A brief history of PSI

PSI’s Emeritus Professor Alan Marsh reveals the Institute’s roots in the great planning debates of the 1930s, its role in creating the modern welfare state in the UK, and its wide-ranging and influential work over the years to the present day.

For more than 80 years, the Policy Studies Institute (PSI) has contributed to Britain's democratic political debate and our public life. Independent of all political and commercial interests, PSI's research and creativity has helped shape policy for national and local governments, charities, and institutions like the National Health Service (NHS) and the police. Now part of the University of Westminster, the Institute continues to address the main policy issues of the day - especially those related to employment, poverty, inequality and the environment.

Planning a new Britain

We began in 1931 as Political and Economic Planning (PEP), merging with the Centre for Studies in Social Policy to become PSI in 1978. The early inspiration for PEP arose from a growing dismay with the apparent weakness of liberal democracies to deliver security and prosperity, compared with the equally apparent effectiveness of planning elsewhere. Our first director, Max Nicholson, brought together a body of progressive thinkers to produce a National Plan for Great Britain, many aspects of which worked though into policy over the following 10 years, such as the creation of the NHS, a bureau of national statistics, new towns, ‘green belts', national parks, integrated transport and other facets of the welfare state, even what became the South Bank in London.

When war came in 1939, from its earliest months the Institute's work focused on Britain's and Europe's postwar recovery and long-term future. A PEP broadsheet, Planning for Social Security, impacted crucially on the Beveridge Report. A nation energised by this vision of a fairer, socially secure future was one of Britain's most potent weapons throughout the conflict. Another PEP publication, Britain and Europe, prefigured much of the debate on creating a federalised future for a Europe that could never go to war with itself again.

After the war, like the UK government itself, PEP was less preoccupied with planning a brave new future than with confronting the country's urgent problems of production and export; its first major review, Britain and World Trade, was influential. Thus, fuel and power, engineering and manufacturing, dominated PEP's postwar research. But nascent studies of industrial relations, citizen participation and women in the labour force all hinted at the decisive contributions the Institute was to make to social policy in later decades.

During the 1950s, PEP held almost a monopoly on the serious study of the Common Market and kept alive the debate about joining.

‘Let the facts speak for themselves’

It was during the 1960s and 70s that PEP changed from what we now call a think-tank and became the primary research institute it is now. It would not only ‘let the facts speak for themselves', but would independently discover the facts, too. This transition was marked by a series of benchmark studies of great importance and influence. Bill Daniel's famous demonstration of the discrimination faced by African-Caribbean migrants led directly to the extensions of the Race Relations Acts in 1968. Mayer Hillman's studies of urban growth and transport challenged conventional wisdom favouring motor transport while Isobel Allen's studies of family planning and other issues in social medicine and Richard Berthoud's The Disadvantages of Inequality, returned PEP's focus to social issues.

In the industrially troubled 1970s, the Institute produced a huge amount of work on labour relations and collective bargaining, culminating in the first national study of Workplace Industrial Relations.

These benchmark studies provided the template for a remarkable period of continuity in PSI's work during the 1980s and 90s. The industrial-relations studies were repeated over the next 25 years to provide a unique resource for the understanding of change in union and employer relations and the effects of these changes on industry and the labour market. The studies of race relations were followed by a large number of specialised studies of racial disadvantage and began a series of national surveys of ethnic diversity in Britain that provided the main source of evidence for policy in community relations. Studies of disadvantage and debt, family poverty and lone parenthood, benefits and work incentives throughout the 1990s and 2000s overturned conventional thinking on the use of in-work benefits and opened the way for tax credits to become one of the main pillars of welfare-to-work policy. Subsequent evaluations of New Deal programmes provided a large part of the evidence underpinning work-based welfare policy, including later the effects of the extension of maternity- and paternity-leave and pay.

PSI in the twenty-first century

Today, as well as providing investigative descriptions that aid and encourage progress in new social policy, PSI specialises in high quality, multi-method evaluation studies of existing policy and, more especially, pilot studies. PSI has pioneered the use of new analysis techniques and experimental methods, including the use of large-scale random-assignment demonstration projects that test social policies in ways that medicines are tested, such as the Employment Retention and Advancement scheme.

Perhaps for the first time since PSI's early days, fundamental questions are being raised once more about how democratic governments can cope with multiple challenges facing policy makers. The growth of inequality, rapid demographic and social change, potentially vast human migration, climate change and depletion of finite resources, all appear to demand greater policy leverage than liberal democracies can exert. PSI's work contributes to the most urgent and advanced social thinking on these issues. We continue to make decisive contributions to public life, trusted equally by all sides to controversy.

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