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Government sticks with Digital Economy Act

Parliament Street and Whitehall street sign
Image source: Shots

The UK Government has announced it is retaining the Digital Economy Act of 2017 following a statutory review of the legislation.

The Cabinet Office said the act, which introduced a legal gateway for data sharing between public bodies to reduce fraud, has saved taxpayers at least £137 million from more than 100 pilot projects between 70 local authorities and 17 government departments or agencies.

The pilots typically involve the organisations pooling and comparing datasets to identify anomalies that could indicate suspicious actitivity.

Among the projects that have produced large savings are the Covid-19 Loans Schemes Fraud Analytics Programme, which used HM Revenue and Customs (HMRC) data to identify companies that misrepresented their trading status to save £99.5 million.

Others were: the National Fraud Initiative, saving £14.9 million in council tax and housing benefit payments; identifying fraud in shadow company accounts from HMRC data to save £5.1 million; and the recovery of £5 million in overdue council tax by 29 local authorities.

Consultation findings

The Cabinet Office said it will lay a report on the review before Parliament. Among its findings are that 95% of consultation respondents said the powers in the act to combat fraud had been useful, four of the pilots had been converted to standard practice and there were plans for others to be converted.

It also found that respondents had no privacy concerns about the powers.

Cabinet Office Minister Baroness Neville-Rolfe said: “Retaining the Digital Economy Act - rather than allowing it to sunset - is a vital step that will help to keep public money safe for years to come. The review we have conducted shows that data sharing between public bodies saves taxpayers millions, which is why increasing the integration of data across the public sector is a priority for this government.

“Through the Public Sector Fraud Authority we are already stepping up our fight on fraudsters using these powers - and there is still more work to do as we take the long term decisions to build a brighter future for Britain.”


Mark Cheeseman, chief executive of the Public Sector Fraud Authority, said: “To fight fraud, we need to continually challenge ourselves to use data and technology to its fullest extent in an ethical manner. These powers, and their use, have delivered significant savings for the taxpayer by supporting public bodies to prevent, detect and recover money stolen by fraudsters.

“The Public Sector Fraud Authority will continue to challenge itself, and the public sector to use the latest data and analytics tools to find and prevent fraud against the public sector.”


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