Marketizing the digital state: the failure of the ‘Verify’ model in the United Kingdom

Verify, the UK government’s digital identity program, sought to construct a market for identity verification in which companies would compete. But the assumption that companies should be positioned between government and individuals who are trying to access services has gone unquestioned.

The story of the UK government’s Verify service has been told as one of outright failure and a colossal waste of money. Intended as the single digital portal through which individuals accessing online government services would prove their identity, Verify underperformed for years and is now effectively being replaced. But accounts of its demise often focus on technical failures and inter-departmental politics, rather than evaluating the underlying political vision that Verify represents. This is a vision of market creation, whereby the government constructs a market for identity verification within which private companies can compete. As Verify is replaced and the UK government’s ‘digital transformation’ continues, the failings of this model must be examined.

Whether an individual wants to claim a tax refund from Her Majesty’s Revenue and Customs, renew her driver’s license through the Driver and Vehicle Licensing Agency, or receive her welfare payment from the Department for Work and Pensions, the government’s intention was that she could prove her identity to any of these bodies through a single online platform: Verify. This was a flagship project of the Government Digital Service (GDS), a unit working across departments to lead the government’s digital transformation. Much of GDS’ work was driven by the notion of ‘government as a platform’: government should design and build “supporting infrastructure” upon which others can build.

Squarely in line with this idea, Verify provides a “platform for identity.” GDS technologists wrote the software for the Verify platform, while the government then accredits companies as ‘identity providers’ (IdPs) which ‘plug into’ the platform to compete. An individual who seeks to access a government service online will see Verify on her screen and will be prompted by Verify to choose an identity provider. She will be redirected to that IdP’s website and must enter information such as her passport number or bank details. The IdP then checks this information against public and private databases before confirming her identity to the government service being requested. The individual therefore leaves the government website to verify her identity with a separate, private entity.

As GDS “didn’t think there was a market,” it aimed to support “the development of a digital identity market that spans both public and private sectors” so that users could “use their verified identity accounts for private sector transactions as well as government services.” After Verify went live in 2016, the government accredited seven IdPs, including credit reporting agency Experian and Barclays bank. Government would pay IdPs per user, with the price per user decreasing as user volumes increased. GDS intended Verify to become self-funding: government funding would end in Spring 2020, at which point the companies would take over responsibility. GDS was confident that the IdPs would “keep investing in Verify” and would “ensure the success of the market.”

But a market failed to emerge. The government spent over £200 million on Verify and lowered its estimate of its financial benefits by 75%. Though IdPs were supposed to take over responsibility for Verify, almost every company withdrew. After April 2020, new users could register with either the (privatized) Post Office or Digidentity, the only two remaining IdPs. But the Post Office is “a ‘white-label’ version of Digidentity that runs off the same back-end identity engine.” Rather than creating a market, a monopoly effectively emerged.

This highlights the flaws of the underlying approach. Government paid to develop and maintain the software, and then paid companies to use that software. Government also bore most of the risk: companies could enter the scheme, be paid tens of millions, then withdraw if the service proved less profitable than expected, without having invested in building or maintaining the infrastructure. This is reminiscent of the UK government’s decision to bear the costs of maintaining railway tracks while having private companies profit from running trains on these tracks. Government effectively subsidizes profit.

GDS had been founded as a response to failings in outsourcing government-IT: instead of procuring overpriced technologies, GDS would write software itself. But this prioritization of in-house development was combined with an ideological notion that government technologists’ role is to “jump-start and encourage private sector investment” and to build digital infrastructure while relying on the market to deliver services using that infrastructure. This ideal of marketizing the digital state represents a new “orthodoxy” for digital government; the National Audit Office has highlighted the lack of “evidence underpinning GDS’s assumptions that a move to a private sector-led model [was] a viable option for Verify.”

These assumptions are particularly troubling here, as identity verification is an essential moment within state-to-individual interactions. Companies were positioned between government and individuals, and effectively became gatekeepers. An individual trying to access an online government service was disrupted, as she was redirected and required to go through a company. Equal access to services was splintered into a choice of corporate gateways.

This is significant as the rate of successful identity verifications through Verify hovered around 40-50%, meaning over half of attempts to access online government services failed. More worryingly, the verification rate depended on users’ demographic characteristics, with only 29% of Universal Credit (welfare benefits) claimants able to use Verify. If claimants were unable to prove their identity to the system, their benefits applications were often delayed. They had to wait longer to access payments to which they were entitled by right. Indeed, record numbers of claimants have been turning to food banks while they wait for their first payment. It is especially important to question the assumption that a company needed to be inserted between individuals and government services when the stakes – namely further deprivation, hunger, and devastating debt – are so high.

Verify’s replacement became inevitable, with only two IdPs remaining. Indeed, the government is now moving ahead with a new digital identity framework prototype. This arose from a consultation which focused on “enabling the use of digital identity in the private sector” and fostering and managing “the digital identity market.” A Cabinet Office spokesperson has stated that this framework is intended to work “for government and businesses.”

The government appears to be pushing on with the same model, despite recurrent warning signs throughout the Verify story. As the government’s digital transformation continues, it is vital that the assumptions underlying this marketization of the digital state are fundamentally questioned.

March 30, 2021. Victoria Adelmant, Director of the Digital Welfare State & Human Rights Project at the Center for Human Rights and Global Justice at NYU School of Law.