Dr Becky Faith, Professor Jacqueline O'Reilly and Dr Rachel Verdin, Digital Futures at Work Research Centre—written evidence (DCL0061)


House of Lords Communications and Digital Select Committee inquiry Digital exclusion and the cost of living



About the Digital Futures at Work Research Centre

The Digital Futures at Work Research Centre (Digit) is funded by the Economic and Social Research Council to investigate how digital technologies are changing work and the implications for employers, workers, job seekers and governments.  It is co-led by the University of Sussex and the University of Leeds Business Schools.  A key part of our research programme focuses on digital exclusion, its causes, and consequences for employment-seeking, including in relation to the digitalisation of public services. 


Dr Becky Faith is a Research Fellow, Leader of the Digital and Technology cluster at the Institute of Development Studies and Co-Lead of Research Theme 4, Digit.


Professor Jacqueline O'Reilly is Co-Director of Digit and Professor of Comparative Human Resource Management, University of Sussex Business School.


Dr Rachel Verdin is a Research Fellow, University of Sussex Business School.



1.              What are the main causes of digital exclusion in the UK? What is the economic and social impact?


1.1              The causes and impacts of digital exclusion are multifaceted and now exacerbated by cost-of-living increases (Digit Debates, 2021). The costs of connectivity are becoming a financial burden for many people in society – not just the worst off but for those who are ‘getting by’. Research on digital divisions suggests that the barriers to digital inclusion include people not having:


          access to reliable internet connections;

          adequate devices for all household members;

          trust in the safety and security of being online;

          the skills needed to navigate these platforms;

          or the motivation to understand why they need these.


1.2              However, at the individual level digital exclusion is often simplistically understood as a problem of being 'offline' that is fixed once people are 'online'. Our recent data commentary (Hernandez and Faith, 2022) on digital exclusion statistics in the UK shows that the number of people who do not have the skills or access to use digital services, such as online GP appointments, is underestimated because these statistics do not take account of the many different barriers people face (Hernandez & Faith, 2022) as well as the extent of their online activity.  The Office for National Statistics (ONS), for example, counts individuals as ‘internet users’ as long as they have used the internet once in the last three months. Once people are counted as ‘internet users’ they are no longer considered to be digitally excluded in many surveys. So factors that restrict their use are seldom explored. These factors include: only having access through public libraries, public WiFi, or at the homes of family or friends; needing to borrow devices to go online; needing help to carry out some digital tasks; slow internet speeds; and using old, broken or cheap, subpar devices (Faith, Hernandez and Beecher, 2022).  At the same time, as every aspect of life – from job seeking to health care –is moving online, digital connectivity is a daily necessity, like a utility, and not a luxury (Good Things Foundation, 2020).


1.3              The most recent data on affordability of communications services from OFCOM showed that one in three (32%) households surveyed had difficulty affording a communication service. This figure is likely to increase given recent announcements of price rises of up to 14% for mobile and broadband contracts in April. Our recent research highlights the vicious circle of digital poverty. It is not only that the cost of access and devices can put economic pressure on people, but that being digitally excluded can make life more expensive. For example, people unable to access price transparency information on comparison sites, and other economic benefits miss out.


1.4              At the national or societal level, our research has compared the UK's digital transformation and its consequences for digital exclusion with six other European countries Verdin, O'Reilly and McDonnell, 2023).  The UK's emerging digital welfare ecosystem for delivering public services, involves government (locally and nationally), businesses and third sector organisations. However, this is developing without any cohesive coordination and lacks strategic oversight (NAO, 2021). This is leading to unintended consequences that may exacerbate digital exclusion. This includes missing opportunities to replicate and scale up good practice that fosters inclusion, as well as insufficient for training in basic and lifelong digital skills.


1.5              Our interviews with third sector organisations, telecoms firms and citizens experiencing poverty also reveal that accessing reduced cost tariffs is beset with problems. The costs remain prohibitive. There is low awareness amongst target communities: only 3% of eligible households have signed up and almost 70% are not aware they exist. Eligibility criteria are too narrow and the time taken to confirm eligibility is too long.  The amount of data offered may also be insufficient for all members of a household, i.e. those with more than one user.



2.              How has the rising cost of living affected digital exclusion?

              a)              To what extent does digital exclusion exacerbate cost of living pressures?

              b)              What are the long-term implications of this relationship?


