Imagine you are a policymaker drawing up a contract with a supplier. The standard paperwork says your department will pay the supplier within 28 days. But the supplier is a new, small social enterprise and they ask for a shorter period to help them keep on top of their cashflow. You consider their request.
That in itself is quite unusual.
First, as you are aware that there’s some guidance on this. You’ve heard of The Compact (“facilitating prompt payment… and payment in advance, where appropriate) and HMT guidance (“it is vital that the timing of payments is considered in collaboration with, and not imposed upon, the organisation”). That won’t always be the case.
Second, you are relatively inexperienced, believe you can make a difference and feel strongly enough about doing things properly, rather than opting for an easy life. That, sadly, won’t always be the case.
Finally, you know that another department pays this supplier after 5 days in recognition of their particular circumstances. That also won’t always be the case.
So you pursue their request. You talk to your colleagues. They don’t like it. These are standard terms and conditions. No-one has asked for this before. But as you persist (which won’t always be the case!) they agree to move from 28 days to 15 business days. That’s not great. But it's not bad.
A few months later, a Minister announces that all invoices should now be paid within 10 days. You mention it to your finance colleague - who hasn't heard about it. She gets back to you a few days later, saying apparently it’s “only an aspiration“ and doesn’t require any action.
What does this tell us?
The road from rhetoric to reality is long and winding. Even with social enterprises, the Treasury, ministers and officials working together, things don’t always get sorted. What motivates administrative, finance and legal staff, for example, to behave in a certain way can matter more.
Behavioural economics has become increasingly popular in recent years, acknowledging the limits of pure textbook economics. Perhaps we need to start thinking about behavioural policymaking?