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This is the first chapter we have published from this year’s IFS Green Budget, funded by @nuffieldfoundation.org and in association with Barclays. We will have lots more interesting chapters published in the coming weeks! [9/9]

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We make a number of recommendations that we think could improve the transparency of the OBR process, and in some cases, its accuracy. It’s a complex and nuanced topic, so I highly recommend reading the full report if you are interested. ifs.org.uk/publications... [8/9]

ifs.org.uk

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In the report, we examine how the OBR accounts for the impacts of changes in migration policy, and then how it accounts for the impacts of migration on its tax and spending forecasts, including the large differences between different types of migrants [7/9]

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Given its fiscal and economic impacts, migration is an important component of the OBR’s forecasts. It is very possible that changes in migration could play a role in the amount of ‘headroom’ the government has against its fiscal rules at this Budget. [6/9] bsky.app/profile/nick...

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Migration policy changes can have big economic effects. This chart shows illustrative estimates of the effects of these 3 policies on GDP. These could have been larger than any of the high-profile ‘supply-side’ policies since 2023, inc planning reform and childcare subsidies. [5/9]

Chart showing the possible supply-side impacts of migration and non-migration policies

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Lots of this has been driven by big changes in immigration policy in the last 6 years, including policies like the visa route for Hong Kongers in 2020, restrictions on international student routes in 2023 and restrictions on Skilled Worker visas in 2025 [4/9]

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There have also been big changes in composition, with most immigration now from outside the EU. International students and dependents made up almost half of non-EU immigrants in 2025, while workers and their dependents made up another quarter, and asylum seekers ~15% [3/9]

Chart showing changes in non-EU+ immigration routes since 2019

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There have been large changes in estimates of both immigration and emigration in recent years, with a large rise and subsequent fall in net migration, the difference between the two. Latest Home Office visa data suggests immigration estimates could continue to fall [2/9]

Chart showing changes in immigration and emigration since 2012

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Nick Ridpath @nickridpath.bsky.social · 10/09/2026

We have a new report out today taking a deep dive into how migration and its fiscal impacts feed through the OBR’s public finance forecast. A short thread on why this matters [1/9]

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Reposted by Max Warner

Migration could be quite important at this year’s budget, as falling migration feeds through into the OBR’s forecast and the government’s “headroom” against its fiscal rules. Given this, a thread on how migration affects the public finances:

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Early last year, Wes Streeting and NHS England declared a ‘fundamental reset’ of the NHS financial regime. In a new @theifs.bsky.social comment, funded by @nuffieldfoundation.org, we show that a big NHS budget top-up was avoided in 25-26. So how was this achieved and what does it mean going forward?

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Is the era of annual NHS top-ups over? | Institute for Fiscal Studies

This is the first output from @theifs.bsky.social Green Budget this year, which is funded by @nuffieldfoundation.org and produced in association with Barclays. I’m also very pleased to be an editor of the Green Budget this year! ifs.org.uk/articles/era... [12/12]

ifs.org.uk

For the first time in over a decade, the NHS broadly stuck to its planned 2025-26 budget – but partly because hospital activity grew more slowly.

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But given ambitious targets for improving NHS performance over this parliament, the government may face a choice between revising down expectations for performance improvements or increasing budgets for the coming years above current plans [11/12]

Looking ahead, the key question is whether the era of annual NHS top-ups is now over, or whether 25-26 was just a one-off. Fewer last-minute top-ups, transfers and fiscal changes could mean more money for other priorities. [10/12]

Hospitals also slowed down their activity and staffing growth to stick within budgets. This is consistent with the NHS having stronger financial ‘grip’ on trusts, but also shows the trade-off: all else equal, not topping up budgets will slow down performance improvements. [9/12]

Chart showing a slowdown in hospital activity growth in 25-26 compared with 24-25

Some of the top ups in 23-24 and 24-25 also came from much higher inflation than expected. Hospitals have also continued to get more productive – again, all else equal this makes it easier to stick within a given budget and still deliver performance improvements [8/12]

Part of the reason is that the 2024 Spending Review set out more generous planned growth for the NHS than the 2021 Spending Review. Indeed, @benzaranko.bsky.social and I warned in 2021 that top-ups in 24-25 looked likely! All else equal, larger budgets are easier to stick to [7/12]

Frequent last minute changes to budgets may also mean money is being spent less well than if a realistic budget was agreed up front and stuck to. It is therefore welcome news that 2025-26 looked different. So how was it achieved? [6/12]

Where top-ups come from also matters. It's hard to see how the NHS using the Reserve every year meets the criteria of a ‘genuinely unforeseen’ pressure. The Darzi review argued that frequent raids of capital budgets have worsened the NHS estate. [5/12]

This really matters. Having to top up budgets to fund on-the-ground pressures every year has never been a good way to fund the NHS, and suggests something has been going wrong with the way budgets and performance expectations are set between the NHS and govt [4/12]

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Zooming out further, 25-26 was the first year in over a decade that the NHS neither made a claim on the Treasury Reserve (a contingency for unexpected spending pressures) or raided capital budgets to meet frontline pressures [3/12]

Chart showing no reserve claims or raids on capital budgets for frontline pressures in 25-26, unlike in previous years

