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Inside The Nudge Unit

David Halpern

It is twenty months into the new government, elected in 2010. The cabinet secretary, Britain's most senior civil servant, has gathered together the heads of the government departments. Between them, they are responsible for the collection and spending of more than half a trillion pounds and employ more than five million public sector workers.

The new cabinet secretary, Sir Jeremy Heywood, calls the meeting to order. He is, in every sense, the prime minister's right-hand man: not just the country's top mandarin but literally the one to sit beside the prime minister in cabinet to document its decisions and to make sure they happen. On the agenda is a ten-minute presentation and discussion of the behavioural insights team or, as the press and most of Whitehall jokingly call it, the nudge unit.

For most of those around the table it is the first time they have seen any results from the team. It will, at least, be a fun item to lighten their week. They are old hands. They know the ways of newly elected governments, with their bright new advisers in No 10.

New governments like to talk about new approaches, but many of these approaches are forgotten after a year of two, and with them the advisers that made them fashionable. Ultimately, the challenges and tools of governments don't change much over time.

I have little time, so I immediately outline the nature of the approach: it is about introducing a more realistic model of human behaviour into policymaking. The idea is to use this approach to identify lowcost and unobtrusive ways of 'nudging' behaviour. I move to four early results. The first is from the tax department. I explain how we worked with the department to send out different versions of letters to people who owed tax to test systematically if changing the wording based on the behavioural literature would make a difference. We tested whether adding a sentence such as 'most people pay their tax on time' would boost repayment rates. It did - and by several percentage points, enough to bring forward tens of millions of pounds.

The second result is from a trial we had run to encourage people to insulate their lofts or attics. The numbers were small, but the results elegant. The environment department had been asking for money for larger subsidies on insulation, but we had concluded that for many people the biggest issue was hassle rather than cost. With this in mind, we used a leaflet study to compare the effectiveness of offering extra discounts with an alternative one offering an 'attic-clearance service' that homeowners had to pay for. The attic clearance scheme, despite its extra cost to householders, was more than three times more popular.

The third result is about motoring fines. It shows that adding an image of the owner's car, captured by roadside camera, made the owner significantly more likely to pay unpaid car tax.

The fourth result is from a trial with the courts service. We had texted the mobiles of people who owed fines informing them that bailiffs were due to collect in the next ten days. The graph showed how the texts more than doubled payment rates, saving the courts time and the debtors money and hassle from bailiffs, and boosting revenue in the process.

One after another, the results show how small changes in processes, or even just the wording of letters, led to significant shifts in outcomes. And the cost? Almost nothing.

One of the perm secs raises his hand. His expression inscrutable, he asks if his minister had been informed about the trial that had been conducted in his department. For a second my heart sinks. I am not at all confident that the minister does know. We had gone, guerrilla-style, to the head of one of his regional services to run the trial, worried that otherwise we would be bogged down in paperwork for months. I fear we are about to be ripped apart. Instead he grins warmly, and asks for more details to be sent over so that he can brief his minister, who he thinks will be very impressed. It is a key turning point. It was the day nudging went mainstream.

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Whitehall's behavioural guru believes he can win over Heathrow's neighbours

David Halpern, the head of the behavioural insights team, or 'nudge unit', said that fresh thinking was needed to win over the local population when it came to big infrastructure projects to stop the costly planning battles that precede most of them.

Psychologically, the human mind is primed to fear the worst when change is imminent, he said. The mind fills with the bad, which drives out the good. Incentives can help to break into that mechanism, he believes. Smart incentives that need not cost much could help people to realise that there may be an upside for them.

'If you ask someone if they want more housing in their area, they will almost always say no. If you ask them would they like their children to have new housing so they can stay in the local area, they will say yes. These planning issues need to be framed differently,' he said.

'When it comes to a big project like Heathrow, we need to think about how to help local people feel more positively about expansion. Heathrow airport should be offering local residents who will be affected by the noise of more planes flying over their homes by giving them vouchers for travelling. It would change the way a resident feels about the plane going overhead. It might make them think, 'There goes my holiday to Barbados'.'

Mr Halpern was speaking to The Times to mark the publication of his book Inside the Nudge Unit, which charts how the behavioural insights team came into being in the early days of the coalition government in 2010 and how it has started to change policy making.

Among its early successes were increased tax collection after changes were made to the wording on tax demands, cutting dropout rates at further education colleges with a Sunday evening text to students, and higher levels of police recruitment from ethnic minorities after tinkering with the online application process.

Failures include helping pregnant women to stop smoking with offers of assistance on pregnancy tests.

Mr Halpern, who sets his watch three minutes fast to fool himself that he is running late, has no fear of failure. It is central to the unit's approach. If you try new ways of doing something, some will fly and some will flop. After early scepticism, government departments are now falling over themselves to work with behaviour experts on his staff and the unit is being copied all over the world.

'We are trying to be realistic about what drives behaviour. A lot of decisions in government are based on an unrealistic model [that people are rational]. If you can understand how humans make decisions you can make policy more effective.'

Hassle, and removing it, is central to nudging people in the right direction. Why are oranges often the only fruit left in the bowl? They are a hassle to peel. Similarly, few people have taken advantage of subsidised loft insulation to cut their energy bills because it is too much hassle to clear the loft. The solution? Send details of local loft clearings companies with the literature. It worked where further discounts failed. Mr Halpern knew the risks involved in challenging the old ways of doing things in a civil service weary of new ideas. He had been a member of the “blue skies” strategy unit set up by Tony Blair that sank without trace.

The Big Society was launched at about the same time as the Nudge Unit and within months became a joke. So why has the Nudge Unit flourished? 'We didn't make a song and dance about [the nudge unit],' he said. 'The quiet beginning gave us the space to do the heavy lifting. It is very much about an empirical approach, testing things out to see what works. So much of the work was about small, seemingly insignificant, changes about choices and what is more effective.'

Staff beavered away for 18 months before it even went public within Whitehall, presenting a few early findings to key permanent secretaries. They were stunned that such small, cheap interventions could help to solve problems that departments had been wrestling with for years, such as how to get people to switch energy suppliers to get a better deal. Answer: print a message highlighting the potential savings on the outside of the winter fuel envelope. How to get more people to pay their tax on time? Tell them: 'Most people pay their tax on time'.

As a father of two teenagers he also has advice for parents struggling to get their children off their screens. 'Create a positive alternative. Don't just tell them to get off their screen. Play games with them and prevent it being such a solitary pursuit.'

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