The security marking for this document is UNCLASSIFIED The security marking for this document is UNCLASSIFIED Open Policy Making – the HMRC Journey Nicola Hardaker Rohan Grove
The security marking for this document is UNCLASSIFIEDThe security marking for this document is UNCLASSIFIED
Open Policy Making – the HMRC Journey
Nicola Hardaker
Rohan Grove
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Presentation title | 10/04/23 | 2
WHAT WE WILL COVER
Open Policy Making – what it is and constraints
Where does customer insight fit within the policy making process (and what tools and techniques are available)
Exploration of a couple of tools and techniques∙ Customer Insight∙ Customer Closeness∙ Mapping customer journeys∙ Randomised controlled trials∙ Behaviour Change
Potential threads of insight for tax policy
Final thoughts
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PermissionConstrained Opportunities to experiment
Ambi
tion
Low
H
igh
Informed policy making
Developing policy with users at the heart
Collaborative policy making
Multidisciplinary team
Evidence gathering
Expert engagementConsultation
Public engagement
Multidisciplinary reference group
Scenario testing
Testing
Coproduction
Public experience map
Insight tools Call for challenge
Stakeholder map
Persona testing
Crowdsourcing
Open Policy has to be done within the constraints of your subject and Department
Open Policy Making mindsetOpen Policy Making mindset
HMRC NOV/NOW
HMRC Ambition
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Current Policy ProcessCustomer Insight in the Policy Process
MonitorReview
Evaluate
Idea/problem
Communications& Guidance
Ministerial decision
Pilot/Implementation Recommendation
to Minister
Consultation& Appraisal
Identify Options
Establish objectives & outcomes
Success criteria forHMRC & customers
Who are thecustomers?
What do weknow aboutthem?
Research & Insight
Customer ClosenessCustomer JourneysBehavioural Science
Customer Closeness
Customer Journeys
Total Cost to Serve
Journey Mapping
Evaluation Checklist
Communication:lab
Behaviouralcomms trials
User testing
Speak to stakeholders
Look at it throughthe customer’s eyes
What behaviours do we want?
Test with customers Research & Insight
What is theburden?
Test / Learn / Improve
Write in languagecustomers (& staff)understand
Assess outcomes& performance
Make improvements
Learn & evolve
Trials
Empirical and experimental evidence
Frame your ideas, e.g. what are the behaviours
you want, tax take etc
Frame your ideas, e.g. what are the behaviours
you want, tax take etc
Hypotheses killer questionsConsult the experts
Data Hotspot explorer
Submit the evidence
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Using Insight in HMRC:Gift Aid - moving Gift Aid repayments online Charities and Community Amateur Sports Clubs (CASCs)Business issue: Charities/ CASCs currently claiming Gift Aid using the R68i form (40% estimated to use ‘print and post’ method: fill in online, download from the HMRC website and print form and 60% estimated to use paper forms)
Desired position: 95-100% of Charities/ CASCs registered with the Government gateway and filing their Gift Aid repayment claims online
HMRC approach: send all Charities/ CASCs repeated mail shots and lengthy letters to increase awareness and influence behavioural change
Concerns: quality and reliability of HMRC charities and CASCs data leading to targeting the ‘wrong’ population, cost versus effectiveness of these forms of communication and either lower or higher than expected take up and the implications of that
Research: clear definition and understanding of the target population. Clear steers on likely take-up, communication and support needs.
Contact by phone doubled – however, this was expected
and planned for as a result of the research
Contact by phone doubled – however, this was expected
and planned for as a result of the research
Of 87,000 known charities,
45,000 are registered & file
their Gift Aid repayment
claims online
Of 87,000 known charities,
45,000 are registered & file
their Gift Aid repayment
claims online
Since 29 April 2013, over
600,000 hits on HMRC’s
dedicated Charities Online
web page
Since 29 April 2013, over
600,000 hits on HMRC’s
dedicated Charities Online
web page
From an original planned 8 page
mail shot – reduced to 1
page and phased
From an original planned 8 page
mail shot – reduced to 1
page and phased
ImpactImpact
7 months Post Launch
7 months Post Launch
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SCHOOL MEALS: This was initially a case of classic ‘marketing myopia’. We focused on the food on the plate. But with the insight we understood that more children would eat school lunch ONLY if we improved the experience e.g. no waiting time, a more sociable environment, letting friends eat together
REMOVING THE ADMIN BURDEN FROM SMEs: The Better Regulation Executive now understands that what small businesses most dislike is any change - even if it is ‘for their own good’. Constant small improvements can, in fact, be felt to increase the regulatory burden
CARERS STRATEGY: In all literature we made the mistake of assuming people knew they were carers and would willingly seek help. In fact there was a real barrier – people didn’t identify themselves as “carers” and using that word was ineffective because the people we needed to reach didn’t realise the message was targeted at them.
