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Report of the Digital Government Review


2. Benefits to individuals

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Individuals and society benefit in a number of ways from gaining digital skills: increased self-esteem; increased propensity to volunteer; access to online services; increased employment prospects [185]. The latter is particularly helpful when looking to justify funding.

The linkage between online skills and employment prospects is well known. As the previously digitally excluded take up a job they stop receiving benefits and start contributing tax revenues. Others will become more productive and move to higher paid jobs as their skills increase.

The Tinder report estimates that their recommendations would equip 6.2 million currently digitally excluded adults with basic online skills by 2020, of which 2 million are of working age. This is 5% of the total working age population [186].

We assume that the digitally excluded have a similar unemployment rate as the general population, 6.5%. We can estimate that 5% move into a job as a result of gaining online skills and that this job pays the average wage. This allows us to estimate a combination of benefits savings and increased tax income of £120m per annum. This is calculated as follows:

Reduced benefit payments
Total benefit bill (£Millions) 33600
%age of working age population digitally excluded 5%
x %age improvement in employment 5% X
Total savings (£Millions) 84

 

Increased tax income    
Working age excluded 2000000
Unemployment rate 6.5%
%age improvement in employment 5%
Number of excluded employed 6500 X
Tax and NI on average wage (£) 5525 X
Total revenue increase (£Millions) 36

We have not attempted to determine the quantitative impact of the increase in productivity and salaries of the already employed.

Although the sums are significant it will be difficult to identify these benefits as being directly caused by digital inclusion. This will make it difficult to track the benefits being created by the inclusion funding rather than by other benefits. It may be appropriate to implement such evaluation methods in the future but we did not take this analysis further at this time.

[185] An increasing number of jobs are only advertised online.
[186] These figures will need to be updated at the time that any future programme is due to start

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