewers via algorithmic distribution.

Capacity building

IFS contributes to the UK social science environment by training excellent economists – both our own researchers and those working elsewhere. IFS researchers who move on typically take up positions in academia, or in the civil service or the media where they will put into practice the research and communication skills they have learned at the Institute.

We continued to improve our training programme for staff during the year. During 2023, in-house training for research staff included research skills, media training, writing and presentation skills, Stata and R coding and other analytical skills, while there was training for professional services staff in social media, design, membership management and other communication skills. Most of the training can now be carried out in-person again, although we have made a habit of recording a number of core training sessions so that those who cannot attend are able to view them.

Five new graduate economists were taken on in 2023 (2022: three), as well as five postdoctoral researchers (2022: two).

The Institute also runs a summer internship programme. In 2023, three students (2022: four) were taken on for six-week placements, working with research teams on projects that gave them a taste of the type of work undertaken by new research economists.

In order to encourage diversity and openness in our recruitment process, we continued to look at our recruitment materials to ensure that they are accessible, to provide information to demystify the recruitment and interview process, and to advertise our vacancies widely, in line with our Equality, Diversity and Inclusion policy. For the third year in a row, we held our own virtual recruitment event designed to give prospective applicants an introduction to IFS and an opportunity to ask questions directly to researchers. Around 170 students attended the Zoom meeting, representing universities across the country.

IFS researchers and communications staff are involved in the Royal Economic Society initiative, #DiscoverEconomics, which aims to attract more women, students from minoritised ethnic groups and students from state schools and colleges to study the subject at university. IFS has also been working with a range of think tanks and social policy research organisations to run recruitment events aimed at minority and potentially disadvantaged groups. During the summer of 2023, we hosted four sixth-form students, via a programme run by the Nuffield Foundation to offer experience of quantitative research to young people from under-represented backgrounds.

disciplines. The aim is to focus on the policy implications of research carried out at the Institute. The day also includes a session with IFS researchers talking about their careers in order to promote both IFS recruitment opportunities and working as an economist in public policy more generally.

In 2023, we held five courses (2022: four) under the auspices of the Centre for Microdata Methods and Practice, a joint enterprise with University College London. We also ran two masterclasses (2022: two) and five workshops (2022: five). The courses were held online, and the other events in-person.

Governance

Strategic oversight

A senior team comprising the Director, Deputy Directors, Deputy Research Directors, and Heads of Finance and Operations (and ICT when needed) meets fortnightly, in-person or remotely, to coordinate and track progress on governance issues and matters relating to staff, the research programme and finances. A wider management group – comprising the above group and all research team leaders and the heads of communications and research services – meets approximately six times a year in order to ensure that issues relating to individual projects and staffing are picked up.

Staff welfare and working practices

The organisation’s policy on home working has remained the same since the resumption of office working after the pandemic: staff are based mostly in our offices, but with the opportunity for some home working for many roles.

The organisation has continued to monitor, and implement policies to safeguard, staff mental health. We are also gauging attitudes to equality, diversity and inclusion amongst staff and introducing discussions of key issues around the running of the organisation at all-staff meetings.

Technology review

We carried out a thorough review, with the help of external experts, on our ICT infrastructure and use of technology. Over the coming years, IFS will be updating many of its internal systems, to ensure that cutting-edge technology can be harnessed for our research, in particular for analysis of data; to improve efficiency of everyday working practices; and to increase data security measures across all areas of the operation.

Each year, IFS holds a day of talks on issues in public economics of interest to undergraduates in economics and related

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2023 in numbers

IFS impact in 2023

46

top five journal articles past decade (2014–23)

131

top field journal articles past decade

144

front pages (259 in 2022; 165 in 2021)

304 press interviews (492 in 2022; 249 in 2021)

206

Hansard mentions (216 in 2022; 149 in 2021)

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Academic and policy 2023 2022 2021 2020 2019
publications and events
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Academic and policy
publications and events		 2023 2022 2021 2020 2019
Journal articles 82 81 48 39 34
Top fve* 6 3 3 3 3
Top feld journals† 11 21 13 9 7
Working papers 72 105 67 73 64
IFS reports and briefng
notes		 70 55 44 63 44
Comments◊ 95 79 42 43 35

† Journal of Health Economics, Journal of Labor Economics, Journal of Human Resources, Review of Economic Dynamics, Journal of Public Economics, Journal of Econometrics, RAND Journal of Economics, Review of Economics and Statistics, Journal of Economic Literature, Economic Journal, Journal of the European Economic Association, European Economic Review, Journal of Monetary Economics, Quantitative Economics

§ A new research information platform for tracking publications has made it possible to discover a greater number of publications by staff and associates.

◊ The 2022 and 2023 figures are for Comments, a new format that replaces the former categories Observations, newspaper articles and blogs. Figures for earlier years are for Observations only.

Type 2023 2022 2021 2020 2019
Press releases 107 100 56 62 32
Newspaper articles and
comment pieces		 41 41 35 35 61
Broadcast mentions 6,694 14,193 6,969 5,952 8,492
Print mentions 2,955 3,663 3,189 3,268 3,272
Front pages 144 259 165 218 129
Online mentions 26,058 30,191 19,771 15,851 20,479
Interviews given 304 492 249 282 180
Website visitors 1,464,381 1,537,145 1,243,755 1,270,998 710,570
Twiter/X impressions
(monthlyaverage)		 1,210,917 1,310,083 1,361,750 837,500 738,000
IFS events 43 45 49 46 40
Event atendance 6,702 5,955 5,821 6,909 3,900
Views of event videos 28,300 32,300 28,500 53,000 N/A
Hansard mentions 206 216 149 186 165
Evidence given 21 17 12 15 9

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Priorities for 2024 and beyond

Academic excellence

As mentioned above, the ESRC Centre for the Microeconomic Analysis of Public Policy (CPP) at IFS has received funding for five years, starting from October 2020. CPP will continue to underpin the full research programme at IFS, as well as supporting postdoctoral researchers and PhD students to work at the Institute and collaborate with researchers.

Key new research grants for 2024

A number of the research programmes mentioned above will be continuing into 2024 and beyond. In addition, the following specific new projects are already funded and due to begin during the year.

Transforming justice: the interplay of social change and policy reforms

A well-functioning justice system underpins an inclusive society and trust in the state. It serves as a cornerstone of the welfare state, ensuring rights underpinning economic security. The justice system in England and Wales has been transformed over the last decade through large-scale reductions in funding and a sequence of major procedural reforms. Despite the scale of change, there has been limited economic and quantitative analysis of impacts on access to justice, pathways through the justice system and wider effects on well-being for those experiencing the justice system. This reflects the underdeveloped state of economic, quantitative and evidencebased approaches to studying the justice system.

With funding from the Nuffield Foundation, this large-scale programme will go a long way to filling that gap, representing and leading a step change in how the justice system is understood. It will do so through an integrated set of research projects that will advance, using quantitative and economic analysis of new administrative datasets, our understanding of the consequences of changing demands for justice, access to justice, the effectiveness of the justice system, and impacts on the well-being and wider life chances of those experiencing the justice system. It will analyse how significant reforms to the procedures and funding of the justice system have affected actors within it, such as the police, prosecutors, legal representatives and courts. It will also investigate how the demands of individuals and families on the justice system have changed due to pressures originating from outside the system itself.

