Editorial: Mutuals are best when nudged

A promising model requires evidence and caution.

By Joshua.Chambers

10 May 2013

The news last week that the Behavioural Insights Team – known as the ‘nudge unit’ – is going to leave the public sector to become a mutual received opprobrium and delight in equal measure. In reality, it is a cautious step on a slow journey.

The Cabinet Office has long been keen on the mutual model, where employees, government and the private sector all own stakes in a unit that was previously a part of government. Potentially, it can allow employees to take greater risks, supported by private sector investment. However, it could also mean that the public sector loses key talent in the long run.

So far, the only mutual established by central government is MyCSP, which delivered a relatively small service administering civil service pensions. There have been other opportunities to establish bigger mutuals, such as with the closure of the National School of Government, but the Cabinet Office was keen to yield the savings brought about by outsourcing training entirely. Recently, the Cabinet Office announced a joint-venture to sell government’s project management expertise, but although employees will be given an annual profit share, they don’t own a stake in the company.

Mutualising the nudge unit’s small team is in keeping with its ethos: building up an evidence base through small-scale pilots. Its founder, David Halpern, only ever wanted his unit to have a limited lifespan within government; mutualisation allows the team to continue its pioneering work. Meanwhile, departments have already started to develop their own nudge teams in-house, so behavioural economics work will continue to grow in government without the need to buy-in consultancy.

There are plenty of other units that could theoretically compete in the private sector. The mutualisation of the Government Digital Service, for example, would shake-up IT service provision in the UK. But many members of that team are attracted by the public service ethos. If they were to be mutualised, that would be lost and they could be poached away to other, bigger, private sector IT firms; the government would lose key talent while the mutual would struggle. The Cabinet Office should therefore monitor the mutualisation of the nudge unit carefully before establishing any more of them. A cautious approach is the correct one.

Joshua Chambers, Deputy Editor. joshua.chambers@dods.co.uk

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