UK Minister admits the government may waste £500,000 shock!

A a recent function I had the privilege to listen to David Halpern who heads up the ‘Nudge unit’ in the UK Cabinet Office. The “Applying Behavioural Insights” unit led by the aforementioned Halpern seeks to apply the insights of behavioural economics/psychology to public policy. I’m not even a big fan of behavioural economics, but it is obviously sensible to audit government policy with the new findings and emphases of behavioural economics to see what easy wins there are.

In any event David Halpern made a very impressive presentation and I’d be very surprised if the Nudge unit doesn’t manage to pay for itself many times over by pointing policy makers to tips and tricks to improve performance. For instance they’ve got the Tax Office or whatever the UK equivalent is called doing Amazon style sampling of response rates to different kinds of arrears letters and producing substantial improvements in responses. From memory the best result is when you start by immediately drawing the readers’ attention to some nasty result – an audit or whatever – with a nice big fat heading, and then you’re quite civil to them and do whatever you can to make compliance easy.

Anyway, they’re up to similar things in lots of areas.

Which brings me to the standard media story a year ago in the Guardian.

‘Nudge unit’ not guaranteed to work, says Oliver Letwin

Minister’s admission follows report that Behavioural Insight Team has failed to convince any Whitehall department to use its ideas

I am shocked – shocked to read this admission. Shocked and delighted. The Minister – and indeed another minister – defended the program on the impecable grounds that it might not succeed, but that it might generate large dividends and if it failed, it would be a small and inexpensive failure.

Letwin told the Lords science committee, which is conducting an inquiry into behaviour change: “It is of course open to question whether any of this will have any effect whatsoever. I don’t want to pretend that behavioural science is a sufficiently developed science to give us complete confidence or even sort of 95% confidence that any given technique will produce given results. It isn’t that way. As a matter of fact the science of investigating regulation isn’t sufficiently developed to give you that either. But I think it is extremely clear that it is pretty cost-free to do these things, pretty straight forward to do them so that if they don’t produce any result we won’t have lost much.”

Not only this but:

Last month Francis Maude, the Cabinet Office minister who works closely with Letwin, argued that government should be allowed to experiment and fail more than it does in order to attempt more ambitious projects.

He said: “I think if you have an excessive blame culture, where for every failure there has to be a scapegoat, every failure is deemed to be a culpable failure, then you have an environment, a culture, in which failure is not recognised, failure is hidden, and you become the prisoner of sunk costs. Good organisations cut their losses early, learn from the things that have been tried and haven’t worked, and move on.”

Hear hear.

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