Nudge unit to become joint venture

Cabinet Office Behavioural Insights Team - "advancing behavioural science in public policy"

Cabinet Office Behavioural Insights Team – “advancing behavioural science in public policy”

It has just been announced by the Cabinet Office that the government’s ‘nudge unit’ — its behavioural insights team — is to be spun-out as a profit-making joint venture.

In a press release dated 1st May 2013 the Cabinet Office confirmed that it is launching a competition to find a commercial partner for the business.

The unit will be part-owned by the government, its employees, and a private sector investor/partner.

While this is the first policy unit to be spun-out, it isn’t in fact the first such “joint mutual venture”. That was MyCSP, the body that administers the civil service pension scheme and benevolent fund (see post).

35% of MyCSP is owned by the government, 40% by private sector partner/investor Equiniti, and 25% by its employees. It seems at least likely that the nudge unit spin-out will be a similar model.

Can we draw any lessons from this regarding the government’s wider “mutuals agenda”?

It almost certainly confirms a growing emphasis on “profit-making” rather than “mutual”. Indeed, in the case of the nudge unit the term “mutual” isn’t actually used at all.

As we said in a recent briefing on public service reform:

“It is important to emphasise that the Cabinet Office does not favour mutuals which are so-called ‘not for profit’ over those which are ‘for profit’. Indeed, it has been said that the government is ‘agnostic’ on this issue. […] As a result of this, not all mutuals are social enterprises in the widely accepted sense of being not for personal profit.”

The Guardian reports the story here, and the BBC here.

Update 03/05/13: Co-operatives UK’s Ed Mayo and SEUK’s Peter Holbrook have both issued statements saying that ventures in which employees own only 25% of the business cannot accurately be termed “mutually owned”. Read more here.

Update 07/05/13: Ed Mayo writes in a piece in the Guardian on Friday 3rd May:

“But the government’s entry definition of mutual ownership, with a paltry 25% for staff and no rights for service users, gives no guarantees of member control and leaves investors in charge. It is a start, but when public services have been sold in this way before, such as the bus firms in the 1980s, the assets moved as night follows day from being employee-owned into private hands.

We respect the right of government to try different models for public services. But with respect, we don’t want to be sheep’s clothing for someone else’s animal, whether predator or prey.”

Birmingham UK. Freelance research, evaluation and policy consultant specialising in social enterprise and the third sector. I maintain the BSSEC blog and website
  1. Charles Rapson Reply

    Thought provoking post.

    I am curious as to central governments definition and understanding of ‘mutuals’, co-operatives, social enterprise and social firms – even the ‘Third Sector’ in general. I have recent experience that suggests the government favours its definition of mutuals which is partnerships between public, private and others – the others may or may not be strictly ‘Third Sector’ (as per MyCSP).

    We can debate until the cows come home about the government’s understanding or agenda or motives but the fact is, they are what they are. By the time we educated them, a new government will be in power with a new agenda. In my humble opinion, the best bet (and only way) is to understand the game and play to our strengths.

    • Alun Severn Reply

      Charles, thanks for your comment.

      “I am curious as to central governments definition and understanding of ‘mutuals’, co-operatives, social enterprise and social firms…”

      Hmm, I suspect the only real answer here is “a moveable feast” — as in, mutuals will be whatever the government determines them to be, in whatever the particular circumstances are, and to some degree determined by the commercial and profit-making potential of the service/unit/function in question…

Leave a Reply