Led by Professor Imran Rasul, the project aims to develop a depth and breadth of expertise on justice within IFS, and with

partner institutions, such that there is a group of independent experts who can support, challenge and communicate about developments in justice policy and spending in the public domain. Just as, over the past two decades, we have developed such capacity in education, childcare and health, we aim to do so in the justice domain.

IFS has a long track record of using economic analysis to shape public debate and economic policy, and this programme will leverage its communication capacity and expertise to ensure our research shapes justice policy debates and priorities in the coming years. We will undertake a coordinated set of impact and engagement activities, working with policymakers and other relevant stakeholders.

The programme will build a cadre of researchers from across disciplines to tackle issues related to the justice system. It will do so by training legal researchers interested in employing economic and quantitative methods, and educating non-lawyers about the opportunities for empirical legal research. The programme will also advocate for further development of the data infrastructure related to the justice system itself. Ultimately, the programme will seek to drive cultural change, ensuring that economic and quantitative methods are better represented within the study of the justice system.

Causes of unhealthy body weight

Through a consortium led by UCL, IFS researchers have been working with the government for the past six years, providing evidence about what it is like to live with an unhealthy body weight (over- and under-weight) and testing strategies that can help.

With funding from the National Institute for Health and Care Research, we will continue working with the government, with a revamped and innovative team of world-class researchers from a wide range of backgrounds. We will use a mixture of methods and will work with individuals, communities and ‘big data’ to understand the causes of unhealthy weight and find solutions that work.

The aim is to understand how health and community settings, and life circumstances (such as age, income and ethnicity), may lead to people developing and suffering from unhealthy weight. Researchers will respond quickly and work flexibly with government departments to ensure our research meets the needs of policymakers in this area.

NHS workforce

The National Institute for Health and Care Research has launched a new set of Policy Research Units to undertake research to inform decision-making by government and

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arm’s-length bodies. King’s College London is hosting the Policy Research Unit in Health and Social Care Workforce, in partnership with IFS, the London School of Economics and the University of Salford.

Of every 100 people working in England today, 13 of them work in health and social care jobs. Nearly £2 out of every £3 spent on the NHS goes on paying its staff. The Health and Social Care Workforce Policy Research Unit aims to help government by providing the answers to the workforce questions that affect both the quality and cost of health and social care services.

Researchers from the partner institutions will work as a Unit on a set of research questions agreed by government (the Department of Health and Social Care and its partner organisations). In particular, IFS research will focus on analysing recruitment and retention, using workforce administrative records, such as the Electronic Staff Record (ESR), and HR records from individual Acute Trusts.

UK general election

In preparation for the expected general election in 2024, IFS has secured funding from abrdn Financial Fairness Trust and the Nuffield Foundation, for researchers to engage with political parties and respond to policy proposals around living standards, taxes, benefits and public services crucial for those on low and middle incomes.

The aim is to promote good policymaking and informed debate in the run-up to the election. With living standards suffering,

taxes rising and public services under strain, fiscal and economic policies will be central to the upcoming election campaign. The election itself promises to be a highly significant one, coming as it does after the UK’s departure from the EU, the dislocation of the pandemic and the fallout from Russia’s invasion of Ukraine: the UK is not short of policy challenges in dire need of attention.

On too many occasions, across too many policy areas, the UK has ducked the big challenges and failed to face up to difficult choices and trade-offs. The upcoming election campaign is an opportunity to debate realistic policy options that stack up to the scale of the challenges at hand. There will be a longer run-up to the coming election than in 2017 or 2019, allowing for greater discussion and debate of the issues. During this period, there will be intense demand from the media and others for rigorous, evidence-based and demonstrably independent analysis of key policy issues in areas such as the public finances, living standards, working-age benefits, taxation and public services.

Members of the public will be seeking the tools to challenge and judge politicians and their promises. There will also be demand from the political parties themselves, as they seek to build an evidence base to inform their plans for government. IFS is in a unique position to fulfil this role. Through a wide set of outputs (including a dedicated website, press briefings, podcasts, public events, broadcast interviews, interactive online tools, and policy reports), we will raise the standard of debate. Through private meetings with senior MPs and their advisers, we will improve the quality of the policies put forward.

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Communication and stakeholders

As an institute, our overarching aim is to conduct wide-ranging, high-quality microeconomic research to help inform evidencebased policymaking and improve the quality of public scrutiny and debate at local and national levels. Strengthening and extending our knowledge exchange and impact strategies and encouraging learning, development and innovation are therefore key to our success.

We will build on experiences during remote working to increase and improve the digital and online aspects of our communications strategy, even after a general return to office working. This will allow us to reach a wider audience.

Capacity building

As mentioned above, our aim is to train and develop research and support staff at all career stages.

We took on 12 new researchers in 2023 who will be trained and developed over the year. In the autumn of 2024, at least three new graduates will start work at IFS and will be trained in research and communication skills, working alongside more experienced researchers and Research Fellows and Associates, who are leaders in their fields from universities in the UK and overseas.

The Institute will also host a number of graduate students, who will work on PhDs under the supervision of senior staff, working alongside researchers whose research interests they share. The specific expertise of these individuals will feed into related research programmes and will enrich the knowledge of colleagues through frequent seminars and interchange of views. The students themselves will benefit from the stimulating intellectual environment at IFS and they are likely to go on to research or teaching posts in the future, where they will be able to apply what they have learned. We will also be offering annual placements for PhD students of between six months and a year, with the aim of enriching their PhD studies with policy research experience and allowing them to expand their networks.

Over the summer, we will host between six and eight economics students in paid internships. The students will work on projects with IFS researchers to give them a flavour of what policyrelevant research is like. We will also host work experience students in collaboration with the STEM Learning, as part of our commitment to diversity. Throughout our recruitment process, we will continue to look for ways to encourage diverse applicants to apply and to recruit staff from a range of backgrounds. We have developed a new Equality, Diversity and Inclusion policy, which feeds into our recruitment strategy.

We plan to take on a further one or two postdoctoral fellows from September 2024 on one- or two-year contracts, as well as an additional one-year placement for a postdoctoral researcher at a UK institution, with funding from the ESRC to increase the skills and policy understanding of early-career researchers.

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Strategic Report

Financial review

The results for the year ended 31 December 2023 are presented in the statement of financial activities on page 29. Before net gains on investment, IFS surplus was £505,431 (2022: £428,782). This was primarily driven by a surplus on membership and donations/raising funds (£254,585) and investment (deposit) income (£124,215). Broadly speaking, research broke even financially for the year, with the overall deficit on restricted research funding (£328,138) being offset by the surplus in unrestricted research funding (£325,394).

The external high-inflation environment saw expenditure increase in total by £914,750 in the year, to £9,661,499 (2022: £8,746,749). This continued to adversely impact recovery on our long-term restricted funding (typically fixed in size), with

loss on restricted research funds in the year discussed above highlighting that.

Unrealised net gains on IFS’s investment with CCLA of £208,639 for the year meant net income overall for the year was £714,070. Despite this, because of the rise in the overall cost base, General Fund reserves cover only increased marginally from 6.05 months to 6.26 months – remaining at the six-month target set by the Board of Trustees.

