Published On: 17 June 2014
Organisation: Cabinet Office Behavioural Insights Team
Country: United Kingdom
Level of government: Central government
Sector: General public services
Type: Communication, Methods
Launched in: 2011
Overall development time:
Public sector fraud, error and debt cost the UK government billions of pounds each year, costs that are borne by law-abiding taxpayers and firms. Using behavioural theory, HMRC (Her Majesty's Revenue and Customs) sought to understand the impact different contexts, messages and incentives had on debtors’ likelihood to pay overdue taxes.
A randomised control trial approach (RCT) was used to test the impact of variations in wording (such as more personalised language, or emphasising social norms) on hundreds of thousands of letters sent to debtors. Analysing the results of this RCT revealed which wording was more effective in persuading people to repay their debt.
The innovation advanced GBP 160 million of tax debts to the Exchequer over the six-week period of the trial.
Develop staff capacity, Improve effectiveness, Improve efficiency
General population, Government bodies, Government staff
The UK population benefits from reduced tax non-payment, through reduced borrowing costs, greater fairness in tax paying, and more money available for public services.
The Cabinet Office Behavioural Insight Team has worked with a wider range of public services to test the opportunity for applying behavioural theory more widely, including in employment support and promoting charitable giving.
More revenue collected by letters, resulting in less manual processing and lower implementation costs.
Improved clarity of letters.
Randomised controlled trial of different letter variants. Logistic regression on payment rates; ordinary least squares regression for improvements in day of payment.
Frontline staff in the tax agency, in collaboration with staff from the central coordinating department.Design time: 2 months
The impact of the letters was assessed through randomised controlled trials.
A standard letter was created which included basic payment information. This acted as the ‘control’. A trial letter was then created, which was identical to the control – except for the inclusion of a short phrase that encouraged the recipient to pay. These phrases were based on behavioural insights (for example, a “social norm” message might point out that most other people have paid). Taxpayers were randomly allocated to get trial or control letters. We then analysed whether more people paid if they got a trial letter or a control letter. Since the allocation was random, we could infer that the higher payments were because of the specific phrases included.Testing time: 2 months
The innovation used behavioural insight techniques to improve the efficacy of existing management information services and letter-issuing infrastructure.
The results have been published in government reports. Academic publication of results is forthcoming. The UK Government’s Behavioural Insight Team has been working with a range of public services to extend the use of behavioural theory into new areas.
Initial difficulties around randomisation – to determine who received which variation of wording – were resolved through innovative use of taxpayer ID numbers. More specifically, ranges of taxpayer numbers (which are randomly generated) were allocated to receive certain letters.
The Cabinet Office’s Behavioural Insights Team was involved in the conceptualisation / development / testing and implementation phases.
Academics were involved in the implementation phase.
Informal consultation with the private sector at the conceptualisation phase.
This innovation was virtually costless to implement.