2.1              Digital exclusion is exacerbated by cost-of-living pressures because of a well established ‘Poverty Premium’ whereby the ‘Poor pay more’ (CEBR, 2018). For example, those with no or limited connectivity often cannot avail of information on price comparison sites. We also know that online shopping and online bill payment accelerated during the pandemic:  56% of consumers reported doing this for the first time (Lloyds Banking Group, 2021). However, pre-pandemic figures show that people with a lack of access or knowledge of price comparison sites lost out on £444 per year (Centre for Economics and Business Research, 2018).  Other economic benefits may require apps to be downloaded to a smartphone, which excludes those with no or only limited connectivity (Faith, Hernandez and Beecher, 2022). The Lloyds Consumer Digital Index shows a pattern of declining online capability alongside declining level of income (Lloyds, 2022). Those online reap a digital dividend; those with poor incomes and limited access are penalised.


2.2              The long-term implications of the lack of or limited access to digital resources will widen the gap between high digital density households and those with weaker connections. Those who either cannot afford, or do not know how, to access these digital resources will lose out. The gap between households with multiple devices and faster broadband speeds and those with low digital density will increase. Digital poverty and poverty are interlinked, reinforcing these divisions (Faith, Hernandez and Beecher, 2022).


2.3              Digital exclusion has important links to employment. We know that firms with greater digital adoption have higher expectations of employment growth (Arntz et al., 2018); and we know that it is more common to find a job using digital platforms. But using these well is a challenge, in particular for those with limited digital literacy. The long term implications will increase digital divisions between the well-connected and those hanging on.



3.              What are the obstacles to greater digital inclusion? Where is policy intervention likely to have the greatest impact over the next 12 months and 5 years?

              a)              To what extent would these changes help unlock economic growth?


3.1              A key obstacle is effective leadership and coordination of the different actors and systems.  Our research is developing a model of digital ecosystems involving a triad of actors: Government (national, local and devolved), business (including telecom providers) and the third sector (including charities tackling digital exclusion).  In the UK, this ecosystem is fragmented and poorly coordinated according to government auditors (NAO, 2021).  The OECD (2020) and Neufeind et al. (2018) recognise the importance of strategic leadership, design and implementation when driving digital transformation.


3.2              The government needs to foster collaboration and cooperation to build these partnerships and share good collective practices across the regions of the UK. The need to resource and drive technologically minded leadership is well understood (as described at the recent GOV ICT conference), yet progress remains limited (NAO, 2021, and forthcoming). Without these capabilities, existing inefficiencies, such as technical debt, poor data quality and usage, and the lack of a single digital ID system, risk multiplying existing digital inequalities.


3.3              In interviews with experts in government, business (telecoms firms) and third sector community organisations we identified several promising policy interventions:

       During the pandemic some government websites and services, for example NHS websites, and those for victims of crime, had their data charges removed or 'zero-rated'.  ‘Zero-rating’ means that accessing websites does not use up someone’s data allowance. Some mobile network operators also zero-rate some support websites, for example Imkaan, a website dedicated to addressing violence against Black and Minority Ethnic women and girls.  Some telecoms firms have offered zero-rated access to money support services during the cost of living crisis. However, many of these initiatives were removed post-pandemic. Other issues which may restrict their effectiveness include a lack of clarity about which websites were included in the scheme and embedded links to sites which were not zero-rated.


       Public wifi facilities for community use.  For example, Adur and Worthing Councils are currently rolling out Citizen WiFi, to bring a network of free public wifi spots to local towns.  Some third sector organisations have also piloted the provision of free wifi for people in vulnerable and sheltered accommodation. The current cost of living crisis has also underlined the need for places where people can charge their devices for free.


       The National Data and Device banks, established during the pandemic, have provided essential support for many. The government should consider how best to support and extend this work.


       Encourage wider adoption of successful Local Government policies. For example, Mid Sussex have used the social value procurement requirements to encourage private sector firms to support initiatives targeting digital poverty and skills gaps.  In addition, they have implemented a 'Dig Once’ policy working with private developers to ensure that new developments include fibre optic broadband, and encouraging diversity in the market. This has brought cost-savings for residents and boosted the local economy (Digit Debates, 2022).


       Ofcom has highlighted the need for telecoms firms to promote social tariffs, to encourage awareness and take up amongst target communities.  Greater regulatory power is needed as currently telecoms firms are not required to offer a social tariff at all. This is particularly relevant given the lack of choice of broadband provider in some areas.


       The Government should convene a taskforce drawing on the huge expertise of the voluntary sector and business communities to amplify positive local activity, support areas without effective digital inclusion infrastructure and improve the fragmentation of the UK digital ecosystem.


4.              How effective are Government initiatives at addressing digital exclusion? What further action is needed, and what should be done to provide offline access to services?


