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Labour raises alarm over blockchain at DWP



Chi Onwurah questions who controls data in department’s pilot for benefits system

A leading Labour MP has raised fears over the use of data in the technology behind the virtual currency bitcoin in the payment of welfare benefits.

Chi Onwurah (pictured), the party’s digital economy spokesperson, warned of a repeat of the “fiasco of” – the aborted project to collect and store medical data from GP surgeries.

But the Department for Work and Pensions (DWP) has insisted the benefits trial is safe – that the people taking part have “complete control over their data”, which never reaches the Government.

The controversy has blown up over blockchain – or distributed ledger technology- the encryption system behind bitcoin that has provoked excitement in Whitehall. Earlier in the year Government minister Matt Hancock enthused over its potential, and specialist supplier Credits recently became the first to win a place in the G-Cloud framework.

A DWP trial began in May, giving up to 24 benefit claimants a mobile phone app, provided by a company called Govcoin, to track their spending and help them manage their money.

Ministers have said the participants can “monitor and allocate their spending into categories, check their available balance and plan future spending”.

Privacy worries

But critics have raised the alarm over the privacy implications of putting highly sensitive personal data on a shared ledger that cannot be changed or deleted.

There are concerns that the payment of benefits is a strange choice to start using blockchain, which has previously been put forward as a means of securely distributing Government grants.

Also, there have been suggestions that the DWP is keen to monitor and control how benefits payments are being spent; for example, whether pensioners are spending their winter fuel allowance on energy bills.

Onwurah tabled a parliamentary question to find out whether the blockchain technology will be dismantled once the trial has ended, and which outside organisations will have access to the technology and the data stored as part of the trial.

In reply, Employment Minister Damian Hinds said only: “The participants in the trial have complete control over their data and how it is used; the Government does not receive or see any of that data.

“The DWP takes privacy and security extremely seriously and this will form part of the learning from the trial.”

In the Commons last month, former Work and Pensions Secretary Stephen Crabb admitted he was “not an expert” on the technology – pointing instead to Minister for Welfare Reform Lord Freud.

Need for framework

On that occasion, Onwurah said: “It is a fantastic new technology, but the Government’s own report says that it needs a regulatory, ethical and data framework.

“How do we know that vulnerable benefits claimants are not being forced to share their data without giving proper informed consent?”

She stepped up her criticism on Twitter, saying: “After fiasco of, Govt still not engaging citizens in tech trials.”

The trial is expected to take up to six months, with the results available before the end of the year, Hinds said.

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