Government to sell off Whitehall 'nudge unit'

1 May 13
The government’s controversial ‘nudge unit’, which develops ways to encourage individuals to make better life choices, is to be turned into a standalone business.

By Richard Johnstone | 1 May 2013

The government’s controversial ‘nudge unit’, which develops ways to encourage individuals to make better life choices, is to be turned into a standalone business.

The Cabinet Office said demand for the unit’s work from within government, and from the private sector, had grown significantly and the move to a partly staff-owned firm would therefore help it expand

The Cabinet Office today said that the unit, formally called the Behavioural Insights Team, would be spun out of Whitehall. This will be the first time that a policy unit has ever been moved out of government.

Both staff members and a private firm will take a stake in the new company, which will be run as a mutual joint venture. A competition is now under way to identify an external investor.

The unit was established by the coalition government in May 2010 to apply insights from behavioural economics and psychology to public policy and services. Among the policy areas it has examined is how to alter tax demands from Revenue & Customs to ensure people pay on time, and how to encourage people to insulate their homes through council tax rebates.

Announcing the decision, the Cabinet Office said demand for the unit’s work from within government, and from the private sector, had grown significantly and the move to a partly staff-owned firm would therefore help it expand.

Cabinet Office minister Francis Maude added: ‘We are in a global race for the jobs and opportunities of the future. To get Britain back on the rise we must find innovative models like mutuals and joint ventures, which can deliver services better and more efficiently, while supporting growth in the economy.

‘The Behavioural Insights Team is world-renowned and under a joint venture business model we will combine the benefits of private sector experience and investment with the innovation and commitment from staff leadership to develop a sustainable growth business.’

The decision followed last week’s launch of a new firm to offer civil service-standard training and qualifications to the private sector. It forms part of reforms to ‘make public assets pay their way’, a spokesman for Maude added.

‘We hope to support dozens more new spinouts over the next few years. This is a whole new growth area and Britain is leading the way.’

The Public and Commercial Services union condemned the move as ‘back-door privatisation’.

General secretary Mark Serwotka said there was ‘nothing mutual, co-operative or employee-led about what Francis Maude is trying to do’.

However, business leaders welcomed the step as ‘an innovative way of commercialising Whitehall expertise’.

Matthew Fell, director for competitive markets at the CBI, said: ‘This will give the new enterprise the freedom to drive greater efficiency and to compete for new business, generating savings and potential new revenue for the government.

‘New delivery models, such as mutual joint ventures, offer real potential to transform public services by combining private sector knowledge and investment with employee ownership and leadership. The CBI believes there are many other functions across central and local government that could benefit from similar partnership models.’

Spacer

CIPFA logo

PF Jobsite logo

Did you enjoy this article?

AddToAny

Top