Behaviour is at the heart of most policy issues and can even affect the length of lives. More than half of potential years of healthy life are lost are due to behavioural and lifestyle factors such as smoking, diet, and lack of exercise.

Over the past two years, the Behavioural Insights Team – widely known as the "nudge unit" – has been seeking to apply lessons learned from psychology and behavioural economics to policy. Where possible this has been done through randomised control trials, so that we can be sure exactly what the effects of a given change have been. The results demonstrated by these trials, often achieved through seemingly small changes, are remarkable. This has moved the use of behavioural insights from a fringe activity into the core of policymaking and public service design.

For example, subtle changes in wording have been found to dramatically increase tax repayment rates. Offering a loft clearance service at cost instead of just cutting the cost of home insulation was found to increase uptake between three and fivefold. Using personalised text messages was even found to treble the repayment rate of court fines without the need for bailiffs. Redesigning jobcentre processes around personal commitments and focusing on strengths was found to boost the number leaving benefits within 13 weeks by more than 15%.

Perhaps the most powerful influence on human behaviour is other people. In a now famous early trial which is Behavioural Insights Team annual report, we found that adding a single line in a letter to people who hadn't got around to paying their tax boosted repayment rates by around 15 percentage points. This line was to the effect that nine out of 10 people in their area had paid their tax on time. Similarly, the most powerful influence on whether we drop litter, take up smoking, give money to charity, drink excessively, exercise, or commit crime is what we think others are doing, and in particular our peers.

The power of social influence and networks – our social capital – runs very deep. Who we know, and how we feel about them, affects our employment, our health, our educational attainment, the efficacy of our government and even rates of national economic growth; it has been proven that counties and regions with higher levels of "social trust" growth faster.

We need to apply these insights into every aspect of our public services. First, this means scrutinising our services from top to bottom with a behavioural lens. We must remove frictions to make services easier to use, and reshape incentives and information to make them more salient and effective. Second, in many areas it implies shifting our focus, and resources, from treating expensive symptoms to acting on behavioural causes, such as in healthcare and crime prevention. Third, it means reshaping services from passive delivery to utilising and nurturing the capacity of citizens to help themselves and each other – what I've previously called the "hidden wealth of nations".

For example, when patients and their relatives open the door to their room in the Lund Patienthotellet in Sweden, the first thing they generally notice is that there are two beds; so the parent or relative can stay with the patient. The result? Better clinical outcomes, higher patient satisfaction, and lower costs. Applying behavioural insights, and nurturing social capital, has very practical implications – improving outcomes, improving quality, and saving money.

David Halpern, director of the Behavioural Insight Team at the Cabinet Office, is a speaker at the Guardian Public Leaders Summit on 6 February 2013.

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