This consultation and the further work the Bank will now do will be the foundation for what would be a profound decision for the country on the way we use money. That’s why we will continue to issue it for as long as people want to keep using it. A digital pound would be denominated in sterling and its value would be stable, just like banknotes. £10 in digital pounds would always have the same value as a £10 banknote.
We’ll reform controls, in favour of more strategic, data-driven decision-making using performance metrics; and close the Top 75 programme in favour of a focus on catalysing deeper service transformation. The public sector’s digital and data capability is severely lacking, and as a result depends heavily on third parties. This is costly, with the average contractor costing three times as much as a public servant. The digital centre will work with the Government People Group to elevate digital leadership, invest in the profession and the competition for talent, and raise the digital skills baseline for all public servants. The latest tools and technology, including but not limited to AI, present major savings opportunities.
It is essential that the law keeps pace with evolving technologies and this legislation will mean that the sector can maintain its position as a global leader in cryptoassets and bring clarity to complex property cases. During this consultation, HM Treasury and the Bank of England engaged extensively with stakeholders across the UK to seek views on the proposed model of the digital pound set out. Responses to this consultation were invited from all interested members of the public, experts, and organisations. During times of consistent low economic growth, sometimes moving the Bank of England’s base rate is not enough to elicit a positive response in the economy.
The digital centre will strengthen responsible AI use and skills across government. The work of the AI Incubator (i.AI) will focus on building and testing AI tools to boost public sector productivity, targeting the £45 billion per year potential improvements identified in the State of Digital Government report. To radically improve value for money we need new approaches to transforming services, both nationally, and local areas as we invest to support place-based growth. We need to holistically improve policies, business processes, data, and systems rather than on a piecemeal basis. We’ve implemented other world-class digital public infrastructure such as GOV.UK Notify, Pay, and One Login.
If the results of this ‘development’ phase conclude that the case for CBDC is made, and that it is operationally and technologically robust, then the earliest date for launch of a UK CBDC would be in the second half of the decade. This means that it will have intrinsic value and not be volatile, unlike unbacked cryptoassets as there would be a central authority to back it. We’re already seeing firms seek advice in moving certain operations out of jurisdictions where they’re restricted, focusing on jurisdictions where growth is more likely. Many other countries are also moving towards more robust oversight of the crypto industry. The FCA’s approach to crypto regulation has been shaped by a series of stakeholder roundtables, of which our market leading team were part. “gov.uk wallet will mean that every letter or identity document you receive from the government could be issued to you virtually.”
We’ll align this with the Spending Review to secure funding for priorities and be transparent in how we communicate progress in the years ahead, and how we will support the five national missions. Camden Council have led the way in working with local citizens and the Alan Turing Institute to develop a data charter, building trust in how they use data about local residents. This has enabled them to use data with confidence to improve citizen experiences of council services, while maintaining public confidence in a borough with huge disparities in wealth and opportunity.
China, for example, is a front-runner in this global race, and is in the process of testing a digital yuan in major cities including Beijing, Shanghai and Shenzhen. The Government and the Bank of England have not yet made a decision on whether to introduce a CBDC in the UK, and will engage widely with stakeholders on the benefits, risks and practicalities of doing so. People use their debit cards or phones, or even watches to fulfil the same function. Both institutions want to ensure the public has access to safe money that is easy to use in the digital age.
This is an ambitious and far-reaching vision, one that will require a combined effort across the whole public sector over the next decade. This is not just a shift for digital teams, but for all public servants. As well as delivering great digital services, we need to shape policy and legislation to be digital-ready and reimagine front-line operations for the digital age. It asks a lot, from teams and organisations already working hard to deliver critical live services.