The Institute attempts to raise its research funds from a range of organisations so that it is not dependent upon a single source of funding. Although 46% of the income recognised in 2023 was provided by the Economic and Social Research Council (43% in 2022), this funding covers a wide range of projects and IFS continues to submit applications to new funders to widen the funding base.

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2023 2023 2023 2022 2022 2022
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2023 2023 2023 2022 2022 2022
Unrestricted Restricted Total Unrestricted Restricted Total
Cash and cash equivalents 2,409,963 3,051,387 5,461,350 4,201,549 2,410,123 6,611,672
Less net grants received in advance (202,787) (2,256,814) (2,459,601) (386,638) (1,923,841) (2,310,479)
Cash holdings (excluding net project
grants received in advance)		 2,207,177 794,573 3,001,750 3,814,911 486,282 4,301,193
Other working capital (436,097) (794,573) (1,230,670) (163,002) (486,282) (649,284)
Investments 2,637,421 - 2,637,421 - - -
General Fund 4,408,501 - 4,408,501 3,651,909 - 3,651,909
No. of months of forecast expenditure
(excluding direct project costs)		 6.26 - 6.05 -
Target level for the General Fund: (6
months’ forecast expenditure, excluding
direct project costs)		 4,226,788 - 3,624,418 -
General Fund 4,408,501 - 4,408,501 3,651,909 - 3,651,909
Fixed Asset Fund 62,800 - 62,800 58,819 - 58,819
Intangible Asset Fund 81,379 - 81,379 127,882 - 127,882
Total reserves 4,552,680 - 4,552,680 3,838,610 - 3,838,610

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Reserves policy

The reserves policy is twofold: one, to hold funds for working capital purposes and as a contingency, should sufficient new funding not emerge or should existing contracts be cancelled; and two, to reflect the net book value of fixed and intangible assets.

In response to the significant impact of inflation on IFS’s reserves, in November 2022 the Board of Trustees approved an investment of £2 million into CCLA’s COIF Charities Investment Fund and established an Investment Committee to oversee performance. The purpose of the investment was defined as maintaining the real value of reserves as a whole over a 15- to 20-year time frame.

Following this initial investment, the Investment Committee also decided to annually consider to what extent to adjust the amount in the investment fund, particularly in light of the previous year’s financial surplus. Assurance around the impact any further investment would have on reserves would be provided by the Audit Committee. In August 2023, it was decided to invest 2022’s surplus of £428,782 in full.

As at 31 December 2023, the unrealised net gain on this investment was £208,639.

As at 31 December 2023, the Institute’s total reserves were £4,552,680 (2022: £3,838,610), comprising the unrestricted General Fund of £4,408,501 (2022: £3,651,909), the unrestricted Fixed Asset Fund of £62,800 (2022: £58,819) and the unrestricted Intangible Asset Fund of £81,379 (2022: £127,882).

The General Fund reflects the Institute’s net current assets and is considered to be the amount of reserves that could be easily converted to cash, should the need arise. The target is for the General Fund to be maintained at a level to cover up to six months’ expenditure (excluding direct project costs). The Trustees wish to continue to raise modest surpluses so that the General Fund meets this target.

The Fixed Asset Fund was established in 2010 such that this fund would be equivalent in value to the net book value of the Institute’s fixed assets. The value of IFS fixed assets was £4k higher at year-end than at the beginning of the year. The reserves policy is subject to active review in the light of prevailing circumstances.

The Intangible Asset Fund comprises IFS’s investment in a new website, launched in 2022, which is being paid for out of the General Fund. Now the site has been launched, the value

of the asset, and this fund, will reduce on a straight-line basis over three years.

Principal risks and uncertainties

The Board of Trustees has overall responsibility for ensuring that the Institute has appropriate systems of control, both financial and operational. These systems are designed to provide reasonable, but not absolute, assurance against material misstatement or loss. The Audit Committee reviews IFS’ internal controls in detail and advises the Board where necessary.

During the year, the Board of Trustees continued to review the major financial and operational risks facing the Institute. This is done through regular review of movements in the risk register at Board meetings. The Audit Committee also regularly reviews the IFS risk register and receives detailed analysis of major risks, advising the Board where appropriate. Key organisational risks normally become a standing item at both meetings so that regular updates can be provided.

The key risks that have been considered by the Board of Trustees in 2023 are:

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Going concern

IFS has modelled and stress-tested its cash flows and this work concluded that it will have sufficient liquid resources (cash and investments that can be converted to cash) to continue to operate for at least 12 months from the date of approval of these financial statements. The Board of Trustees have reviewed this work and are happy with the methodology and conclusions. They thus remain of the view that there are no material uncertainties that call into doubt IFS’s ability to continue. The financial statements have therefore been prepared on the basis that IFS is a going concern.

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Governance and management

Constitution

The Institute for Fiscal Studies (IFS) was incorporated by guarantee on 21 May 1969. It is a private company limited by guarantee and has no share capital. It is a registered charity. The guarantee of each Company Law member (‘Member’) is limited to £1. The governing document is the Memorandum and Articles of Association of the Company and the members of the Board of Trustees are the Directors of the Company and the Trustees.

Company Law members consist of the IFS Council members. At the end of November 2023, the number of guarantors was 49 (50 at the end of November 2022), five of whom were elected by the IFS members. The Articles contain the provision that the IFS Council be expanded to no more than 50 persons and that it shall consist of 45 members elected by Council and five members elected by the wider IFS membership.

Members of the Board of Trustees

The Board of Trustees is established by the IFS Council: Trustees are elected by the Council from among themselves, and consist of at least seven and no more than twelve people, one of whom is the President of the Council. Trustees serve three-year terms, and will usually only serve a maximum of three terms. The Board of Trustees met five times during the year. Committee membership during 2023 was:

Investment Committee was formed in 2023. The remits and memberships of the committees are as set out below.

Audit Committee

The Audit Committee’s overall objective is to give advice to the Board of Trustees on:

Membership during 2023: Jonathan Athow, Peter Kane, Caroline Mawhood* (Chair)

IFS staff attending: Carl Emmerson (Deputy Director), Slav Sikora-Sikorski (Head of Finance)

Nominations Committee

As part of the organisation’s governance review (see below), the Board of Trustees set up two subcommittees during 2019 to help improve scrutiny of the Institute’s operations – a Nominations Committee and an Audit Committee. An

The Nominations Committee’s objectives are:

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deemed necessary;

Membership during 2023: Frances Cairncross§, David Gregson, Orna NiChionna, Michael Ridge*¥ (Chair)

IFS staff attending: Carl Emmerson (Deputy Director), Emma Hyman (Head of Operations)

IFS staff attending: Slav Sikora-Sikorski (Head of Finance)

Induction and training of Trustees

New Trustees receive training and induction following their appointment. Trustees are kept up-to-date with IFS research by a rolling programme of research presentations made at each meeting of the Board of Trustees.