“I’m not a carer.
I’m just looking
after the person I
love”
“Lunch isn’t
about food- It’s
about my
friends”
“Just tell me what to do and when to do it- then leave me alone”
Examples of Insight from Government
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Customer ClosenessWhat is Customer Closeness?
Spending time with your customers in order to help you understand the
reality of their lives by
• Listening
• Observing∙ Asking questions carefully
What do we get out of it?
Customer closeness activities have delivered a greaterappreciation of how customers find HMRC products & processes . They
• Challenge our assumptions
• Create greater empathy
• Raise belief in the value of designing around the customer
• Gives us a better basis for engaging with them
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Customer Closeness in action
The Event Outcome
•Large event with 50 self employed individuals who pay Class 2 NICS
•Structured conversations and •product stimulus
• Customers told us they were confused by the process, products and communications
•Large event with 50 self employed individuals who pay Class 2 NICS
•Structured conversations and •product stimulus
• Customers told us they were confused by the process, products and communications
• Springboard to further investigation and exploration
•Products simplified and submission to Minister on further simplification
•Led to a reduction in telephone calls of 100,000 with projected savings (over 5 years) of £10m
•And Budget Announcement on simplified collection via self assessment
• Springboard to further investigation and exploration
•Products simplified and submission to Minister on further simplification
•Led to a reduction in telephone calls of 100,000 with projected savings (over 5 years) of £10m
•And Budget Announcement on simplified collection via self assessment
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What are Customer Journeys?
Cabinet Office definition:
“A customer journey is a description of the experience a customer has as they encounter a service or a set of services, taking into account not only what happens to them but their responses to the experience.”
There are different types of journey from a customer perspective:
∙ Literal - physical journey from A to B∙ Experiential – an interaction with an organisation∙ Relationship Building - journeys that will endure over time∙ Transactional - journeys that involve fixed steps∙ Emotional/Rite of Passage - journeys that have a significant emotional
element
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Improved customer experience
See and approach things from a
customer perspective
Meet expectations(often raised byprivate sector)
Understand how muchwe can expect people
to do
Getting it right when it really matters
Deliver information and messages at
the best time
Deliver seamless, streamlined
experience that cuts across silos
Greaterefficiency
Plan the most efficientand effective experience
Anticipate demands
Prioritise betweencompeting calls
on resources
Identify ‘baton-change’points where thingsare most likely to fall
down
Identify cheapest cost to serve for
HMRC and customers
Set performanceindicators
Mapping customer journeys
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Behavioural insights and randomised control trials
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Chasing debt : Two letters, one difference
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Source: Hallsworth et al. (2014) ‘The Behavioralist as Tax Collector’, NBER Working Paper
Findings: More specific norms had more impact:
“The great majority of people in your local area pay their tax on time. Most people with a debt like yours have paid it by
now.”
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Findings: Hard economic incentives didn’t perform better
Source: Hallsworth et al. (2014) ‘The Behavioralist as Tax Collector’, NBER Working Paper.
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Emails to UK businesses offering support• Much of HMRC’s support for small business is now provided digitally
• HMRC theory of change - use of support reduces error, increases tax compliance and improves customer experience
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Increasing use of digital services is as important as existence of these services as part of a policy: Multiple trials (w/ BIS / BIT) looking at >10 different designs of emails & 75k emails sent.
Almost doubled effectiveness as measured by click through to tax information and support – rolled out into business as usual.
Supports policy objective and political imperative - i.e. help citizens avoid errors, make tax easier for them and reduce tax evasion etc.
