We’ve teamed up with Nesta and the Government to create a new social purpose company: The Behavioural Insights Team. We’ll be joining Nesta at their offices at the start of April, but before we sit down at our desks we wanted to introduce ourselves and tell you a bit about what we’ve done, and what we hope to do.

We set up the Behavioural Insights Team in 2010. We were then a unit based in No.10 and the Cabinet Office, with a remit to draw on ideas from behavioural economics and psychology, and apply these to policy in the UK.

The idea was to build a policy making function at the heart of the UK Government that sought to understand how people behave in practice (rather than how standard economic models assume people behave), and then design more efficient, cheaper, and effective interventions that went with the grain of human behaviour.

One idea from behavioural economics is that people tend to go with the flow of the ‘default’ option that they’re presented with – the classic example being that the best way to get people to save for their retirement is to automatically enrol them on to a pension plan, and give them the option to ‘opt out’ (rather than assuming that everyone will search the market for the best pension in their early 20s).

We applied this same thinking to ourselves in those early days – we put in place a two year ‘sunset clause’, which meant that the default option was to disband the team, unless we achieved three (pretty challenging!) objectives. We needed to:

• Show a ten-fold return on the cost of the team.
• Spread understanding of behavioural insights across government.
• Transform at least two policy areas.

Over the course of the next two years, we were able to show more than a 100 fold return on the cost of the team. We hadn’t completely transformed whole policy areas, but we had helped almost every government department to put in place new, more behaviourally-informed initiatives, some of which proved to be fantastically successful. We passed the two year point with two As and a B.

Our biggest early success came from areas where we could show how effective simple, small changes could be at increasing departmental revenues. In particular, the two-year programme of work we kicked off around tax – where we were able to show through tens of separate trials that simplification of letters and the introduction of behaviourally-informed messages (such as ‘9 out of 10 people in the UK pay their tax on time’) had advanced the payment of over £200 million in tax revenues.

At the heart of this success was a new approach to policy making. Not only were we drawing on new ideas and insights from the behavioural sciences, but we developed fast, cheap ways to test new ideas through randomised controlled trials (RCTs). By testing variations of the same intervention against one another, these RCTs enabled us to show, for example, that single lines in letters were responsible for increasing tax payments by 2 per cent.

They have also enabled us to show that personalised text messages encourage people to pay their court fines, encouraging people to make active commitments helps them find jobs, and 100,000 more people will join the organ donor register if people are asked whether they’d take an organ if they needed one.

Following a successful few years in government, we received lots of requests to do work in lots of other areas, and with foreign governments. So we decided to set up a new model for the team, which enables us to continue to work for the Cabinet Office, but also gives us the opportunity to be commissioned by other departments, foreign governments or even private sector companies, so long as there’s an underlying social purpose.

We are delighted that Nesta is our joint venture partner, and we’re excited about joining them at Plough Place – not just because Nesta is a fantastic organisation with a similar ethos to our own, but also because we see the potential for collaboration across lots of different work areas.