Investment Committee

The Investment Committee’s objectives are:

Remuneration policy

Membership during 2023: David Gregson, Peter Kane (Chair), Orna NiChionna*

The salary of the Director is determined by the Board of Trustees when renewing his contract and is normally increased each year by a cost-of-living adjustment, in line with salaries across the Institute. The pay of all other staff is reviewed annually by the Director and, where appropriate, other members of senior management and is also usually increased by a cost-of-living adjustment. From time to time, IFS salary scales are benchmarked against comparable organisations. In 2023, the services of the Research Directors, Rachel Griffith, Fabien Postel-Vinay and Imran Rasul, were provided by the University of Manchester (Griffith) and UCL (Postel-Vinay and Rasul) under contracts that reimburse the universities for an agreed percentage of the individual’s salary, National Insurance and pension costs. Further details on these amounts are included in note 8 to the accounts.

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Organisational structure of the Institute and the decision-making process

The overall management of IFS is carried out by the Director, Paul Johnson, who reports to the Trustees on a quarterly basis. The Director is part of the senior management team of the Institute, which also comprises the Deputy Directors, Carl Emmerson, Robert Joyce and Helen Miller, the Deputy Research Directors, Monica Costa Dias and Sonya Krutikova, and the Research Directors, Professors Rachel Griffith, Fabien PostelVinay and Imran Rasul.

The Board of Trustees delegates the operational responsibilities of the Institute to the Director of the Institute via a ‘Scheme of Delegation’, and he in turn delegates various duties to senior staff.

In 2023, the Institute employed directly an average of 80 (2022: 73) full- and part-time staff usually based at its office in Ridgmount Street, London. Research staff are divided into sectors, and administrative staff provide support facilities.

The Institute also employed indirectly 10 (2022: 12) senior academic staff based at UK universities on a part-time basis. In addition, a number of other academics from both UK and overseas institutions work with the staff as Research Fellows and Research Associates on an ad hoc collaborative basis.

Charity Governance Code

In July 2017, the new Charity Governance Code was published setting out recommended practice. The Board of Trustees is supportive of the principles set out in the code and is keen to ensure that these are built into the governance of the organisation. To this end, during 2019, Trustees carried out a detailed review of its governance policies and procedures with reference to the code and agreed on a plan to put in place measures to comply where appropriate. The plan is now being implemented.

The Committee noted the updates made to the governance code in 2020, relating to integrity and to diversity. Integrity has always been central to the values of the Institute and a sine qua non for staff, Trustees and collaborators. The Trustees are satisfied that their procedures are in keeping with the revised code and are appropriate to uphold integrity to a high standard.

In the light of updated principles relating to diversity and inclusion, the Nominations Committee has considered these criteria when looking at the make-up of the Board of Trustees and of the Council. In particular, the Trustees are delighted that they have been able to increase both gender and ethnic diversity on the Council, a step that was much needed and a trend that they will strive to continue.

Statement of policy on fundraising

Section 162A of the Charities Act 2011 requires us to make a statement regarding fundraising activities. We do not undertake widespread fundraising activities with members of the public, although we do accept donations or offers from partners to contribute to work that we undertake. The legislation defines fundraising as ‘soliciting or otherwise procuring money or other property for charitable purposes’. Such amounts receivable are presented in our accounts as ‘donations and legacies’. We do not use professional fundraisers or ‘commercial participators’ or any other third parties to solicit donations. We are therefore not subject to any regulatory scheme or relevant codes of practice, nor have we received any complaints in relation to fundraising activities.

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Trustees’ responsibilities

The Trustees are responsible for preparing the Trustees’ annual report and the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland ).

Company law requires the Trustees to prepare financial statements for each financial year. Under company law, the Trustees must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the charity and of the incoming resources and application of resources, including income and expenditure, of the charity for the year. In preparing those financial statements, the Trustees are required:

The Trustees are responsible for keeping adequate accounting records that are sufficient to show and explain the charity’s transactions, to disclose with reasonable accuracy at any time the financial position of the charity and to enable them to ensure that the financial statements comply with the requirements of the Companies Act 2006. They are also responsible for safeguarding the assets of the charity and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

So far as each of the Trustees at the time the report is approved are aware:

The Trustees are responsible for the maintenance and integrity of the corporate and financial information included on the charity’s website. Legislation in the UK governing the preparation and dissemination of the financial statements and other information included in annual reports may differ from legislation in other jurisdictions.

Approved and authorised for issue by the Board of Trustees and signed on their behalf by

Michael Ridge

Chair of Trustees

23 May 2024

Company registered number: 00954616

Registered Charity: 258815

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Auditor’s report

INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF THE INSTITUTE FOR FISCAL STUDIES

Opinion

We have audited the financial statements of Institute for Fiscal Studies (‘the company’) for the year ended 31 December 2023 which comprise the Statement of Financial Activities, the Summary Income and Expenditure Account, the Balance Sheet, the Cash Flow Statement and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including FRS 102 ‘The Financial Reporting Standard Applicable in the UK and Republic of Ireland’ (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the audit of the financial statements section of our report. We are independent of the charitable company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions related to going concern

In auditing the financial statements, we have concluded that the Trustees’ use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the charitable company’s ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

Our responsibilities and the responsibilities of the trustees with respect to going concern are described in the relevant sections of this report.

Other information

The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. The trustees are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of the audit:

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Matters on which we are required to report by exception

In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the trustees’ annual report.

We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:

Responsibilities of trustees

As explained more fully in the trustees’ responsibilities statement set out on page 25, the trustees (who are also the directors of the charitable company for the purposes of company law) are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the trustees determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the trustees are responsible for assessing the charitable company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the trustees either intend to liquidate the charitable company or to cease operations, or have no realistic alternative but to do so.

Auditor’s Responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

As part of an audit in accordance with ISAs (UK) we exercise professional judgement and maintain professional scepticism throughout the audit. We also:

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

Explanation as to what extent the audit was considered capable of detecting irregularities, including fraud

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities,

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outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below.

The objectives of our audit in respect of fraud, are; to identify and assess the risks of material misstatement of the financial statements due to fraud; to obtain sufficient appropriate audit evidence regarding the assessed risks of material misstatement due to fraud, through designing and implementing appropriate responses to those assessed risks; and to respond appropriately to instances of fraud or suspected fraud identified during the audit. However, the primary responsibility for the prevention and detection of fraud rests with both management and those charged with governance of the charitable company.

Our approach was as follows:

There are inherent limitations in the audit procedures described above. We are less likely to become aware of instances of non-compliance with laws and regulations that are not closely related to events and transactions reflected in the financial statements. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.

Use of our report

This report is made solely to the charitable company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the charitable company’s members and trustees those matters which we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to any party other than the charitable company, the charitable company’s members, as a body, and the charity’s trustees, as a body for our audit work, for this report, or for the opinion we have formed.

James Saunders (Senior Statutory Auditor)

for and on behalf of Moore Kingston Smith LLP, Statutory Auditor

9 Appold Street London EC2A 2AP

Moore Kingston Smith LLP is eligible to act as an auditor in terms of Section 1212 of the Companies Act 2006.

