Nesta is appointed third-party partner in spin-out of the government's 'nudge unit'

The charity will run the Behavioural Insights Team as a joint venture with the government and staff; Nesta chief executive Geoff Mulgan says there's huge growth potential

Geoff Mulgan
Geoff Mulgan

The innovation charity Nesta will provide almost £2m of support to spin out the government’s ‘nudge unit’ as a mutual. 

The Cabinet Office announced last year that its Behavioural Insights Team, which was set up in 2010 to encourage people to make better choices without using legislation, would be run as a joint venture between the government, its employees and a third-party partner.

It has announced today that Nesta has been appointed as the third-party partner – Nesta will provide £1.9m of financing and services support. This includes accommodation in Nesta’s offices, business support services such as HR and a loan made on commercial terms.

A third of the shares of the new mutual will be owned by staff, a third by Nesta and a third by the government.

The Cabinet Office said the organisation would be able to sell its services all over the world.

The government said the unit was considered a world leader in the application of insights from the behavioural sciences. It has been credited with helping to increase the number of organ donors by sending out simple appeals along with driving licence renewal forms, and with increasing the income from taxes by £350m by modifying the messaging sent out with self-assessment forms by HM Revenue & Customs.

The ‘nudge unit’ will continue to work for the Cabinet Office, the department said, and provide the same level of service. It will also be given a framework agreement, allowing it to work with any other public body in the UK for a fee.

Its board will comprise executives from the unit and Cabinet Office and Nesta representatives.

Geoff Mulgan, chief executive of Nesta, said his organisation was excited to be working with the unit because of the culture of innovation found in both organisations.

"We’re convinced that there’s huge potential to grow its work – and to deliver impressive results – and are looking forward to helping them make this happen," he said.

Francis Maude, the minister for the Cabinet Office, said he wanted to see "a diverse mixed economy with more new providers emerging".

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