DWP trialling use of blockchain to track benefit recipients’ spending

by crypto journalist

DWP trialling use of blockchain to track benefit recipients’ spending

New data sharing technology could be used by the Department of Work and Pensions (DWP) to track benefits’ recipients spending, Socitm has said, depending on the outcome of a new pilot.

In a new briefing on blockchain, a data-sharing system first used in the Bitcoin online currency, Socitm, the representative organisation for local authority IT leaders, says that it is already being used by organisations without public access.

It says that the DWP is part of a consortium piloting a system that tracks benefits claimants’ receipts and spending patterns in order to subsequently offer financial management advice to those who would benefit from it, in what Socitm calls “a not uncontroversial move”.

But a DWP spokesman said: “There are no plans to replace any DWP payment systems. This trial is designed to explore how distributed ledger technology could help support financial inclusion and offer budgeting help, and it does not place any restrictions or limits on what a claimant can spend their welfare payments on, nor tracks how they spend them.”

Matt Hancock, the former Cabinet Office minister, said in April that the government needs blockchain for “building trust in data.”

He added that the government had already committed to giving the Alan Turing Institute a £10m grant to investigate digital currencies and distributed ledger technologies.

Socitm says that blockchain could have a number of other uses. For example, it could develop a new, secure system for sharing patient data on the NHS, following the failure of the care.data programme, as reported in PSE’s sister title National Health Executive.

It also says that blockchain could be used to reduce tax and voter fraud and provide online identification and ‘smart contracting’ to help councils manage costs more efficiently.

Public sector organisations can also now buy blockchain services for the first time through the government’s Digital Marketplace.

The G-Cloud 8 framework, which provides the latest list of companies which can sell their services, includes Credits, a financial technology start-up which provides a distributed ledger platform on which other organisations can build apps.

A distributed ledger is an asset database that can be shared across several networks, sites or institutions. All participants have their own copy of the ledger and changes made in one site are reflected across all copies.

To view the Socitm briefing, click here.

(Image c. Kirsty Wigglesworth from PA Wire)

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