28 May 2024

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Trustees, Report | 2023 Financial reports Statement of financial activities Year ended 31 December 2023 2023 2023 2022 Unrestrieted Restricted Total Total Income from.. Donations and legaeies Charitable activities 349,819 1.421,454 124,215 129.375 349,819 9,563,521 124,215 129.375 305.620 8,142,067 8,653,319 22,341 194,251 Investment income Other income Tot81 income 2.024.863 8.142.067 10.166.930 9,175,531 Expenditureon- Raising funds Charitable activities 95,234 1.096.061 95,234 9,566,265 91.923 8.654,826 8,746.749 8,470,204 Tot81 expenditure 1.191.295 8.470.204 9.661.499 Net ineome before net gainson imiestment 833,568 1328.13n 505,431 428.782 Netgains on investment 208.639 208.639 Net incomeforthe year 1.042.207 1328.13n n4.070 428.782 Transfers between funds 15 1328,1371 328,137 Net movement in funds n4,070 n4,070 428,782 Reconciliation of funds- Total funds brought forward Total funds carried forward 16 3,838,610 4,552,680 3038,610 4,552,680 3,409,828 3,838,610 16 There were no other recognised gains or losses other than the net income forthe year. All amounts relate to continuing operations. Institute for Fiscal Studies 30

Trustees, Report | 2023 Balance sheet As at 31 December 2023 2022 Fixed assets Tangible assets Investments 10 62,800 58,819 2,637,421 Total fixed assets 2,700,221 58019 Intangible Assets 12 81379 127,882 Tot81 int8ngible assets 81.379 127,882 Current assets Debtors 13 1.809,490 4,047,049 1,683,373 Short-term deposits Cash at bank and in hand 1,255.269 1.414.301 7.270.840 8,295,046 5,356.403 Tot81 eurrent assets Liabilities: C￿d￿ors., amounts falling due within one year Net current assets 14 15.499.760) 14,643.13n 1.7n.080 3.651.909 Net assets 4.552.680 3,838,610 Tot81 funds.. Unrestricted funds General Fund 15 4,408,501 62,800 3.651.909 Fixed Asset Fund 15 58,819 127,882 Intangible Asset Fund 15 81,379 4.552.680 3,838,610 Restricted 15 Total 4,552,680 3,838,610 Approved and authorised for issue bytheTrustees and signed on their behalf by Michael Ridge,Chair ofTrustees Company registered number.. 00954616 Registered Charity.. 258815 23 May 2024 Institute for Fiscal Studies 30

Trustees, Report | 2023 Statement of cash flows Year ended 31 December 2023 2022 Reconciliation of net incometo net cash flowfrom operating activtties Net income lor the reporting period las perthe Statementof Financi8lActivrtiesl Adjustmentsfor. Depreciation charges AMort￿allOnChurgeS Investment ineome n4,070 428,782 38,220 46.503 40,903 11,626 122,3411 1124.%51 1208,6391 1126,1151 (Gains) on investments Ilncreasel in debtors and aeerued income 493,428 Increase in creditors and acerued expenses Increase in grants received in advance of expenditure 661,879 82,815 51,378 194,743 NetC8sh (expended onllgener8ted from operating activities 1,196,446 1,086,590 Interest on investments 124.215 22,341 171,3271 137,3461 Purchase of intangible assets Purchase of tangiblefixed Assets Purchase of investments 142,2011 12,428,782) 12.346.768) Cash flowsfrom investing activities 186.3311 Change in c8sh and cash equivalents in the reporting period Cash and eashequivalents atthe beginning olthe reporting peThod Cash and eash equivalents at the end ofthe reporting period 11.150,3221 1.000.259 6,611,672 5,611,413 5.461,350 6.611.672 An8lysisof cash and cash equivalents 2023 2022 Short-term deposits Cash at bank and in hand 4,047,049 1,255,269 1.414.301 5,356,403 Total cash and cash equivalents 5.461,350 6,611,672 No netdebt reconciliation has been presented asthe Institute has no borrowings or external debt. Institute for Fiscal Studies 30

Trustees, Report | 2023 Notes to the accounts l. Accounting policies The principal accounting policies adopted,judgements and keysources of estimation uncertainty in the preparation olthe financial statements are asfollows.. depreciated over five years and all other assets depreeiated over three years. Assets a￿ written off on a straight-line basis commencing from the quarter afterthe date of purchase. Where the length of any remaining lease is less than live years,then any refurbishment costs are depreciated up to the end of the year in whieh the lease comes to an end. al Basis of preparation The financial statements have been prepared in accordanee with Accounting and Reporting by Charities.. Statement of Recommended Practice applieable to charities preparing thein8ccounts in accordance with the Financial Reporting Standard applicable in the UK and Republie of Ireland IFRS1021- (Charities SORP IFRS10211, the Financial Reporting Standard applicable in the UK and Republic of Ireland IFRS1021 and the Companies Act 2006. cl Listed investments Investmentsrefersto single investment fund provided by a majorfund manager in the charity sector. Purchases are initially recognised attheir transaction value and subsequently measured at theirfairvalue as atthe balance sheet date using the elosing quoted market price. Any change in lair value will be recognised in the statement of financial activities. Investment gains and losses. whether realised or unrealised, are combined and shown in the heading 'Net gains on investments. in the statement of financial activities. The charity does not acquire put options derivatives orothercomplex financial instruments. The Institute for Fiscal Studies meets the definition of 8 public benefit entity under FRS102, Assets and liabilities are initially recognised at historical cost or transaction value unless otherwise stated in the relevant accounting poliey notelsl. IFS has modelled and stres>tested itseash flows and this work concluded that it will have sufficient liquid resources leash and investmentsthai can be converted to cashl toeontinue to operate for at least12 months from the date of approval of these financial statements. The Board of Trustees have reviewed thiswork and are happy with the methodology and conclusions. They thus remain of the view thatthere are no material uncertaintiesthat eall into doubt IFS'S ability to eontinue. Thefinancial statements have therefore been prepared on the basis that IFS is a going eoncern. dl Intangible assets and amortisation All intangible assets capitalised are amortised over three yearsfnom the point when they are brought into actual use. e) Income-membership subscriptions and donations Membership income is deferred to the extent that it relates to services to be provided in future periods. Donations are credited to the statement ol financial activities at the date of receipt. bl Tangible fixed assets and depreciation All tangible fixed assets Costing more than ￿,000 lexeluding VATI are eapitalised and depreciated. Depreciation of fixed assets is calculated to write off the eost of each assetoverthe term of its estimated uselul fl Income- publications Royalty income receivable from the publisher of the IFS-ownedjournal, Fisc&l Studies, is recognised on an accruals basis and in aecordance with the substance of the publishing agreement. TheTrustees havedetermined that all costs relating to the refurbishment of the premises and any furniture be Institute for Fiscal Studies 30

