How the ‘nudge unit’ pushed its way into the private sector
The Cabinet Office’s influencing team pulls in revenues of £14m a year,
David Halpern pauses at the mention of a quote from one of the government’s senior Brexiters – that “people in this country have had enough of experts” – and briefly gazes out of a window in the Westminster offices of the Behavioural Insights Team (BIT).
“Empirically it doesn’t appear to be true,” replies the chief executive of the business that was once the Cabinet Office team nicknamed the “nudge unit”. It was spun off in 2014 as a “social purpose company” and is now co-owned by its employees, the Cabinet Office and the innovation charity Nesta.
“Michael Gove made that remark, and he was talking about a very particular context, but if you actually look at the data, trust in experts has gone up over the last 10-15 years,” says Halpern. “I know everyone likes to say ‘we’re sick of experts’, but it doesn’t appear to be the case.”
The financial performance of BIT – which uses behavioural psychology to change habits and actions – certainly suggests expertise, as a commodity, is valuable.
Ten years ago, BIT was a small unit of civil servants established with the remit to apply lessons from behavioural economics and psychology to public policy. But it has now grown into the type of British export success story that Gove and fellow Brexiters might want to celebrate.
The group’s revenues last year climbed by a third to £14m and nearly 40% of that income came from overseas. BIT now has a New York office bringing in clients across the US and Canada, and subsidiaries in Australia, New Zealand and Singapore. The unit’s successes include sending letters to British GPs who were prescribing more than their peers, cutting unnecessary prescriptions by 3.3%. BIT’s clients range from governments and public bodies to the World Bank, and its work spans traditional “nudge” territory – such as using behavioural psychology to prompt people to pay their taxes or make better use of public services – to involvement with Colombia’s peace process.
But back in London there are some particularly interesting questions looming for an organisation that seems a curious cross between a Silicon Roundabout startup and a Whitehall department.
What now for nudge in the age of Brexit? Also, for an outfit created under David Cameron to find ways of doing “more with less” under austerity, what might happen in the event of a Corbyn government committed to high public spending? “I worked for Tony Blair for six years, so I did live through a period where there was a lot of money … but it seems that governments always struggle,” replies Halpern, a psychologist who lectured at Cambridge, Oxford and Harvard before entering government. He has plenty to say that might interest not just business, but conceivably a Labour Treasury team headed by John McDonnell.
Halpern’s ideas for altering the labour market, for example, take an approach that transcends classical left and right views. “Take someone trying to decide where to work. They can get info about what they might earn, but not much else. Will you be happy? Do you have progression opportunities? Is the boss an asshole?” he says. “There are things like [the workplace review site] Glassdoor, but imagine you had something more like TripAdvisor that was filled out and really rich in information about firms.”
BIT is active, too, on the financial front. Work in partnership with the Money Advice Service has been developing ways of helping squeezed families to tackle debt and encourage “rainy day savings”.
“In India it has been found that if you give workers their money in two tranches they are more likely to save. It’s even more effective if you give them the envelopes with pictures of their kids on it, or if they have to tear that picture in order to get the money,” he says.
David Halpern would like to see a TripAdvisorstyle site that rates employers.