The UK is facing a number of highly complex and uncertain policy issues. Problems at the interface of economics and national security have proved a particular challenge both historically and in recent years and will play a role in many of the critical policy questions of the coming decades. Reforming the British state so that it can thrive in this challenging new era is a crucial, long-term priority. This paper is the first of two developed by the Heywood team and Institute for Government that seeks to ensure that the centre of government in UK is adequately supported with the right analytical capabilities.

This paper looks at the history of efforts in 20th century Britain to analyse issues at the interface of economics and security. It demonstrates that while these functions generally delivered successful policy outcomes, they often faced much resistance within the policymaking system and were run down from the 1970s onwards. It concludes that any effort to improve the UK’s state capacity in economic security requires the full support of senior officials and Cabinet ministers to give it the authority it to run effectively. A second paper, published in the coming months, will examine the gaps in the current system in more detail and outline one model for how the centre of government in the UK could be reformed to further improve its ability to confront the policy challenges we face.