Trustees, Report | 2023 g) Income- research activities Income from research activities is recognised when the Institute has entitlement to the funds, when it is probable thatthe income will be received and the amount can be measured reliably. m} Foreign currency The value of the balanees in the Institute's Euro and US Dollar aeeounts atthe end of the yeanwas based on the exchange rate as at 31 December 2023. Transactions in foreign eurrencies are calculated at the exchange rate ruling at the date ol the transaction and Instituttrwide foreign exchange gains or losses made during theyear are taken into account in arriving atthe net ineomefor the year. The Institute is usuallyentitled to research income in Stages over the course ol a project. subject to perforManc&￿1&ted conditions requiring a particular level of service onoutput, often approximating to when related expenditure is incurred. In such eases, research income is credrted to the statement of financial activities when it falls due to be received tothe extent that it is matched by related expenditure. n) Financial instruments IFS only hasfinaneial assets and financial liabilities of a kind that qualify as basie financial instruments. Basic financial instruments are initially recognised at transaction value and subsequently measured at their settlement value. Where donationsor grants are reeeived without perfOrManc&￿1&ted conditions, entitlement usually arises on receipt and research income is credited to the statementof financial activities when it falls due to be received. o) Critical accounting estimates and areas of judgement Preparation of thefinaneial statements requires some judgements and estimates to be made. The items in the financial statements wherejudgements and estimates are made include,. h) Interest and dividends receivable Intereston funds held on depositand dividends on investments areincluded when receivable and the amount can be measured reliably. judging the progress of multi-year research projects., estimating the useful economic lrfe of tangible fixed assets., estimating the useful economic life of intangible assets., and estimates relating to the allocation of support costs acrossexpenditureeategories. i) Allocation of expenses Direct and indirect expenses are included when incurred. The majority ol expenses are directly attributable to specific activities. Indirect overhead Costs le.g. premises and administration) are allocated on a basis consistent with the use ol the resource, usually on a pertapita basis. Irrecoverable VAT is Charged as a cost against the activity for which the expenditu￿ was incurred. p) Funds IFS maintainsthree internal funds, which include restricted and unrestricted funds. j) Pension costs The pension eost charge represents Contributions payable bythe Institute to employees, personal pension plans in respect olthe year. Unrestricted-General Fund.. these funds are derived from any unrestricted donations and grants received by IFS as well as from contracts for researchthatare unrestricted in natu￿. These are fundsthatean be used for any purwse within the charitable objects of IFS. k) Operating leases Leasing charges in respect of operating leases are Charged to the statement of finaneial activities as they are incurred. Unrestricted-designated Fixed Asset Fund.. this fund represents resourees set asideto coverfuture eapital expenditure. The value of this fund atthe yeatyend representsthe net book value of tangible fixed assets and intangible assets. l) Current asset investments- short-term deposits Current asset investments include eash on deposit and eash equivalents held lor investment purposes ratherthan to meet short-term cash eommitments asthey fall due. Restricted-research funds.. these funds represent grants and donations received to cover project expenditure on research projects. The restrictions are imposed bythe funder, usually with respect to the specific research projeet being undertaken. The nature of the portfolio of research grants and eontr8ets is sueh that in mosteases income and expenditure are closely matched. Institute for Fiscal Studies 31

Trustees, Report | 2023 2. Membership and donations 2023 2022 Corporate membership Individual membership 206,983 127,896 35,225 50,336 257,319 92.500 163,120 142,500 Other donations 349,819 305.620 Donations in the yeartotalling £620 were received from Trustees and their spouses. 3. Income from charitable activities IFS frequently collaborateswith universrties and other research organisations. The income classification below is based on the ultimate lunder of the research. 2023 2023 2023 2022 2022 2022 Unrestricted Restricted Total Unrestricted Restricted Total ESRC 52,869 4,389,217 4.442.086 3,860,644 3,860,644 1,977,239 1,989,540 Charitabletrusts and foundations 42,670 1,901,910 1,944.580 12,301 Government lor similarl Other organis8tions Event income 995,412 1,850,939 199,710 2,846851 199,no 865,589 1,553,009 2,418.598 228,904 48,311 49,958 57,363 286,268 48,311 49.958 84,273 46,5 Publications 46.521 1.421,454 8,142,067 9,563,521 1,205,064 7,448,255 8.653.319 IFS receives funds in the form of project grants, directly and indirectly,from the UK and other national governments. other governmental ageneies and international governmental bodies. These funds are tied to Specific researclFrelated activities in the course olthe standard eharitable activities of IFS. IFS does not receive any funding in the form of general government grants or assistance. Therefo￿, it is notfeltto be necessary, useful or practical to disclose further analysis within these accounts. 4. Investment income All investment income arises from money held in interest-bearing deposits. IFS reinvests all dividends and other income earned on its investment fund and sotakes no distributions tothe Statement ol Financial Activities. Institute for Fiscal Studies 32

Trustees, Report | 2023 5. Analysis of expenditure Total costs inelude paymentsto third partiesthat worktogetherwith IFS on particular projects. Where the Institute is the lead organisation, it receives funding from the grant4Jiving body for all participating organisations for onward transmission. Gro&% receipts are reflected in the Institute's revenues and, depending on the types of projeet undertaken, may varysignificantly from year to year. Total charitable activities Raising funds Governance eosts Support eosts 2023 Total 2022 Total Research eollatx)rations & subeontracts Data costs &dat8 collection Costs 1,288,098 1.288.098 1,322,836 322.039 322.039 282,549 IFS travel, aecommod8tion & subsistence Visrtor travel. accommodation & subsistenee 242.429 242.429 131,173 1,085 1,085 IBOOI Event. publication & dissemination costs Other direct costs Premises IT &officeeosts Other staff Costs Insurance & professional fees Other 465,303 52,529 517.832 328,565 106,080 106,080 43,955 834,242 834,242 656,897 339,527 339,527 274,115 108,342 108.342 128,317 123,040 159,811 133,120 65.834 65.834 48,228 1,523,513 3,985319 3,348,957 664.927 8T5.028 72.500 59,025 36,7n Total costs lexcL staff eosts} Staff costs luniversitiesl Research Fellows & Research Associates 2,425,035 664,927 72,500 36,Tn 737.427 3,736,949 737.427 934.053 3,787,977 3,461,084 528.734 411,427 IFS staff costs Iresearchl IFS staff costs levents & dissemination) IFS staff costs (research servieesl IFS staff costs Icentrall 28,169 42,312 22,859 486,422 9.200 174,790 18&990 172.003 2,703 82.384 20,563 414,786 438.051 419,224 43.422 1.075.998 4.938.753 4.463.739 3.736.949 Total staff costs lincl. Fellows & Assoeiatesl Tot81 expenditure Allocation of support costs (including governance) Total expenditure 4.474376 82.384 43.422 1.075.998 5.676.180 5397.792 6.899.411 2,666,853 82.384 12,850 80.193 2,599￿17 9.661.499 8.746.749 180,1931 12,599,511) 9,566,265 95,T34 9,661,499 8,746,749 Institute for Fiscal Studies 33

