Wednesday, February 13, 2013

Is The Controversial 'Nudge Unit' Finally Paying Off?

Known colloquially as The Nudge Unit, the team that was once viewed as a “nutty indulgence” at the heart of David Cameron’s government recently had its tenure renewed, after an 18-month probationary period. As a consequence, it will now be at the centre of initiatives on everything from job seeking to anti-smoking. And David Halpern, director of the nine-person unit, has been tasked with turning theory into government method. Loft insulation is a fascinating example,” he says. “If there is ‘friction cost’ in the way of doing something, it’ll never happen. We’ll put it off. So a lot of what we do is about making life easier for people.” The unit’s Whitehall office might be minuscule and recession-frugal — and Halpern himself has the bookish appearance of, as he puts it, “a humble policy wonk”.

But, so far at least, their results have been impressive. When the unit advised the HMRC to change the wording on income tax letters, for example, it resulted in an extra £200million being collected on time. Another experiment with the British Courts Service used personalised text messages to remind people to pay their fines on time. The result? Bailiff interventions were reduced by 150,000, saving around £30million.

Most importantly, they had to save money. Lots of it, in fact: Halpern had to recoup at least a tenfold return on the £520,000-per-year running cost of the team.


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