The Digital Economy Act

The Digital Economy Act 2017 sets out to ‘digitalise’ the economy. This article will look at a specific part of that act, the digital government and debt owed to the public sector.

This section of the legislation seeks to reduce debt to the public sector. It aims to do this by ensuring data and information are shared between governmental organisations and departments regarding debt.

Read the legislation in full.

The Digital Government and debt owed to the public sector

The legislation covers the way in which the Government can collect, store, and share an individual’s data, the main justification being that it will enable data sharing between public sector organisations. It will mean that information is shared if there is a public benefit for it.

The data and information sharing will enable the Government to know how much debt there is owed to the public sector and join the gaps to see if there are persistent offenders not paying their way in society.

It will also mean that the system can be used to identify those not claiming benefits they might be entitled to and ensuring that they are treated fairly. Another aim is to ensure that those in debt get the help and support they need to deal with the debt. This will, therefore, inform Government strategy going forward, allowing them to understand the bigger picture of debt owed to the public sector.

Can’t pay versus won’t pay

There will be a greater understanding of the different groups of debtors, this will include:

  • Those who can pay but need additional help or support
  • Those who can pay but have decided not to pay
  • Those who cannot pay due to vulnerability

This will lead to greater transparency, so the Government will be able to identify exactly what percentage these groups are broken down into and will allow appropriate action to be taken.

What does this mean for local authorities?

Anyone requesting to share information must have a credible business case for it including how the benefits of sharing the information will be measured and how it will comply with Fairness Principles, these can be found in section 3.4.

Local authorities will need to look at how they implement the information sharing code of practice, who will manage the process and what they will use the information for.

The data sharing will highlight that, for example, a tax credit claim that has been jointly made as a couple doesn’t tally with a single person claim for a council tax reduction, and this again might not add up with the information from HMRC on the income and tax paid through PAYE. This will be incredibly useful information and will help mitigate fraud and inaccuracy in benefit payments and tax liability.

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