Trustees, Report | 2023 Analysis of expenditure 2022 Total eharitable activities Raising Governance funds costs Support 2022total costs Research collaborations and subcontracts 1,322,836 1.322036 Data eostsand data collection costs 282,549 282.549 IFS travel, accommodation and subsistence 131,173 131.173 Visitortravel, aeeommodation and subsistence 18001 18001 Event, publication and dissemination costs 281,948 46,617 328.565 Other direct costs 43,955 43.955 Premises 656,897 656.897 IT and office costs 274,115 274.115 Other staff Costs 128,317 128.317 Insurance and professional lees 44,435 88,685 134120 Other 48,228 48,228 Tot81 costs (excluding staff costs) 1061.662 44.435 1.242.860 3.348.957 Staff costs luniversitiesl 875.028 875,028 Research Fellows and Research Associates 59,025 59.025 934,053 934,053 IFS staff costs Iresearchl 3,412,051 27,478 21,555 3,461,084 IFS staff costs (events and dissemination) 31,110 380,318 411,427 IFS staff costs (research services) 17,200 154,803 172,003 IFS staff costs Icentrall 2,488 9,951 406.785 419.224 3,412,051 78,276 31,506 941.906 4,463.739 Total staff costs (including Fellows and Associates) 4346,104 78,276 31,506 941.906 5397,792 Totsl expenditure 6.407.766 78,276 75.941 2.184.766 8.746.749 Alloeation of support costs lineluding governance) Total expenditure 2,247,060 13,647 175,9411 12,184,T661 8,654,826 91,924 8,746,749 Institute for Fiscal Studies 34

Trustees, Report | 2023 6. Expenditure 2023 Unrestricted Restricted 2023 total 2022total Cost of raising funds Direct costs Imembership programmel Staff eosts Idirectl Support andgovernaneeeosts lallocationl 82.384 12,850 95,234 82.384 12,850 95,234 78,276 13,647 91,923 Charitable activities Project costs Staff costs Itotall Support and governanee eostslallocationl 119,607 764.865 211,588 1.096.061 2,305,428 4,828,931 1,335.846 8.470.204 2,425,035 5,593.796 1.547.434 2,061,662 5,319,516 1,273.647 8.654.826 9.566.265 Total expendiiure 1,191.295 8,470,204 9,661,499 8,746,749 2022 Unrestricted Restricted 2022 total Cost of raising funds Direct costslmembership programmel Staff costs Idirectl Support and governance costs lallocationl 78,276 78,276 13,647 13,647 91.923 91.923 Charitable activiiies Project costs Staff eosts Itotall Support and governance costs lalloeationl 137,736 1,923,927 2,061,662 683,181 4,636,335 5,319,516 1,273,647 163.573 1,110.074 984,490 7,670,336 8,654,826 Tot81 expenditure 1.076,413 7.670.336 8.746.749 IFS initially identifies the costsof its support functions. It then identifiesthe coststhat relate to governance. The remaining support eosts togetherwith the governance costs are apportioned between charitable activities and the eost of raising funds. The cost of raising funds includeseosts related to the IFS membership programme and costs related to activities focused on seeking funding.These include some direct costs and direct staff time, aswell as an allocation of support costs. Support costs are alloeated on the basis of staff time. Governance Costs include the costs of external audit. Other governance eosts relate primarity to Costs associated with the AGM and Annual Lecture and dinner. No expenses were claimed by theTrustees during the year12022.. £0). Institute for Fiscal Studies 35

Trustees, Report | 2023 7. Net income Net ineome is stated after charging.. 2023 2022 Depreciation Amoriisation 38,220 40,903 46.503 11,626 Auditor's remuneration Audit lees 24.750 39,000 Operating lease rentals-property 409,453 375,000 Audit lees are stated net of VAT and disbursements. 8. Analysis of staff costs and key management personnel 2023 2022 Wages and salaries Social securityeosts Pension costs 4,237,900 3,808,654 447,781 416,472 253,072 4,938,753 238.613 4.463.739 Comprising.. Researchers 3.787,977 3.461,084 Support staff IFS payroll staff 1.150.776 1.002.655 4,938.753 4,463.739 Staff costs luniversitiesl Research Fellow and Research Associate payments 664,927 72,500 875,028 59,025 5.676.180 5397.792 IFS has agreements in place with several universitiestinstitutionsfor the provision ol an agreed proportion of the working time Itypically 5-50%) of, during 2023, on average1012022..121 named, highly skilled individuals to carry out specifie research duties at IFS in their areas ol academic excellence. In 2023. £50,00012022.. £67.5001 of the amount lor Research Fellows and Research Assoeiates relates to these individuals. During 2023the Institute's senior management team included.. the Director, Paul Johnson, and the Research Directors, Professors Rachel Griffith Fabien Postel-vinay and Imran Rasul. In 2023, the total compensation for these key management personnel, including amounts dueto universities under eontraetual arran9ementsfor the provision ol an agreed amount of the Research Directors. time,was £571,18611.85 FTEI12022.. £530,93611.85 FTEII. Institute for Fiscal Studies 36

Trustees, Report | 2023 8. Analysis of staff costs and key management personnel (cont.) The numbersofemployeeswhose emoluments lexcluding pension contributions) were in excess of £60,000 are shown in the ranges below. In addition, pension contributions were paid bythe Institute on behalf ol these employees. The total sum olthese contributions was £185.631 (for 31 employeesl12022.. £133.566 lor 22 employees). 2023 2022 Number Number £60,001470,000 12 £70,OOFE80,000 £80,001-£90,000 £90,0014100,000 £100,00￿110,000 £1I0.OOk£120,000 £120,001-£130,000 £130,0014140.000 £230.001-£240,000 £250,OOP£260,000 22 9. Staff numbers 2023 FTE Average number 2022 FTE Average number Research staff Permanent eontraets 33.9 37.8 34.0 37.8 Fixe(Fterm contracts 12.9 16.3 11.8 Variabltrhourseontraets 58.6 54,1 Central staff Events, publications dissemination Finance, HR, IT. eentr81 support Research services 9.2 10.8 7.2 19.8 17.2 19.0 Total 68 80.4 61 Fulktime 54.3 50.3 Part-time 26.1 22.8 Institute for Fiscal Studies 37

Trustees, Report | 2023 10. Tangible fixed assets Fixtures and Office equipment improvements to short leasehold premises Total Cost At l January 2023 Additions 781,607 372,686 1.154,293 42,201 42,201 Disposals and assets no longer in use At 31 Deeember 2023 15,3991 15,3991 781,607 409,487 1,191,094 Depreciation At l January 2023 Charge forthe year Disposals and assets no longer in use At 31 December 2023 TT4.819 320,654 1,095,473 5,834 32.386 15,3991 347.641 38,220 15,3991 1.128.294 780.653 Net book value As at 31 December 2023 954 61.846 52.031 62.800 58.819 As Jt 31 December 2022 6,788 11. Investments 2023 2022 Fair value at the start of the year Additions at cost 2,428,782 Disposal pr(￿eedS Net gain in fair value 208,639 Fairvalue at the end of the year 2,637,421 At 31 December 2023 ihetotal investment holding was in CCLA'S COIF Charities Investment Fund Institute for Fiscal Studies 38

Trustees, Report | 2023 12. Intangible assets IFS website Total Cost At l January 2023 At 31 December 2023 139,508 139,508 139.508 139.508 AmortiS8tion At l January 2023 Charge forthe year At 31 December 2023 11,626 11,626 46,503 46,503 58,129 58,129 Net book value As at 31 December 2023 81.379 127,882 81.379 127,882 As at 31 December 2022 All contracted costs associated wrth the build of IFS'S new website, in linewith FRS102 requirements. 13. Debtors Unrestrieted Restricted 2023 2022 Accrued income 220,023 244,776 866,599 70.8n 1,086,622 315,647 1,040,999 Trade debtors 340,825 7,047 Other debtors 4,292 4,292 Prepayments 366,648 36,281 402,929 294.501 835,739 973,751 1,809,490 1.683.373 Institute for Fiscal Studies 39

