Advancing evidence-based policy with AI & tax-benefit microsimulation

This project will continue Nuffield’s support of PolicyEngine’s open-source tax-benefit microsimulation tool. 

Why this project is important

PolicyEngine builds microsimulation tools with the aim of helping everyone in the UK – regardless of policy expertise – understand how tax and benefit policy affects their country, their community, and their household. Nuffield’s previous funding enhanced the comprehensiveness, accuracy, and accessibility of the tools, which are now used within government and by think tanks across the political spectrum. 

What the research will involve

This funding will enable the team to examine three core issues: 

1. What are the distributional and work incentive effects of local council tax policy variation? England’s 313 distinct council tax reduction schemes, Scotland’s and Wales’s national schemes, and Northern Ireland’s domestic rates create dramatically different outcomes for identical households. No existing analysis quantifies how this variation affects poverty rates, effective marginal tax rates, and household budgets across local authorities. 

2. How do Budget announcements affect households differently across the UK’s 650 constituencies? Fiscal measures have uneven geographic impacts that current analysis misses. This research will produce systematic constituency-level analysis of Budget impacts, revealing how national policy creates local winners and losers. 

3. Which dissemination approaches maximise evidence uptake among underserved audiences? Local journalists lack tools to contextualise Budget impacts or compare council tax decisions. Policy interactives across three years will test partnerships with organisations to identify effective approaches for democratising policy analysis at both national and local levels. 

How the research will make a difference 

The development of overnight analysis capacity will enable rapid responses to national, constituency, and local authority level results for all of the UK, which can be leveraged for fiscal events and major policy announcements. 

Findings will be directly shared with key stakeholders, including local journalists, councillors, advocacy groups, MPs, and academic researchers. Outputs such as interactive dashboards, reform calculators, and constituency-specific reports will be used to disseminate findings.