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NAO flags challenges facing UK digital ID scheme

A digital identity (ID) scheme developed by the UK government may become unaffordable to government departments once public funding for the initiative is removed next year, the National Audit Office (NAO) has warned.07 Mar 2019

Under the Verify system, individuals using government online services can choose a certified ID assurance provider with which to verify their identity. This involves answering security questions and entering a unique code sent to an individual's mobile number, email address or issued in a call. When using government services online thereafter, government bodies are able to rely on the third party verifications of individuals' identities.

However, the number of people using the Verify scheme has fallen short of government expectations and last year it announced that funding for the scheme would end when the existing contracts with third party ID assurance providers expire in March 2020.

How the Verify system will operate beyond then is unclear, but according to a new report by the NAO (32-page / 312KB PDF), it could continue to be run by ID assurance providers under a "market-based model". The spending watchdog said, though, that there is a risk that government departments would be unable to afford the cost of ID assurance services under a revamped Verify scheme of that nature.

"GDS is currently considering what the commercial model for Verify will look like post-April 2020, and how private sector providers will take over control and management of Verify," the NAO said. "One possibility is that departments would procure identity verification services directly from the market of private sector providers."

"Departments currently do not pay their full usage costs for Verify but would have to under a market-based model. After April 2020 GDS will no longer set prices, so it cannot guarantee what prices will be determined by the market in future. There is consequently a risk that the market price for identity verification services could be unaffordable for government departments using Verify," it said.

According to the NAO, 3.6 million people have been verified through the Verify system as of February 2019, while 19 government services also use the system. Of those 19 services, 11 provide alternative routes through which users can access the services.

The government's stated target is for 25 million people to have used Verify by 2020, and it envisaged 46 government services being accessible through the system by March 2018.

The NAO said that the "verification success rate" for Verify was at 48% at the beginning of February 2019, and that while some problems with the system have meant "departments have needed to undertake more manual processing than they anticipated", at greater cost to them.

Last month, industry body techUK called on the UK government to develop a new policy to ensure the approach to digital identities is better joined up across the public and privacy sectors.

The new policy should "facilitate the creation of a fully functioning digital identity ecosystem", and should be underpinned by a new "framework of standards" developed through the evolution of its existing 'Verify' scheme, it said.

According to techUK, developing a new digital ID scheme could save up to £10 billion in "reduced identity-linked fraud and greater operational efficiency", whilst doing nothing could, by 2021, see identity theft grow by 50% and a further 50% increase in the cost to business of complying with economic crime rules, such as 'know your customer' and anti-money laundering requirements.