DHSC’s initial budget for 2025-26 was set at the 2024 Spending Review. Excluding transfers and classification changes, it was only topped up by £400 million since then. That compares to top-ups of £16 billion in 24-25 and £8 billion in 23-24. [2/12]

Chart showing 25-26 had much smaller top-ups than 23-24 and 24-25

The Institute for Fiscal Studies @theifs.bsky.social · 25/08/2026

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Reposted by Max Warner

NEW: What are rent controls? How do they impact renters, landlords and rental properties? And are they the answer the UK’s historically high housing costs? 📗 @matthewoulton.bsky.social and Tom Wernham review the evidence in our new explainer on the effects of rent controls ⬇️

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Eduin Latimer @eduinlatimer.bsky.social · 24/07/2026

This is the most important chart for understanding how working-age benefit spending has changed over last two decades. In overall levels spending as % of GDP is lower now that it was in 2012, but the composition of that spending is very different.

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Max Warner @maxwarner.bsky.social · 22/07/2026

We have a comment in the Times today on how yesterday's VAT cut will be paid for. The money has to come from somewhere within departmental budgets, but we don't know what will be squeezed. That's different to the bus fares policy, where more specific cuts have been set out

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Max Warner @maxwarner.bsky.social · 17/07/2026

Andy Burnham will shortly be the next PM. In the latest episode of the IFS podcast, @ckfarquharson.bsky.social, Tom Waters and I discuss the main challenges and policy decisions he will soon face. Including defence, welfare, tax, NEETs, social care and the next Spending Review.

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Reposted by Max Warner

The Institute for Fiscal Studies @theifs.bsky.social · 16/07/2026

NEW PODCAST: The tax and spending choices facing Andy Burnham 🎙️ This week, @ckfarquharson.bsky.social is joined by @maxwarner.bsky.social and Tom Waters to discuss to examine the economic choices facing the incoming Prime Minister.

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Bee Boileau @beeboileau.bsky.social · 01/07/2026

Two key things about yesterday's defence announcement: the scale of the top ups was relatively small, increasing defence spending by about 0.1% of GDP each year; the challenge ahead remains large if defence spending is to hit 3.5% of GDP by 2035.

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Max Warner @maxwarner.bsky.social · 30/06/2026

3. Zooming out, we've still got a long way to go if the govt still wants to get to 3.5% of GDP by 2035 - current plans only get us about a third of the way there relative to 23-24. Getting to 3.5% could cost an additional £25bn each year in today's terms relative to these plans

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Max Warner @maxwarner.bsky.social · 30/06/2026

2. The govt has not said how it will pay for ~1/3 of the increase, an avg of 1.2bn per year, leaving this for the Budget. This means there will be further impacts on other areas of spending, tax or borrowing – implying one key early decision for the next PM

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Max Warner @maxwarner.bsky.social · 30/06/2026

A few key points from our @theifs.bsky.social response to today's Defence Investment Plan 1. The extra funding is quite small, raising defence spending by 0.1% of GDP in each of the next 3 yrs, reaching 2.7% of GDP from 27-28. We also got plans for 29-30 for the first time, also 2.7% of GDP

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Nick Ridpath @nickridpath.bsky.social · 26/06/2026

Could the government borrow more to fund investment in infrastructure? There's a case for borrowing for productive investment, but there isn't one simple trick to substantially increase borrowing within the current fiscal rules. A short thread:

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Max Warner @maxwarner.bsky.social · 11/06/2026

New NHS waiting times data out today. The share of patients waiting ≤18 weeks for elective care dropped a little in Apr, but is still (with rounding!) 65%. List size has gone up a bit. See my thread from last month on how the NHS pushed hard to reach the 65% intermediate target

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Bee Boileau @beeboileau.bsky.social · 10/06/2026

The constant rumours around marginally different top ups to defence spending alongside the Defence Investment Plan over the last few months have been frustrating. As Max sets out, the DIP is just one part of the govt's overall plan to increase defence spending and capabilities

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@helenmiller.bsky.social, Matthew Savill and I also discussed a lot of these key issues on the IFS podcast last year, available here: ifs.org.uk/articles/end...

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If this level of defence spending is the ambition, reaching it will be the real challenge for this and future governments – as I set out to the Treasury Select Committee last week bsky.app/profile/thei...

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Increasing spending from 2.6% of GDP to 3.5% by the middle of the next decade would mean a rise in the order of £30-40bn per year. This is a really significant sum – not money that can be easily found just through salami slicing other budgets, or small tweaks to taxes

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We currently spend about 2.5% of GDP on defence. We’re set to reach 2.6% in 2027-28, then stay at that level in 2028-29. That’s as far as detailed spending plans for total defence go, but the government has set out a commitment to hit 3.5% of GDP by 2035

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I don’t think we should over-focus on the DIP. It’s a good example of the challenges of increasing defence spending given the UK’s fiscal situation. But the govt’s broader commitments for defence spending are much larger and go beyond the next four years

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It’s frequently been reported that this gap could be £28bn over the next four years. That’s equivalent to around 0.2% of GDP per year. Though media reports suggest that any actual top-up the government might provide could well be much smaller than this

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The Defence Investment Plan (DIP) will set out an estimate of defence spending needs, based on the ambitions in the Strategic Defence Review (which the govt accepted last summer). It’s widely expected that there’ll be a gap between these spending needs and funding plans

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