The move to self-financing means in Haringey we need to improve our performance in collecting council tax and business rates.
With collection rates standing at 95.9% we began to think about using ‘nudge’ or behaviour change techniques in our communications to improve performance. By making some small changes to our approach we’ve significantly increased income.
We wanted to target the small minority of people who weren’t paying their council tax bill on time. We used reminder letters to encourage people to pay. Working with a company that specialises in applying behavioural science for social good, we wanted to see how we could be more effective in our communications to nudge people who weren’t paying.
We also wanted to monitor and evaluate the impact of our new approach. We wanted to use a randomised control trial (also known as a natural field experiment) as it was the only way to be sure the change was a result of the intervention. While other councils have used nudge approaches, this is one of the first natural field experiments of its kind and scale relating to council tax collection.
Roughly 15,000 households fall into arrears, which is a large sample size on which to test different messages and the results. During the trial we randomly split late-paying households into three equally sized groups. One group received the standard reminder letters (the control group) that the council has always used. This was applicable for the first reminder, a second reminder and the pre-court summons.
Of the other two trial letters, one referred to social norms and the second referred to omitted behaviours (where the resident had actively chosen not to pay). The letters also used colour and message placement to influence behaviour.
Over the 75 days of the experiment, the additional measured revenue we achieved from the behaviourally designed letters was more than £111,000. The estimated full-year effect is in the region of £500,000; a 0.5% increase to Haringey’s £113m total annual council tax collection. These results will dwarf the cost of implementing the project.
In addition, the richness of the data gathered within the trial helped improve our understanding of how people in different council tax bands and communities respond to changes in communications, such as improving their understanding of the correlations between compliance rates, property values and household income. These responses were not as we had initially assumed they would be and that presents opportunities to target communications more effectively beyond council tax.
We have taken some critical factors from the project to incorporate into other behaviour change projects. The key lesson is that having good quality data available is critical for interventions to have maximum impact and to track their effects.
There are many opportunities to apply the learning to other reminder letters, but moving beyond raising additional revenue, we want to use behaviour change in managing demand challenges in adult social care, public health and street scene.
David McNulty, head of the corporate delivery unit, Haringey LBC