Blockchain could restore public trust in government spending

Despite the initial hype of blockchain, and the transparency and security it purportedly provided, the technology is still far from mainstream. With public finances coming under major scrutiny, Rajesh Sinha, blockchain practice lead at esynergy, argues that the technology’s time could finally have come.

Ahead of Rachel Reeves’ first budget at the end of October, and amidst claims that the Labour Government has inherited a £22bn black hole in public finances, government spending and fiscal responsibility are under increasing scrutiny. Indeed, financial accountability will be central to determining the success of Starmer’s plan to restore public “trust” and “hope” in politics. If the Labour Government is serious about these goals, they must consider one, often overlooked, solution: blockchain technology.

Perceptions of blockchain have historically suffered due to its association with cryptocurrencies and their perceived volatility and complexity. However, its diverse use-case application, ability to democratise data access and radically improve transparency (blockchain is, after all, an advanced and immutable database mechanism) are increasingly being recognised by governments across the world. In fact, the technology is already being used at a national government level by the likes of Singapore, Australia and the UAE.

So, how could the Labour Government use blockchain to further its “trust” agenda?

Introducing pilot programmes

While perceptions of blockchain technology are improving, implementing preliminary projects would give the Government an opportunity to not only test, but prove its feasibility and benefits before committing to full-scale rollouts. This would demonstrate its value and build public trust in the technology.

One such pilot programme, for example, could be the implementation of a ‘Public Service Dashboard’ for central and local governments and departments. This platform could comprehensively show costs and their associated impact, providing a greater level of visibility into public projects and their outcomes. Companies House has already been earmarked for transformation due to issues with false records and unknown company ownership; transferring these records to a blockchain-based system could ensure greater integrity and accuracy.

Blockchain could also be used to improve supply chain transparency more broadly. For instance, the technology has the potential to prevent and resolve issues like cost overruns, mismanagement of PPE procurement and burgeoning budgets. This is because the systems for procurement, awarding contracts and ensuring that payments are correct, would all be easily auditable. In turn, this would reduce waste, improve supply chain efficiency and provide real-time visibility across government - and the public.

NHS cost savings

Spending decisions will be central to the success of Labour’s fifth and final mission to “build an NHS fit for the future.” According to a recent study by Nuffield Health, public satisfaction in the health service is currently the lowest it has ever been. The transformation of the NHS will therefore be crucial to Labour’s success.

The promise of blockchain in this regard cannot be overstated. For example, in 2022-2023, the NHS spent £3.2 billion on administration costs alone. Blockchain technology could dramatically reduce this by creating a single, secure patient record system. This would underpin health records being shared securely and seamlessly, both within NHS Trusts themselves, and between the NHS and other healthcare providers.  What’s more, the audit trail built into blockchain would allow patients greater access to and control of their own health data. Patients could even potentially earn money from their information by giving permission for it to be shared, anonymously, with research companies - should they choose.

The key to the rose garden

In a recent article, Keir Starmer invited the “people who serve our communities and our country” into the rose garden at 10 Downing Street. His aim? To provide a symbol of his Government’s openness and to signify the start of rebuilding public trust. Blockchain technology could be central to this aim, through its capacity to enable transparency and accountability in governance.  

From taxes to clinical trials, fiscal decisions across government functions would be entirely auditable via blockchain. By definition, it is an open-source technology, and one in which no single individual has total control. Its democratic impact would be transformative and blockchain could play a pivotal role in the Labour Government’s strategy.  By harnessing blockchain, the Labour Government could transform transparency from a promise into reality - and secure public trust for the long term.