4.1              While the digital divide may have narrowed, experts suggest it is becoming deeper (Lloyds, 2022). This quote from a Local Authority worker reflects a commonly held assumption that digital exclusion is a problem that is ‘fixed’: "I think we've lived with the assumption that there are very few digitally excluded, and so maybe the attention is not being given to that... I just hope that other Boroughs have also identified it and put something in place".  Complacency risks deepening inequalities for those who experience any form of digital exclusion. These struggles were reflected in our interviews with organisations supporting jobseekers during the pandemic which highlight a lack of funding: "My experience has been that even with the crisis funders don’t want to fund technology or hardware. … And when I look at some of the funding applications even now it’s still quite difficult to access that funding."


4.2              The Covid-19 pandemic acted as a litmus test for digital government services, driving greater online service provision and automation. However, examples of good practice that would be of use during the cost-of-living crisis were often localised or temporary (for example the zero-rating of some websites).  In addition, our research has shown the motivation, ability, and resource to drive change varies between government departments and local authorities. Correspondingly, there is regional variability in the support mechanisms available as the extent of digital adoption and the maturity of the digital welfare ecosystem differs.


4.3              The devolved administrations in Wales and Scotland have, arguably, made better progress than England in developing a national approach to tackling digital exclusion. The Scottish Government has committed over £48 million to The Connecting Scotland programme which was set up in May 2020 in response to the Covid-19 pandemic. It aims to provide a national, human-centred, consistent and comprehensive approach to reducing the rates of digital exclusion and digital marginalisation due to low income (Connecting Scotland, 2022). In Wales, the Digital Inclusion Alliance has called for internet access needs to be recognised as an essential utility and to see sectors working together to make this a reality (Digital Inclusion Alliance for Wales, 2021).


4.4              The UK Government's aim to provide 'digital by default' public services also risks deepening inequalities for those who experience any form of digital exclusion. For example, digital by default delivery of healthcare has been rapidly accelerated by the pandemic, but many of the people who could most benefit from digital services are the least likely to be online (Digital Inclusion for Health and Social Care, 2022).



5.              How well are existing industry initiatives (for example cheaper internet tariffs) addressing digital exclusion? How could they be enhanced?


5.1              Currently six broadband providers - BT, Community Fibre, G.Network, Hyperoptic, KCOM and Virgin Media O2 - offer “social tariffs”. These are cheaper deals costing between £10 and £20 month, compared to a standard commercial broadband package of around £27 a month. However, our research into digital poverty in low-income households found that only 1% of lower income householders were currently using a “social tariff” to pay for internet (Faith, Hernandez and Beecher, 2022). Four in five lower income people said they were not aware of any cheap deals available to people on benefits or low incomes (80%). This finding is consistent with recent research from Ofcom which found that only an estimated 1.2% of eligible households have taken up a social tariff (Ofcom, 2022).  It should also be noted that social tariffs are often not competitive when compared to the cheapest offers available to all consumers. Ofcom has highlighted the need for telecoms firms to promote social tariffs, to encourage awareness and take up amongst target communities. 


5.2              Telecoms operators have also signed up to measures to remove all data allowance caps on all current fixed broadband services. They offer new mobile and landline packages to ensure people are connected and that the most vulnerable continue to be supported by working with customers who find it difficult to pay their bill because of Covid-19. However, this policy relies on people having fixed broadband services and does not help those unable to afford connection fees, or, living in accommodation where arranging this is difficult.


5.3              Finally, in September 2021 BT announced a "connect the unconnected" offer. The offer is open to households that receive universal credit with no other earnings, and which have not been connected to the Openreach network for the past 90 days. BT estimated about one million people could save up to £92 per year, depending on how internet firms pass on the saving. However, smaller internet service providers do not have systems in place to identify customers on Universal Credit. Customers are also unlikely to be aware of the scheme (as with social tariffs). The process of proving eligibility places additional burdens on those under financial pressure.



6.              How effective is civil society at supporting digital inclusion? How could this work be enhanced, and what is the appropriate balance between civil society and Government intervention?


6.1              There has been a wealth of work, carried out by UK Digital Exclusion organisations over the last twenty years, exploring strategies and approaches to addressing this issue. Notably, research by Citizens Online/Centre for Ageing Better (Centre for Ageing Better, 2021) and Good Things Foundation (Good Things Foundation, 2022) has provided valuable insight, particularly on the need for ‘place based’ work. Yet ‘individualised’ digital inclusion policies, which simply provide access to equipment rather than a package including support and data, were a subject of criticism in our research. One employment support worker said: "I think people need devices and training, I think there has been a big push, which is good to get devices, you know, we know that devices, is the first thing. But from what I know they haven't come with any expectation of training, it has just been about providing people with the device not providing any support."


6.2              Previous research by Citizens Online (Centre for Ageing Better, 2021) surveyed organisation providing digital inclusion support to 50–70-year-olds during the pandemic.  Forty seven per cent were giving/loaning devices with fewer were helping with data (32%). This support had increased since the pandemic.


