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IPPR calls for public data trust on financial services

28/01/20

Mark Say Managing Editor

A leading thinktank has urged the Government to develop a new public data trust on financial services and a digital platform for self-employed workers.

Pound signs

The Institute for Public Policy Research (IPPR) has made the recommendations in its Not Cashless, But Less Cash report, addressing how the decline in the use of cash is affecting inclusion in the UK.

It has also prompted the Local Government Association (LGA) to highlight the role of councils in fostering digital inclusion.

The crux of the report is that the move to a digital economy that makes less use cash creates the risk of people who are still reliant on it being excluded.

One of its solutions is that financial service providers, including tech firms entering the market, should be required to submit anonymised and aggregated data to Digital Britain, a public service through which government, the public and innovators could access data trusts.

These would provide a legal structure for the stewardship of data, under which they would be permitted by those who collect and hold it to make decisions on how it is used and shared. This form of data infrastructure could be used by local authorities, businesses, charities or tech developers, the report says.

Data commons role

It also points to the potential of a ‘data commons’ for pooling and sharing the benefits of data insights and opening up the rights beyond the company that controls the technology that creates the data. While the technology infrastructure to mine and harvest data would be privately owned, the data could be accessed through the public through commons, with rules over access and how it is used.

Alongside this, a new Office for the Digital Commons should work to combine existing regulatory platforms to level the playing field on data access, and work with regulators to maintain competitive personal finance markets.

The report also points to the problems of some self-employed workers in dealing with the decline in cash and gets behind a recommendation of the Taylor Review of modern working practices for the development of a digital platform to support them.

This would help them to manage payments, streamline tax accounting and apply to access social security when relevant. The report says it should be developed with the joint strategic aims of maximising tax revenues by capturing previously undeclared income, and strengthening employment protections for self-employed workers.

The report also calls for a digital transition levy on banks and financial services provider, targets for investment to protect cash access for people who still rely on it, and for big technology companies to open up their data upon entry into the personal finance market.

Need for urgency

The IPPR’s economic analyst and lead author Rachel Statham said: “Urgent action is needed to set the UK on course towards an economy that is both more digital and more just.

“By getting ahead now, we can invest the billions needed to get every part of the country ready for a more digital future and protect access to cash where people rely on it. This could see the potential benefits brought by a move away from cash invested to narrow rather than widen inequalities, handing control over from ‘big tech’ and banks to people and communities.

“The move away from cash should only happen as fast as people are ready for, and the benefits of doing so should be shared.”

LGA response

In response to the report, the LGA has flagged up the importance of local authorities in promoting inclusion and its own Digital Inclusion Programme.

Chair of its improvement and innovation board Councillor Peter Fleming said: “Councils are at the heart of their communities and making sure that everyone can benefit from the digital revolution is key and councils are trying to embed digital inclusion into the heart of everything they do.

“Getting people online can change their lives for the better in so many ways. As part of the LGA’s wider sector led improvement offer, our Digital Inclusion Programme is helping councils to reach out and provide a vital service for residents who don’t have access or confidence to use digital.”

Under the programme 10 councils have received funding for projects to support people who lack the skills, infrastructure and confidence to go online.

 

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