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The new research reported on in this case study on the determinants of household indebtedness and dynamics of household finances has informed government policy decisions, aided monetary policymakers and benefited the third sector. Work on measurement and analysis of over- indebtedness was used by the Department for Business, Innovation and Skills (BIS) to create new criteria for `over-indebtedness', monitor its development over time and model the Financial Services Authority (FSA) funding levy for free-to-client money advice services. Insights on how house prices affect consumption influenced the Bank of England in revising its understanding of the `collateral channel' of house price movements in its Quarterly Model. Through serving as an expert witness to a House of Commons Select Committee Inquiry into `Debt Management' the researchers challenged existing policy measures prompting policy response. The authors also disseminated research findings through a series of non-technical reports and applied projects which have been used to inform indebtedness policy by a broad constituency of free-to-client money advice providers.
Following the global economic crisis of 2007, the question of how macroeconomic policies could be used to ameliorate its consequences has come to the fore. Research led by Professor Patrick Minford at Cardiff Business School (CBS) has promoted a shift in policy in the UK in a classical direction and away from the Keynesian demand management approach. CBS researchers from the Julian Hodge Institute of Applied Macroeconomics (JHIAM) have shown through economic modelling how a series of measures, for example, clear monetary rules which target inflation, could benefit the UK economy. The research has also been used both directly and indirectly, via MPs and intermediaries, to inform policy debates around such major issues as Britain's membership of the European Union (EU), as well as contributing to the wider public debate.
Research by Surrey's Centre for International Macroeconomic Studies (CIMS) has had significant impact on monetary policy in several emerging economies.
This case study highlights impact in Nigeria and Pakistan. Both are important emerging economies: Nigeria is the second largest economy in Africa and ranks 30th by world GDP (adjusted for purchasing power parity), while Pakistan ranks 27th; yet GDP per capita is relatively low in both.
Since 2008, Surrey research has: (1) led to the establishment of a new Centre for Survey Research at the State Bank of Pakistan, collecting data that have directly influenced the Bank's monetary policy; (2) steered reform of the macroeconomic models used by the State Bank and the Central Bank of Nigeria; and (3) helped develop a new approach to monetary policy Nigeria.
University of Reading research led to the development of one of the key tools for housing policy analysis used within the Department of Communities and Local Government (DCLG) and related bodies between 2005 and 2013. In particular, the project, which produced 14 publications and reports, has had a major impact on the analysis of policy and subsequent policy decisions concerning housing supply and land-use planning, housing tenure, international migration and the effects of the credit crunch.
Alliance research has been used by the UK and Scottish governments to direct more of the £10bn p.a. public investment in affordable and social housing towards higher demand growth regions. It has produced a range of affordability-based housing needs models which have been commended as exemplars of good practice guidance for local authorities and adopted by industry consultancies. One tool, used to assess policy options in the context of HM Treasury's 2010 Spending Review, has been described by the Department for Communities and Local Government as "invaluable" and stimulated the development of an equivalent model for New Zealand, influencing investment by the state housing agency, Housing New Zealand, in assets worth $15bn. The research has also led to the cost-effective targeting of low cost and shared home ownership programmes and stronger use of planning powers to deliver affordable housing across the UK and Ireland.
Research undertaken at Reading by Crosby/Hughes/Devaney and retirees Murdoch/Baum into commercial lease law, policy, practice and pricing since 1993 has driven Government policy and supported industry change within a significantly altered leasing environment in the UK. During the REF period, research conducted at Reading has continued to influence the self-regulation of the industry, acted as a catalyst for a new retail lease and significantly influenced industry solutions concerning aspects of commercial lease pricing. Specifically the impact has been on:
- The contents of the Commercial Leases Code of Practice currently in use;
- The 2009 Government policy statement through its monitoring research into the 2007 Code;
- Industry methods for the pricing of lease incentives through authorship of evolving Information Papers and Guidance Notes within the RICS Red Book; and
- Industry wide agreement to produce new property rental value indices and equivalent yield series affecting over 21,000 commercial properties, worth over £140 billion, held within the Investment Property Databank (IPD).
Professor David Leece's research on household decision making, risk and mortgage design had a significant influence on a fundamental review of the United Kingdom's mortgage market carried out in 2003-4, and consequently has had a major continuing impact on: (i) understanding the role of mortgage market economics in the financial crisis of 2007-8; and (ii) the ability of a global investment bank (and the banking sector more widely) to understand, value and hedge risk in securitised mortgage debt.
Research by Professor Darren Smith into Housing in Multiple Occupation (HMO) improved knowledge of the effects of students in university towns in the UK and North America. His research led to revised national planning/housing legislation to integrate students into university towns and provide student housing in more strategic ways. Ministers for Communities and Local Government and Housing used his evidence when revising Use Classes. National consultation documents and government-commissioned evidence-gathering reports on HMO emphasise the importance of his research. His work led to Local Authority Student Housing Strategies and University Student Accommodation Strategies, best-practice guides for student-community relations by National Union of Students (NUS)/private sector, and inclusion of student housing in Regional/Local Housing Strategies and Housing Market Impact Assessments.
There is widespread concern that UK households are not saving enough — personal saving rates fell below zero in 2007 and subsequent recovery has been modest. The challenges are whether policy can encourage households to save enough for their retirement and how to support policy makers in their thinking.
Professor Sefton developed a simulation model of the complex interaction of taxes and benefits with individual work and saving decisions. His model stimulated changes to the Pension Tax regime and informed the conclusions of the Pension Commission. This prompted further funding from HMT and HMRC, to bring his approach in-house: they now routinely embed his approach in their assessment of future tax policy changes.
The impact has therefore been that UK public policy is better informed, with fewer unintended consequences. The beneficiaries are the general public, both through minimisation of costly policy mistakes and because policy can now address the long-term sustainability of welfare policies.
McNay's work is at the boundaries between HEIs and their environment: policy analysis, particularly of Access and, here, Research Quality Assessment, and the impact on internal strategies; and organisational analysis and the way internal cultures and processes are conditioned by external influences. His conceptual model of cultures is used by professionals worldwide to evaluate and improve leadership and management and introduce change. RAE impact analysis has influenced policy (eg on the teaching /research nexus) in the UK and elsewhere) and staff behaviour. It was a factor leading to adjustment of later exercises towards profiling, consistency of criteria and impact