6.3              It is often said that small, local organisations are best placed to reach digitally excluded populations – through existing relationships of trust. However, these organisations are often financially stretched. Adapting budgets to fund devices and data isn’t sufficient alone: organisations need to be able to provide recipients with wrap-around digital skills support. This approach relies on the existence of appropriate and sufficiently funded organisations in all communities. While many organisations were newly providing devices, the research found over a quarter of organisations said not only were they not providing devices, but they did not know of anywhere to refer people for devices (27%). The most significant issues were around data costs: 38% unable to provide or refer to free WiFi or broadband, and 42% were unable to provide or refer to sources of funding for either data or devices.


6.4              These finding demonstrate the importance of mapping our digital welfare ecosystem of places, providers and professionals. Examination of how and where partnerships have developed will help policy makers upscale effective interventions, but also target key areas of risk.



7.              What lessons can the UK learn from abroad?


7.1              The overall challenges of successfully navigating the digital transformation are closely interlinked with tackling digital exclusion. In terms of overall digital performance, the UK performs well, though comparatively this is faltering (Neufeind et al. 2018). Our research shows significant variation in the extent of digital adoption varies both within and between countries. In terms of public service adoption Estonia, Norway and Spain are frontrunners in Europe. The evolution and management of digital ecosystems for government services requires a better coordination of public sector, business and community organisations. Evidence from Norway indicates that “municipalities, county authorities and central government agencies must be able to collaborate in order to develop user-centric, seamless and efficient digital services”.  Some examples of good practice to build an effective and common ecosystem are based on:


          successful interoperability between government services

          common data sources, such as master data and basic data registers

          common architectures, such as reference information, standards, guides and frameworks

          standard access for multiple users with effective digital ID systems

          standard business models and contracts

          harmonised financing and payment models

          establishing public Wi-Fi;

          trust and motivation as key determining factors shaping the effectiveness of transformations;

          digitally aware leadership.



March 2023



Arntz, Melanie; Gregory, Terry; Zierahn, Ulrich; Lehmer, Florian; Matthes, Britta (2018) 'Digitalisierung und die Zukunft der Arbeit: Makroökonomische Auswirkungen auf Beschäftigung, Arbeitslosigkeit und Löhne von morgen', ZEW-Gutachten und Forschungsberichte


Digit Debates (2021), 'Digital Levelling up in Sussex'


Dr Becky Faith, Kevin Hernandez and James Beecher (2022) 'Digital Poverty in the UK', British Academy Report


Becky Faith, Kevin Hernandez and James Beecher (2022) 'Digital Poverty in the UK', IDS Policy Briefing.


Central Data and Digital Office (2022) 'Transforming for a digital future: 2022 to 2025 roadmap for digital and data'


Centre for Ageing Better, C. O. (2021), 'COVID-19 and the digital divide'


Centre for Economics and Business Research (2018) 'The economic impact of Digital Inclusion in the UK A report for Good Things Foundation'

              Connecting Scotland: A year in view (2022)


Digital Inclusion Alliance for Wales. (2021 'From Inclusion to Resilience: An agenda for digital inclusion'

              Digital Inclusion for Health and Social Care, 2022


Kevin Hernandez and Becky Faith (2022) 'Measuring Digital Exclusion: Why what is counted is also what counts', Digit Data Commentary.


Good Things Foundation (2022). 'Place-based collaboration for digital inclusion'

              Lloyds Consumer Digital Index (2022)


OECD (2020) 'Digital Government Index: 2019 results'


Ofcom (2022) 'Affordability of Communications Services'


Jacqueline O'Reilly and Rachel Verdin (2021) 'Comparing the digital transformation of welfare delivery in Europe', Euroship Working Paper No. 8


National Audit Office (2021) 'The challenged in implementing digital change'


National Audit Office (2023) 'Digital transformation in government: addressing the barriers to efficiency'


Neufeind, M., O’Reilly, J., & Ranft, F. (2018). 'Work in the digital age : challenges of the fourth industrial revolution', Rowman & Littlefield International.


Norwegian Ministry of Local Government and Modernisation (2019) ‘One digital public sector – digital strategy for the public sector 2019–2025


Dr Emma Stone 'Towards solving data poverty', Good Things Foundation


Rachel Verdin, Jacqueline O`Reilly and Ann McDonnell (2023) 'Digital Welfare Ecosystems in Europe: Social protection systems preventing social exclusion and enhancing opportunities to participate in the digital economy', Euroship Working Paper No. 23


Rachel Verdin (2023) 'Mapping our digital ecosystem can help policymakers drive digital transformation', Digit Blog