Politics Home Article | Confusion In Whitehall Over Burnham Plan To Scrap Digital ID

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Before entering office on Monday, Burnham announced that he would abandon the Keir Starmer policy and redirect the resources to tackling cost-of-living pressures.

Speaking in his first Cabinet as PM on Tuesday, he said the decision was about “reprioritisation”, after announcing that money saved by ditching the scheme would be put towards cutting VAT from household energy bills.

On Tuesday morning, the Permanent Secretary in the Cabinet Office, Cat Little, apologised to department officials who had been working on digital ID for not being told about the decision before it was announced, PoliticsHome understands. 

Little told officials that what remains of the scheme will move to an expanded Department for Digital, Culture, Media and Sport, headed by Lisa Nandy.

This detail has led to questions over what part of the policy is actually being discarded.

The new Burnham administration has said that it remains committed to the existing Blueprint for Modern Digital Government, including the GOV.UK app, GOV.UK OneLogin and the Government Wallet, with a digital driving licence expected shortly. Digital inclusion work will continue, building on the 2025 Digital Inclusion Action Plan.

Insiders have told PoliticsHome that the government has already spent around £15m on developing the policy since it was announced by Starmer in September last year. 

The Institute for Government’s Heloise Dunlop said the money that has already been spent on the policy “is unlikely to be insignificant, given the size of the team and extensive consultation process”.

She told PoliticsHome it was “not clear how the government was going to fund digital ID: the policy was not yet fully finalised, there was no clear idea what online services would be included in the join-up, and the OBR had said no specific funding had been allocated for digital ID in the spending review”.

On Tuesday morning, Darren Jones, a Starmer ally who Burnham sacked from Cabinet on Monday, and who led on digital ID while in government, posted on X that the policy of scrapping digital ID to fund energy bill cuts was “unfunded” as the latter is based on unspecified departmental cuts.

“The government will have to set out how it will pay for its new policies at the budget,” he wrote.

Helen Miller, director of the Institute for Fiscal Studies, added: “At last year’s Budget, the OBR estimated that the [digital ID] programme could cost a cumulative £1.8bn between 2026–27 and 2028–29, and the Treasury estimates that today’s VAT cut will cost £850m this year.”

Miller said that the numbers mean that the government “will therefore still need to make around £850m of as yet unspecified cuts from other departmental spending to pay for this”. 

If the tax cut remains permanent, Miller said, “the government would have a range of options for how to pay for it in future years”.

“This could include departmental spending cuts, but it is unlikely these can be justified solely by scrapping digital ID. Much of the cost of this scheme was likely to be upfront investment to set it up over the next few years, such that scrapping it cannot fund a permanent tax cut.”

The Starmer government hoped that introducing digital ID would help modernise the state and make public services more efficient.

However, it polled negatively once announced, with Labour MPs complaining that the early communications strategy focused too much on how it could help combat illegal migration, with not enough messaging about how it could improve the everyday lives of voters.

In January, PoliticsHome revealed that the Starmer administration was abandoning plans to make the scheme mandatory amid warnings, including from many Labour MPs, that going ahead with the compulsory element would be strongly opposed by the public.