The ‘Nudge Unit’ was a team of economists and psychologists set up inside Downing Street in 2010 to build positive incentives into government policies – nudging people into better behaviour rather than threatening them with fines, to put it simply.
The unit went on to become an international consultancy and today has hundreds of staff advising governments around the world.
However, it has clearly had no influence over the daft way Stormont is funded.
In his speech last week to mark one year since devolution was restored, Secretary of State Hilary Benn tried scolding the executive into reform of public services.
This antagonised Sinn Féin and the DUP but will have no other impact, like all the years of scolding before it.
Of course, there have been threats of fines and attempts at crude bribery. Stormont was restored under a condition to raise £113 million of revenue to unlock a £3.3 billion funding package, a test it has just about managed to pass.
In the New Decade, New Approach deal, which restored devolution in 2020, London demanded reform of public services and the civil service in the wake of the Renewable Heat Incentive scandal, in order to unlock a vaguer funding package. There is no evidence this achieved anything.
But these were shoves, not nudges – no rules were changed to incentivise permanent improvement in Stormont’s management of public money.
One such change might involve the requirement to hand unspent funds back to the Treasury every year.
Many of us will recall the urban myth at school about radiators left running on hot days to ensure the budget was spent.
Apparently this is not how schools are funded but there is an extent to which it is how Stormont is funded, contributing to the sense that Northern Ireland is governed with the heating on and the windows open all the time.
Scotland and Wales negotiated new arrangements in 2012 and 2018 respectively to save their overspends and build up long-term reserves, although they still face some restrictions on how these can be spent.
Stormont has never bothered and can only carry over tiny fractions from one year to the next, typically 0.6 per cent of current or day-to-day spending and 1.5 per cent of capital or investment spending.
The latter is particularly ridiculous considering how many years of planning and delay are involved in major capital projects.
In general, it is inefficient for government to store up piles of cash but forbidding this has hardly brought efficient government to Northern Ireland. Incentivising saving rather than spending is certainly a risk worth exploring.
The division of current and capital budgets is a related issue. London sets these overall totals and Stormont has limited ability to move money between them.
The balance of the rules could be changed to nudge spending towards investment.
David Cameron used to tease Gordon Brown about not fixing the roof while the sun was shining, yet Westminster sees no problem giving Stormont a fixed amount to fix the roof, rain or shine.
The main lesson from RHI is that Stormont is motivated to bring as much extra UK spending into Northern Ireland as possible, without any regard to value for money, because it is all free money as far as the executive is concerned.
Incentivising better behaviour might involve empowering Stormont to raise the extra money itself or keep any savings. Devolving some green energy taxes could have achieved this for RHI.
By far the largest ‘free money’ stream, dwarfing all others, is the £8.5bn benefits bill. Because this is paid separately to the block grant, the Stormont department administering benefits has no incentive to tackle fraud or reduce dependency.
If Stormont kept the savings when people returned to work, its attitude might change.
London would still gain as new workers began paying income tax. Similar ideas are involved the deal to devolve corporation tax, agreed in 2015 but still unused.
Such deals are difficult to negotiate because of the Treasury’s notorious control-freakery, short-termism and miserliness. This is a cause of despair to ministers in Whitehall as much as in Belfast and a problem across the UK: it largely explains the chronic underinvestment in the north of England.
But devolved regions have the means to address it, as Scotland and Wales have shown.
Rather than feeling patronised, Sinn Féin and the DUP could be approaching Benn as a partner to push for better arrangements.
Getting the right nudges from London seems to require nudging London first.