The UKRI Economic and Social Research Council (ESRC) has awarded the Centre for Economic Performance (CEP) at LSE £9.2mn for its five-year programme of work from 2025.
This renewed funding will enable CEP to continue developing innovative and world-leading policy-focused research.
The new programme will analyse how to bring about the economic and social change needed to escape from more than 15 years of economic stagnation and political polarisation. It will also address concerns around inequality and environmental sustainability.
Since its founding in 1990, CEP has been instrumental in the introduction of a national minimum wage, improving access to psychological therapies, understanding what drives productivity and highlighting the barriers to social mobility.
CEP has a reputation for academic excellence, impactful policy work, and providing leadership and support to the wider social science community. Recent key achievements include:
- Building on evidence-based, policy-focused research from the last 30 years, to set out a new economic strategy aimed at steering the UK economy out of decline by leveraging the country’s strengths. This is now being implemented by policymakers.
- Highlighting, through a sizeable body of research, the key issues of real wage stagnation and flatlining productivity within the UK economy, along with the study of important shifts in the labour market including the rise of self-employment and recent increases in economic inactivity.
- Understanding the impact of leaving the EU on UK trade openness and competitiveness, immigration, economic insecurity and the rise in food prices.
- Pioneering research, with the Grantham Research Institute on Climate Change and the Environment, to promote green growth and the transition to net zero.
CEP is also committed to training the next generation of economists, many of whom will go on to become leaders in the social sciences. CEP members currently chair the Migration Advisory Committee and serve on the Bank of England’s Monetary Policy Committee and the Low Pay Commission.
Based at the London School of Economics and Political Science (LSE), CEP was founded by Professor Lord Richard Layard. It is currently led by Professors Stephen Machin and Henry Overman OBE.
CEP holds ESRC Institute status in recognition of the global importance of its work.
Stian Westlake, Executive Chair of ESRC, said: “For over 30 years, CEP’s invaluable work has helped us understand the economic forces that shape our world, our country and our lives. Its past research has shown the significant impact that improved mental and physical wellbeing have on productivity and economic growth.
“CEP’s insights and deep expertise into the functioning of the economy provide an essential basis for restarting growth, reviving the public finances and promoting human flourishing.
“This continued investment shows ESRC has every confidence that CEP is up to the task.”
Stephen Machin, professor of economics and Director of CEP, said: “The UK faces long-standing structural barriers to improving economic performance and delivering inclusive and sustainable growth which our wide-ranging research and policy work seeks to address. CEP has a track record of undertaking research on real-world issues that affect us all – at home, at work, in our schools and public services, and in our local communities – as well as being crucial for businesses and governments, locally, nationally and internationally.
“Institute funding from ESRC plays a crucial role in achieving this impact, and we look forward to continuing to set policy agendas, working with policymakers, other stakeholders and our partners in the social science community to inform, understand and ensure a sustainable, fairer and more prosperous economy.”
Larry Kramer, President and Vice Chancellor of LSE, said: “This renewed funding is a tribute to the quality and impact of CEP’s research and public engagement programme. LSE is delighted to see CEP’s work get this recognition.
“We need a new way to understand the relationship between markets, government, and society and this search for a new political economy paradigm is a focus for us at LSE. CEP academics are working at the frontier of finding paths to a better economy in a world of listless growth, extreme inequality, stagnant living standards, cascading climate change and increasing political polarisation.”