Government's Nudge Unit Spun-Off as Separate Mutual Firm

The UK government's Behavioural Insights Team (BIT) - commonly known as the 'nudge unit' - has been spun-off into a mutual joint venture, with innovation charity Nesta, the unit's employees and the government each owning a third of the new business.

Set up by Prime Minister David Cameron in 2010 after he had read Richard Thaler and Cass Sunstein's book Nudge: Improving Decisions about Health, Wealth, and Happiness, the unit's remit is to apply the authors' theory that people's habits can be changed without government regulation, instead nudging them in the direction they 'should' go.

The decision to transfer the unit to mutual status was first announced last year, when the government launched a competition to find a commercial firm to help with the process. At the time, The Public and Commercial Services (PCS) union attacked the idea as 'backdoor privatisation', claiming that there is 'nothing mutual, co-operative, or employee-led about the scheme'. In an opinion poll conducted by the PCS, just 16% of civil servants said they were interested in exploring the idea of becoming a mutual.

According to reports, Nesta will provide £1.9m funding for the unit's experiments, and the government retains a 30% stake in the new venture. As part of the spin-off, the nudge unit's sixteen behavioural psychologists and economists will move out of the Cabinet Office and into Nesta's London HQ, where David Halpern (pictured), who previously led the team, has been named CEO of the new company.

Nesta CEO Geoff Mulgan commented: 'We're convinced that there's huge potential to grow the Behavioural Insights Team's work - and to deliver impressive results - and are looking forward to helping them make this happen.'

Web site: www.nesta.org.uk .