Trustees, Report | 2023 14. Creditors Unrestricted Restricted 2023 2022 Amountsfalling due within one year Trade payables Taxation and social SeCu￿tY 355,473 129,598 91,806 447,279 129,598 206,955 110,011 57,387 VAT 41,942 561,079 41,942 1.334,n8 Aceruals 773,639 917,305 1,088,092 865,445 1,953,537 1,291,658 Deferred income Balance at l January 2023 Amount released to income 500.679 2,850,801 3,351,480 3800,101 1371.9251 12,705.9171 13,077,842) 13,034,422) 294,056 2,978,529 3,272.585 3,085,800 3851,480 Amount deferred in the year Balance at31 December 202 422,810 3.123.413 3.546.223 Total creditors.. amounts falling due within one year 1,510,902 3888058 5,499,760 4,643,137 As at 31 December 2023, total deferred income was £3.546.22312022.. £3,351,4801.This includes amounts received on multi-year projects,where the timing of the related expenditure may be more than12 months from the balanee sheet date.A proportion of this deferred income maytherelore not be released to income until 2025. Included in accruals is a provision for dilapidations of r833,41412022.. £138,106). The estimated futurecosts of dilapidationsare reviewed annually and adjusted as appropriate. Institute for Fiscal Studies 40

Trustees, Report | 2023 15. Analysis of movement in funds 2023 AtlJan 2023 Income Expenditure Net gains on investment Transfers At 31 Dec 2023 Unrestricted funds General Fund 3.651.909 2,024,863 11,191,295) 208,639 1285.6161 4.408,501 Fixed Asset Fund 58,819 127,882 3,981 146,5031 1328,13n 4,552,680 62,800 81379 Intangible Asset Fund 3,838,610 2P24063 11,191,295) 208,639 Restricted funds Research funds 8,142,067 18,4TO,2041 328,137 Total funds 3,838,610 10,166,930 19,661,4991 208,639 4,552,680 2022 At1 Jan 2022 Income Expenditure Transfers At 31 Dec 2022 Unrestricted funds General Fund 3,279,270 62,377 68,181 3.409.828 1,727,276 11,076,414) 1278,2241 13,5581 59,701 3,651,909 58,819 127,882 Fixed Asset Fund Intangible Asset Fund 1.727.276 11.076.414) 1222.0811 3.838.610 Restricted funds Researeh funds 7,448,255 17,670,336) 222,081 Totalfunds 3,409028 9,175,531 18,746,750) 3038,610 Amounts have been transferred from the General Fund to restrieted research funds to coverthe overall deficit arising on the restricted research grants that completed during the year. This deficit was driven primarily by the effectsol inflation on projects with multi-year budgets, and the lack of full overhead recovery on many of these projects. Institute for Fiscal Studies 41

Trustees, Report | 2023 Within restricted research funds are funds relating to projects wherethe agreement with the funder requests that the project funding is separatelydiselosed in thefinaneial statements. During 20Z3,the income and expenditure on these grants was as set out below. 20Z3 Project name Funder Start date End date 2023 Accrued/lDelerredl income income as 8t 31 Dec 2023 The Cernt￿ for TaxAnalysis in Foreign, Developing Countries-Phase 2 Commonwealth ITAXDEV111 & Development Office 11nM8 30104123 433,392 The Cernt￿ for TaxAnalysis in Foreign, Developing Countries-Phase 3 Commonwealth 01105123 31103130 735,278 307,641 ITAXDEV1111 & Development Office Taxation of Pensions abrdn Financial FairnessTrust 01107121 28/02123 47,218 Pensions Commission abrdn Financial FairnessTrusi 01101123 30106/27 149,104 1100.4661 General Election policy proposal abrdn Financial analysis FairnessTrust Evaluating theTwtrChild Limit UK 2040.. Options-Taxation and Public Finance 01101/24 31ll2/24 130.0001 Nesta 01112122 31103/24 59,834 140,1661 50,511 Nesta 01106123 30104124 60,511 2022 Project name Funder Siart date End date 2022 Accrued/lDelerredl income Income as at 31 Dec 2022 The Cernt￿ for TaxAnalysis in Foreign, Developing Countries-Ph8se 2 Commonwealth 31ll0122 1,033,938 355,746 ITAXDEV111 & Development Office Changing Patterns of Work in Later Life Centre lor Ageing Better abrdn Financial FairnessTrust 01106120 20108122 114,415 Taxation of Pensions 01107121 28102123 99.060 6.782 VocationalTraining, On the Job Massachusetts Training, and Resilienee to the Institute of Covi(P19 Shock Teehnology 01101/W 30106122 25,925 820 Institute for Fiscal Studies 42

Trustees, Report | 2023 16. Analysis of net assets between funds 2023 2023 2023 2022 2022 2022 Unrestricted Restricted Total Unrestricted Restricted Total Tangiblefixed assets Investments 62,800 62,81)0 58,819 58,819 2,637,421 81379 2,637,421 81.379 Intangible assets Cash at bank and in hand 127.882 127.882 2,409,963 3,051,387 5.461,350 4,201,549 2,410.123 6.611,672 Net current assetsllliabilitiesl Netassets at 31 December 1638,8841 13,051,387) 13,690,2ni 4.552.680 4.552.680 1549,6401 12,410,1231 12,959,763) 3,838,610 3,838,610 17. Operating lease commitments The total offuture minimum lease payments under noTFeancellable operating leases is set out below loreach of the following periods. 2023 2022 One year Two to fiveyears 375,000 375,000 179,795 554,795 18. Pension scheme The total pension costto IFSforeontributionsto employees, pension schemes under IFS'S group personal pension plans with Scottish Widows was £238.05412022.. £223,853). In addition, two members ol staff12022.' two) participated in other personal pension schemes. oltheir own ehoiee.to which the Institute Contributed £15.018 12022.. £14,650) 2023 2022 Scottish Widows 238,054 223,853 14,650 Other 15,018 253,072 238,503 19. Related party transactions None Institute for Fiscal Studies 43

Trustees, Report | 2023 20. Comparative information: Statement of financial activities for the year to 31 December 2022 Year ended 31 December 2022 2022 2022 2021 Unrestricted Restricted Total Total Income from.. Donations and legacies Charitable aetivities 305.620 1,205,064 22,341 194,251 1.727.277 305.620 8.653,319 22,341 194,251 9.175531 123,537 8,64T,483 704 7,448,255 Investment income Other income Tot81 income 7.448.255 8.7n.724 Expenditureon: Raising funds Charitable activities 91,923 984,490 1,076,413 91,923 8,654,826 8,746,749 57,140 8,418,979 8,4T6,119 7,670,336 7,670,336 Total expenditure Net income 650063 1222,0811 428,782 295,605 Transfers between funds 1222,0811 222,081 Net movement in funds 428,782 428,782 295,605 Reconciliation of funds- Total funds brought forward Total funds carried forward 3,409028 3,838,610 3,409028 3038,610 3,114,223 3,409,828 There were no other recognised gains or losses other than the net income forthe year. All amounts relate to continuing operations. Institute for Fiscal Studies