0% 2% 4% 6% 8% 10% 12% 14% 16% 18%
VAT trial
Employer trial
Number of Clicks as a Percentage of Viewed Emails
Simplified Original
Trial results - very successful in increasing response to offers of support in emails
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In one of the trials a social norm message didn’t have a significant effect in increasing click through to non-tax support
The variable applicability of behavioural insights in different contexts is not a cause of concern for us – underlines the importance of test and learn.
0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% 3.5%
Mentorsme
EFG
Number of Clicks as a Percentage of Viewed Emails
No social norm
Social norm
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Example of wider work: how to increase honesty and reduce errors in an online portal where citizens declare information
COMMUNICATIONS
Log in / identification
Online service / product – e.g. declaration of income / payments
COMMUNICATIONS
Portal Exit from portal
1. Reporting and payment cycles
2. Prompting honesty in
declarations
3. Agency and
information
4. Outbound communications
that work in digital
Accountability threats
Moral reminders
Norms
Prompts / messagesTimeboundinstructions
Provide feedback on
potential error
Third party data / pre-population
Framing of
penalties / audits
DefaultsPersonalisation
COMMUNICATIONS
Log in / identification
Online service / product – e.g. declaration of income / payments
COMMUNICATIONS
Portal Exit from portal
1. Reporting and payment cycles
2. Prompting honesty in
declarations
3. Agency and
information
4. Outbound communications
that work in digital
Accountability threats
Moral reminders
Norms
Prompts / messagesTimeboundinstructions
Provide feedback on
potential error
Third party data / pre-population
Framing of
penalties / audits
DefaultsPersonalisation
1. Reporting and payment cycles5. Making it easier for customers to interact with the tax system, avoid error and comply (/fairness)
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Summary
• Our focus:∙ Tax compliance but also work on other outcomes/issues ∙ Outcomes and problems – i.e. policy issues. ∙ Distilling range of evidence/insights to solve specific problems.
• What works is what works! We as ‘experts’ can provide options/opinions but RCTs and other robust evaluation techniques support a test, learn and adapt process.
• HMRC has had considerable success using behavioural insights & experimental approach to deliver policy outcomes. E.g. £220m debt repayments brought forward in 12-13.
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Product from:Current Policy ProcessThe Policy Process
MonitorReview
Evaluate
Idea/problem
Communications& Guidance
Ministerial decision
Pilot/Implementation Recommendation
To Minister
Consultation& Appraisal
Identify Options
Establish objectives & outcomes
Success criteria forHMRC & customers
Who are thecustomers?
What do weknow aboutthem?
Research & Insight
Customer ClosenessCustomer JourneysBehavioural Science
Customer Closeness
Customer Journeys
Total Cost to Serve
Journey Mapping
Evaluation Checklist
Communication:lab
Behaviouralcomms trials
User testing
BE&ITCC&A
BCT
Legend
Speak to stakeholders
Look at it throughthe customer’s eyes
What behaviours do we want?
Test with customers Research & Insight
What is theburden?
Test / Learn / Improve
Write in languagecustomers (& staff)understand
Assess outcomes& performance
Make improvements
Learn & evolve
Qun Trials
Empirical andexperimental
evidence
Background of insights from behavioural
research on tax and beyond
Background of insights from behavioural
research on tax and beyond
Understanding of what works in similar
circumstances – getting close to
customers
Understanding of what works in similar
circumstances – getting close to
customers
Control trials (/ A-B testing)
Control trials (/ A-B testing)
Open policy making and seeking behavioural
insights from customers & external organisations
Open policy making and seeking behavioural
insights from customers & external organisations
Ministerial interest in customer
evidence & behavioural economics
Ministerial interest in customer
evidence & behavioural economics
Evaluation is key to understanding actual customer behaviour
and therefore effectiveness of policy
Evaluation is key to understanding actual customer behaviour
and therefore effectiveness of policy
Adaptable off the shelf policy
levers
Adaptable off the shelf policy
levers
Behavioural communications – vital to successful
policy delivery
Behavioural communications – vital to successful
policy delivery
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For more information contact:
Thank you
Name Rohan.Grove email [email protected]
Nicola Hardaker email [email protected]
Location: File path and Name