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Government to retain data sharing powers in Digital Economy Act after review of legislation

The Government is to retain the data sharing powers introduced in the Digital Economy Act 2017 after a statutory review of the legislation.

The statutory review found the Act had enabled more than 100 data sharing pilots across 70 local authorities and 17 government departments or agencies.

The 2017 Act was introduced to provide a permissive legal gateway for data sharing between public bodies in order to combat fraud against the public sector and reduce debt owed to the public sector. 

The Cabinet Office claimed that the powers had saved taxpayers at least £137m since coming into force. This included:

  • £99.5m of fraud identified in Covid-19 loan schemes; 
  • £14.9m of fraud identified in council tax and housing benefit systems by the National Fraud Initiative, which compared 20 million local authority records with data from HM Revenue and Customs;
  • £5.1m of fraud identified in shadow company accounts; and
  • £5m of overdue council tax recovered by 29 local authorities using data from HM Revenue and Customs to identify debt owed by those in employment.

The statutory review, which was overseen by the Public Sector Fraud Authority, had been due to take place in 2021 but was delayed by the Covid-19 pandemic.

There are plans for further pilots to be converted to standard practice, including onboarding more than 300 local authorities to a scheme identifying overdue council tax. 

A consultation found respondents had no privacy concerns about the new powers, the Cabinet Office said, adding that “this finding backs up a recent report published by the Information Commissioner’s Office which concluded the Digital Economy Act has mechanisms in place to ensure robust scrutiny is applied to all data sharing agreements”.  

Baroness Neville-Rolfe, Minister of State, Cabinet Office, 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."

Mark Cheeseman, Chief Executive, 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."