Links between Labour and the biggest think-tank in Britain have come under fire with accusations that the party out-sourced its policy-making process to them while receiving nearly £1 million in government grants.

The Institute for Public Policy Research (IPPR), which claims credit for the introduction of congestion charging and the Child Trust Fund, has received money from 17 different government departments and agencies over ten years.

At the same time, it has acted as cheerleader for Labour’s more controversial policies, including road pricing, rubbish taxes, ID cards and justifying hospital closures.

The Tories say that the IPPR is in effect doing the job of an impoverished Labour Party and the taxpayer is subsidising the broader policy-making of the Labour movement.

The Government has given grants to policy development, research projects, conferences and seminars. The biggest awards came from John Prescott’s old department, the Office of the Deputy Prime Minister and the Department for Communities and Local Government, which gave more than £100,000 for policy development with the Social Exclusion Unit and the National Community Forum.

The second highest grants came from the Arts Council, which provided £91,223, two thirds of which was for a single project on the identity culture and the challenge of diversity.

Large sums have also come direct from central government departments, including the Foreign Office, which has made ten payments to the IPPR ranging from £9.49 to £40,000 for “goods and services”.

Public money has also been used to sponsor events at the Labour Party conference. In 2003 the Commission for Racial Equality spent £5,875 on an IPPR fringe event at the 2003 Labour Party conference and in 2004 the Arts Council of England sponsored a breakfast debate.

The Tories highlighted in particular a payment of £29,417 from the Department of Constitutional Affairs to the IPPR to be an adviser on a project to provide “better value for money for the taxpayer”.

The Tories are monitoring the revolving door between the staff of the IPPR, the Labour Party and the Government. Nick Pearce, the IPPR’s director, was previously a Labour special adviser in the Home Office, the Department for Education and Skills and the Cabinet Office.

The previous director, Mat-thew Taylor, joined from the Labour Party, where he was the director of policy before leaving in 2003 to head the Downing Street Policy Unit and help to write the 2005 Labour Party general election manifesto.

Oliver Heald, the Shadow Cabinet Office Secretary, said: “We already know that the Labour Party is near bankruptcy and is grasping at straws to rake in funds or cut its costs. It appears that the Labour Government has systematically bankrolled the IPPR to out-source the Labour Party’s policy-making process, and help fund the reelection of the Labour Government.

“By subsidising this think-tank, taxpayers’ money is helping justify the Labour Party’s policies of road pricing, bin taxes, ID cards and hospital cuts. Combined with the links between the Smith Institute and Gordon Brown, there is now growing evidence of backdoor state funding of the Labour movement. Think-tanks have a valuable role to play in promoting vigorous debate, but they should not be arms of the State.”

A spokesman for the institute said: “IPPR is a registered charity which is funded by a wide range of trusts, foundations, voluntary, private and public sector organisations. We are totally open about who funds us. Government funding represents just 4 per cent of our turnover since 1997 and a tiny fraction of government spending on high-quality research.”

“The Conservative Education Spokesman David Willetts described the last issue of our journal as ‘a refreshing, clear-headed analysis to key issues of public policy’.

“In recent years we have had the Tory leader of the Local Government Association, Lord Bruce-Lockhart, chair our commission on sustainability in the South East and hosted speeches by Tory heavyweights like David Davis, George Osborne, Philip Hammond and Michael Heseltine.”

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