Max Warner

Max Warner

@maxwarner.bsky.social

Economist at the IFS working on healthcare, public spending and public sector productivity https://ifs.org.uk/people/max-warner

791 followers69 following230 posts

Max Warner reposted

Looking for something to read with your morning coffee? Why not read my @theifs.bsky.social comment with @peterlevell.bsky.social on how to design business energy support schemes.

NEW: What does well-designed business energy support look like? In a new comment ahead of the Autumn Budget 2026, @peterlevell.bsky.social and @jschneebacher.bsky.social examine the five key principles for business energy support ⬇️

1. New Treasury stats out today suggest that departments made significant efficiencies and savings in 2025–26. They report savings of 4.1% from ‘efficiency, savings, and productivity’, well above the 2024 Autumn Budget target of 2%. What should we take from these figures? 🧵

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This is especially important as budgets going forward rely on continued efficiency improvements. If these gains continue, public spending pressures would be eased. If growth cannot be sustained, services will either be worse than planned or need budget top-ups.

It’s very welcome to see plans for departments to publish more detail in future. That’s particularly important given ambitions in the years ahead, which we discuss in our recent @theifs.bsky.social Green Budget chapter here: ifs.org.uk/publications...

ifs.org.ukPublic service spending: plans and pressures | Institute for Fiscal StudiesDepartmental spending growth is slowing amid pressures on budgets and new spending ambitions. We assess the Chancellor’s choices at this Budget.

1. New Treasury stats out today suggest that departments made significant efficiencies and savings in 2025–26. They report savings of 4.1% from ‘efficiency, savings, and productivity’, well above the 2024 Autumn Budget target of 2%. What should we take from these figures? 🧵

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What does this mean going forward? If these efficiency gains prove to be real and permanent, public services will be able to deliver better services within existing spending plans in future years – unambiguously good news.

It’s harder to tell what this means for future efficiency gains, especially without much detail on what drove improvements. Strong gains last year could suggest high growth will continue – or ‘low-hanging fruit’ improvements could now have been made, and growth will slow.

1. New Treasury stats out today suggest that departments made significant efficiencies and savings in 2025–26. They report savings of 4.1% from ‘efficiency, savings, and productivity’, well above the 2024 Autumn Budget target of 2%. What should we take from these figures? 🧵

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If you take them at face value, today’s figures imply around £9bn of efficiencies were made in 25-26. This would be very high – plans for the following 3 years aim to make £13bn of efficiencies by 28-29. And even those plans are ambitious relative to the historic average.

How accurate are these estimates? Productivity is hard to measure, and the ONS (using a different approach) estimate much slower public sector productivity growth in 25-26. There isn’t much methodology published with these new figures, so they are hard to evaluate.

1. New Treasury stats out today suggest that departments made significant efficiencies and savings in 2025–26. They report savings of 4.1% from ‘efficiency, savings, and productivity’, well above the 2024 Autumn Budget target of 2%. What should we take from these figures? 🧵

It’s worth separating this total into ‘efficiencies’ and ‘savings’. ‘Savings’ simply mean spending less by not delivering some services. ‘Efficiencies’, however, mean services can do more with any given budget – a clear win-win for public services and the public finances.

Max Warner reposted

Spending on special educational needs and disabilities (SEND) in England is set to be over £16bn this year. In real terms, that's roughly twice as high as 10 years ago. This reflects rapidly increasing demand for support, particularly Education, Health and Care Plans (EHCPs) 🧵

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]

NEW: Migration and the public finance forecast In our first IFS Green Budget 2026 chapter, funded by @nuffieldfoundation.org and Barclays, we look at the ways migration feeds into the public finances, and how it's accounted for in the OBR public finance forecast.

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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]

NEW: Migration and the public finance forecast In our first IFS Green Budget 2026 chapter, funded by @nuffieldfoundation.org and Barclays, we look at the ways migration feeds into the public finances, and how it's accounted for in the OBR public finance forecast.

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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...

Nick Ridpath@nickridpath.bsky.social

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:

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]

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]

NEW: Migration and the public finance forecast In our first IFS Green Budget 2026 chapter, funded by @nuffieldfoundation.org and Barclays, we look at the ways migration feeds into the public finances, and how it's accounted for in the OBR public finance forecast.

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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]

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]

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]

NEW: Migration and the public finance forecast In our first IFS Green Budget 2026 chapter, funded by @nuffieldfoundation.org and Barclays, we look at the ways migration feeds into the public finances, and how it's accounted for in the OBR public finance forecast.

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]

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]

Max Warner reposted

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:

NEW: Migration and the public finance forecast In our first IFS Green Budget 2026 chapter, funded by @nuffieldfoundation.org and Barclays, we look at the ways migration feeds into the public finances, and how it's accounted for in the OBR public finance forecast.

Max Warner reposted

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?

NEW: The NHS almost always has its budget topped up. But 2025–26 was different, with a much smaller top-up and no claim on the Treasury Reserve or capital budgets for frontline pressures. @maxwarner.bsky.social & Olly Harvey-Rich’s Green Budget comment on what changed last year [1/4]

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?

NEW: The NHS almost always has its budget topped up. But 2025–26 was different, with a much smaller top-up and no claim on the Treasury Reserve or capital budgets for frontline pressures. @maxwarner.bsky.social & Olly Harvey-Rich’s Green Budget comment on what changed last year [1/4]

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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]

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?

NEW: The NHS almost always has its budget topped up. But 2025–26 was different, with a much smaller top-up and no claim on the Treasury Reserve or capital budgets for frontline pressures. @maxwarner.bsky.social & Olly Harvey-Rich’s Green Budget comment on what changed last year [1/4]

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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]

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]

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?

NEW: The NHS almost always has its budget topped up. But 2025–26 was different, with a much smaller top-up and no claim on the Treasury Reserve or capital budgets for frontline pressures. @maxwarner.bsky.social & Olly Harvey-Rich’s Green Budget comment on what changed last year [1/4]

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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]

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]

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?

NEW: The NHS almost always has its budget topped up. But 2025–26 was different, with a much smaller top-up and no claim on the Treasury Reserve or capital budgets for frontline pressures. @maxwarner.bsky.social & Olly Harvey-Rich’s Green Budget comment on what changed last year [1/4]

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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]

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]

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?

NEW: The NHS almost always has its budget topped up. But 2025–26 was different, with a much smaller top-up and no claim on the Treasury Reserve or capital budgets for frontline pressures. @maxwarner.bsky.social & Olly Harvey-Rich’s Green Budget comment on what changed last year [1/4]

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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]

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]

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?

NEW: The NHS almost always has its budget topped up. But 2025–26 was different, with a much smaller top-up and no claim on the Treasury Reserve or capital budgets for frontline pressures. @maxwarner.bsky.social & Olly Harvey-Rich’s Green Budget comment on what changed last year [1/4]

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]

Max Warner reposted

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.

Eduin Latimer@eduinlatimer.bsky.social

3. Rising spending on disability benefits and other health-related benefit spending have pushed up overall spending on benefits for working-age adults and children since the pandemic but as a share of GDP total benefit spending is still lower than it was in 2012.

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

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.

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.

Max Warner reposted

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.