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GDS cut expected benefits of troubled Gov.uk Verify system by 75%

In a highly critical report, the National Audit Office says it is 'difficult to conclude' that past decisions to continue with the flagship digital identity system have been justified

The Government Digital Service (GDS) had to reduce estimates for the expected benefits of its Gov.uk Verify programme by 75% due to the underperformance of the flagship digital identity system. But even then, the National Audit Office (NAO) was still unable to “replicate or validate” GDS’s claimed savings.

In a highly critical report, the government spending watchdog found that “it is difficult to conclude that successive decisions to continue with Verify have been sufficiently justified”.

In its original 2015 business case, GDS forecast Verify would deliver £873m of benefits between 2016 and 2020. This year that figure was revised down to £217m. The NAO report also pointed out that the amount is not a direct cash saving, but a GDS estimate based on “departmental efficiencies” – for example, £148m was attributed to costs avoided by Whitehall departments not having to build their own systems.

“On the evidence made available to us, we have not been able to replicate or validate the benefits estimated by GDS,” said the NAO.

Up to September 2018, Verify had spent £154m and been subject to more than 20 internal and external reviews due to concerns about its performance and GDS attempts to reset the programme.

The Cabinet Office has capped further spending to March 2020 at £21.5m, when government funding for the programme will cease and Verify will be handed to the private sector. The Department for Work and Pensions (DWP) is contributing £12m to support Universal Credit.

However, the NAO noted that the total cost of Verify is likely to be much higher because the £154m figure does not include costs incurred by departments for reconfiguring systems to use Verify.

In 2015, GDS’s intention was to fund Verify through income generated by charging departments for using the system. The aim was to charge £1.20 per year, per user. GDS estimated that by 2018, this would generate £19m per year, but due to the low take-up of the system, only £1.3m was brought in during 2017-18. The average price GDS pays to private sector identity providers for each new user is £20.

“The performance of Verify has consistently been below the standards set out in each of its business cases. GDS intended that Verify would be largely self-funding by the end of March 2018, but low take-up means that government continues to fund it centrally,” said the NAO.

Programme management failure

Public Accounts Committee chair Meg Hillier said Verify was a “textbook case” of “over-optimism and programme management failure” in government IT.

“Despite spending at least £154m on Verify, only half the people that try to sign up are able to use it and take-up is much lower than expected. More worrying, it is not yet clear what it will cost for government departments to continue using Verify when government funding stops next year,” she said.

The NAO report documents how far below expectations Verify has delivered:

  • In 2016, GDS expected 46 government services to have connected to Verify by March 2018, but currently only 19 services use the system, with 11 of those also offering alternative ways to log in.
  • By February 2019, Verify had 3.6 million users, against a target of 25 million by 2020. The NAO estimated that just 5.4 million sign-ups will be achieved by April 2020.
  • Only 48% of people who attempt to register for Verify are able to successfully create an account, compared to a target of 90% in the 2015 business case.

For Universal Credit – Verify’s biggest government customer – only 38% of benefit claimants that try to use the system are successful. As a result, DWP expects to spend an additional £40m over 10 years on manual identity verification.

“The constraint on closing Verify entirely is Universal Credit, which uses it to verify the identities of claimants. However, most claimants cannot actually use Verify to apply for Universal Credit,” said the NAO.

GDS has also had to subsidise departments’ use of Verify, because the low rates of user adoption meant costs did not fall as quickly as expected, and most departments have not yet handed over the cash they were meant to pay.

“High prices meant that GDS has continued to subsidise departments for using Verify. Moreover, most departments have not paid the Cabinet Office and GDS even for subsidised services,” said the report.

“HM Revenue & Customs (HMRC) has paid £6.7m for its Verify usage, but between 2016-17 and 2018-19 no other department paid for using Verify, despite being issued invoices by the Cabinet Office. It is unclear why some departments have not paid these invoices.”

Early GDS business cases assumed that all HMRC’s annual PAYE users would use Verify, but HMRC estimated that only 4% of its customers currently do so.

Stop funding

The report also confirmed that – as by revealed by Computer Weekly – Whitehall’s Infrastructure and Projects Authority (IPA) recommended in July 2018 that Verify “be closed as quickly as practicable”. As a result of the IPA decision, the Cabinet Office and the Treasury decided to stop funding Verify beyond the March 2020 deadline for handing over to the private sector.

“In May 2018, the Cabinet Office and HM Treasury approved GDS’s proposal to reset Verify to improve its performance and value for money,” said the NAO report.

“The chief secretary to the Treasury adopted tests recommended by the IPA, requiring GDS to work with other departments to get their buy-in and increase the number of user verifications. These tests were not met.”

Despite the planned handover of Verify, the NAO pointed out there is still a question mark over whether government departments will continue to use the system thereafter.

“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,” said the report.

On the plus side, the NAO acknowledged Verify as “an example of how government has tried to tackle a unique and unusual problem”.

“In an attempt to strengthen online identity while maintaining a high degree of privacy, GDS has helped to define standards, build the Verify platform, and develop the market of private sector identity providers,” it said.

However, the watchdog concluded that Verify exhibited many of the problems that have led to previous government IT failures: “Unfortunately, Verify is also an example of many of the failings in major programmes that we often see, including optimism bias and failure to set clear objectives. Even in the context of GDS’s redefined objectives for the programme, it is difficult to conclude that successive decisions to continue with Verify have been sufficiently justified.”

A spokesperson for GDS said: “Verify is saving taxpayers’ money and is a world-leading project in its field. The NAO report reflects that it has been a challenging project – but challenges like these are to be expected when the government is working at the forefront of new technology.

“We now believe that Verify is at a point where it can be taken forward by the private sector to provide a single source for people to confirm their identities online. This will see the government’s investment in the project cut back as the private sector takes it forward. This ensures Verify will continue to enable people to access services easily online, while protecting them from organised crime, identity fraud, and other malicious online activity.” 

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Ironic that for all the time spent working with government departments to assess their work through the Spend Controls process, GDS never got to eat their own dog food and Verify was never subject to that scrutiny.   As originally envisioned, it would never have been given an assurance green light and various ministers might have been better informed had that analysis been available to them.  The passage of Verify through the Service Standard assessment process was also tainted and there are several people who should be reflecting on their role in that.
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