Sprint policy - HMRC

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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

Sprint policy - HMRC

Government & Nonprofit

Transcript of Sprint policy - HMRC