Latest Public Sector News


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 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)

Have you got a story to tell? Would you like to become a PSE columnist? If so, click here.


Bloo Pixie   04/08/2016 at 08:06

This is a blatant breach of Data Protection Laws ... Does this mean that yet again new laws are being written to suit the government no one voted for???

Tom Speed   04/08/2016 at 08:39

This is a disgusting invasion of Privacy and it will limit where people can spend their Social Security, incredibly stigmatizing. Undoubtedly a Tory Policy.

Bridget Gilbert   04/08/2016 at 10:09

I wonder how the government would feel if this was done to them?! Total breach of privacy and the data protection laws! 😠

Pat   04/08/2016 at 11:05

Why can't we do this to the government, they should be accountable on the internet. Every penny they spend, where it goes, how the recipient uses it, why they have been given it. If we have to be followed on our spending then its time they did to, you know, this famous transparency that appears to only count if you are one of the herd (masses).

Dulcie Blythe   04/08/2016 at 12:24

disgusting, who tracks spending of the filthy rich when they buy yachts etc with money they SHOULD have given to HMRC. another case of one law for the rich and another for the poor. undemocratic

Paul   04/08/2016 at 12:49

It starts there, where will it end? They already tried to enforce prepaid cards that would not be used on certain goods... A fiasco (I've worked for the bank that dispersed the prepaid cards)...

Sharon Fisher   04/08/2016 at 13:07

I had the dwp come to my house, I had to sign to give Them permission to my bank account if I didn't I could lose my benefit. He said it was to see If they were paying me enough, also had a good nose Round the lounge.

Craig Secker   04/08/2016 at 13:35

Reading the story I knew what comments would loiter below. The only thing I see wrong here is why the government hasn't just been honest. A system to track spending of welfare claimants to monitor those cheating the system. Data protection my Arse. If people have nothing to hide, who cares. The government can have access to whatever they like if you are suspected of a crime. I have no problem to the government looking at whatever they want because I am not trying to hide anything. We want to feel safe and secure but we don't want our "privacy" infringed, we want to stop benefit cheats as long as they don't catch "me", we want suspected terrorists monitored as long as they don't look at me. If you have nothing to hide then who cares if the government track you buying a blue movie or replacement vibrator. I love how the "super rich" get attacked on these threads. So buy working hard, employing hundreds sometimes thousands of people and paying millions into the economy makes anyone with any tangible assets a crook? So by the same token everyone claiming welfare is a crook too then? No it doesn't, it means like every other "label" there is a minority that break the law. One super rich tax dodger doesn't mean anyone that has worked hard to get through life is too. One welfare cheat doesn't mean everyone on welfare is cheating the system, one Muslim terrorist doesn't mean every Muslim is bad. Every label has a minority, it doesn't mean everyone in that group is bad. By definition that would mean everyone is guilty of crime and cheating!! If we knew half of what our governments did there would be an uproar, Stop reading the Sun and educate yourselves people. 😡😡😡😡 I know this will shock some to the core but life is not black and white. .......... Q the personal attacks and assumptions..............

Sam   04/08/2016 at 13:49

Craig Para 1: 1984, Brave New World, Brazil. THX1138 - dystopia. State surveillance can be used for many things, including control. Para 2: Many of the super rich inherit wealth from the originators of their wealth who DID work hard. Some do pay into the economy, again, many dodge, evade, or avoid tax. Most ordinary people cannot.

Denis   04/08/2016 at 14:05

While noting the data protection and privacy concerns raised by others, I do think there could be some merit in this pilot. We already know that many people on benefits struggle to make ends meet, and that many are addicted to gambling, alcohol, etc. If knowing their spending patterns enables help to be targeted to those needing it, I'm all for it, if it helps stop to cycle of poverty that leads many to crime and worse problems.

Catsybabe   04/08/2016 at 17:48

this wont happen because its breach of data for a start and every person circumstances are different .

Paul   04/08/2016 at 19:43

How about a public blockchain for MP's expenses.

Claire Davey   05/08/2016 at 15:00

Why is this being dangled over people's heads yet again? "Benefits", as they stand now doesn't just mean Jobseekers Allowance - it also includes disability benefits (how are we supposed to buy mobility aids, pay for prescriptions, transport - buses and taxis don't take cards - shopping to be delivered - I have to do it that way, or the shopping simply wouldn't get done - or anything else I need to manage my conditions that these cards probably won't cover), Tax Credits/Child Benefit (which would affect pretty much everyone - why do you think they're so keen to have powers to spy on claimants - this would mean that they could have access to everyone's bank details by default)! This is an attack on all of us, but nobody seems to realise this - they cheer them on because they swallow the tabloid's "scrounger" rhetoric like the good little sheep they are....

Nikgee   06/08/2016 at 07:59

How long is it going to take before someone realises that if the information is in a digital format that it can be hacked? No digital information is safe

Pat Godwin   07/08/2016 at 11:11

Gambling is a huge problem but it is not limited to those on benefits. We cannot tell people how to spend their money however much or little they have from whatever (legal) source. What government can and should do is ensure that benefits are paid weekly. The intention to pay benefits on a monthly basis is a nightmare scenario. Lots of people cope easily with monthly pay. Lots don't. Let's not inflict having to manage a monthly budget on those who may find it difficult to manage.

Bill Brown   08/08/2016 at 14:42

As a pensioner I am technically on benefits. I also have a works pension and salary three incomes. how do they know what pays for what. Probably the vast majority on benefits are there due to circumstances IE long term illness, chronic conditions plus pensioners. Other may have been laid of or hit difficult circumstances IE Woolworths , Comet, BHS employees.

Maureen   06/11/2016 at 23:15

Total disgrace and an invasion of privacy. I would think a lot of money is going to be spend on putting together a system to track all this. Whose to say it will work and track correctly, what benefit monies are being spent where. How will it track it is benefit money or money from savings? Some people on benefits are on them through ill health and may have worked most of their life. Others could be pensioners, there are lots of reason why people are on benefits. Should we not be spending money a lot more wisely on tracking how public funds on spent, when, where and why and creating more transparency here?

Add your comment


public sector executive tv

more videos >

last word

Prevention: Investing for the future

Prevention: Investing for the future

Rob Whiteman, CEO at the Chartered Institute of Public Finance (CIPFA), discusses the benefits of long-term preventative investment. Rising demand, reducing resource – this has been the r more > more last word articles >

public sector focus

View all News


Peter Kyle MP: It’s time to say thank you this Public Service Day

21/06/2019Peter Kyle MP: It’s time to say thank you this Public Service Day

Taking time to say thank you is one of the hidden pillars of a society. Bei... more >
How community-led initiatives can help save the housing shortage

19/06/2019How community-led initiatives can help save the housing shortage

Tom Chance, director at the National Community Land Trust Network, argues t... more >


Artificial intelligence: the devil is in the data

17/12/2018Artificial intelligence: the devil is in the data

It’s no secret that the public sector and its service providers need ... more >