Wednesday, May 1, 2013

'Nudge unit' to become profit-making

Government's behavioural insight team, which tries to change voters' behaviour without legislation, to be spun off as mutual

John Lewis staff hear the group's financial results – staff 'partners' get a 17% bonus.
John Lewis staff hear the group's financial results – staff 'partners' get a 17% bonus. The 'nudge unit' will become a John Lewis-style mutual. Photograph: David Levene
 
The government's "nudge unit" – also known as the behavioural insight team – will take its first step to becoming a profit-making joint venture on Wednesday as the Cabinet Office launches a competition to find a commercial partner for the business.

Since the unit was set up three years ago, it has become an internationally renowned source of ideas on how to change voters' behaviour without legislation, often using techniques drawn from psychology and advertising, as well as common sense.

The 10-strong Cabinet Office team will be the first policy unit to be spun off from central government and become a John Lewis-style mutual.

The small team – costing roughly £500,000 a year and run by David Halpern – was set up after the last general election to find ways of encouraging people to make better choices, including on lifestyle and health.

It is claimed that it has saved the taxpayer millions of pounds. Demand for its services from within government, as well as the private sector and foreign governments, has grown year on year.

The new business will be one-third owned by government, with a third-party partner putting in investment, and the employees themselves owning the remainder.

The hope is that the setup will encourage the staff to use their expertise to gain more international contracts and expand.

A source close to the minister for the Cabinet Office, Francis Maude, said: "It's great news that the world-renowned 'nudge unit' is spinning out from central government.

"As a mutual they will combine the benefits of private-sector experience and investment with the innovation and commitment from staff leadership."

• This article was amended on 1 May 2013. The original inaccurately stated that the "nudge unit" would be working alongside a private company. The name of the company has been removed.

Guardian