The government has met with industry representatives to discuss the future of the digital identity market following backlash from the sector after concerns that the wallet would push private digital ID companies out.
Government officials, including secretary of state for science, innovation and technology Peter Kyle, the Government Digital Service (GDS) chief product officer Christine Bellamy, and director of digital identity Natalie Jones met with industry to share further details on Gov.uk Wallet.
The event comes following criticism from industry, which felt blindsided by government when it launched the wallet without consulting the sector, leading to shock and uncertainty.
When the government originally launched the wallet in January 2025, Kyle announced it would include a digital version of driving licences and Veteran Cards, which will be piloted later this year. However, by the end of 2027, it will include every government-issued credential, underpinned by the Gov.uk One Login digital identity platform.
According to a LinkedIn post by the Age Verification Providers Association (AVPA), during the meeting Kyle apologised to industry for the “unintended impact” the announcement of the wallet and the digital driving licence (DDL) plans had on industry.
“He was unapologetic that government would issue credentials such as a DDL, which he argues (reasonably) the public expects. He did say government has no interest in how the private sector consumes and integrates with those credentials,” the LinkedIn post said.
However, Computer Weekly understands that during the meeting, Kyle said that while the government might have created challenges by disrupting industry with this, he is also dealing with disruption presented by the private sector in the way he has to do his job.
Computer Weekly understands he also argued he had done several social media posts celebrating the work done by private sector digital ID providers, and that he was open-minded about the relationship between government and industry.
In a blog post related to the meeting, GDS director of digital identity Natalie Jones said that the aim of the event was to “give private sector identity providers an update on the government’s proposals and help them prepare for the critical role we want them to play in this work”.
All suppliers of digital identity systems in the UK are already expected to comply with the Digital Identity and Attributes Trust Framework (DIATF) if their software is to be used for any public services.
Private sector role
The government sees private sector providers as taking on two clear roles as part of the digital identity programme. The first is as an orchestration service provider (OSP), providing the technical infrastructure for data flow between the information in the Gov.uk Wallet and the retailer performing an eligibility check, such as age restrictions on buying alcohol.
The second is as an identity service provider (IDP) or holder service provider (IDP), which takes information directly from the digital credentials in the wallet, should the user choose to share them, much like identity services can take information from physical documents, according to the blog post.
“These private sector services can then add value, for instance attaching other information. They might also create a reusable ‘derived credential’, which is a new credential that would allow users to prove things about themselves, without going back to the Gov.uk Wallet,” Jones said in the blog post.
Richard Oliphant, an independent legal consultant in the digital ID sector, who also attended the meeting, said in a LinkedIn post that the use of the wallet in “private sector use cases is complex”, adding: “Importantly, although not addressed in any documentation, DSIT said that the government – and not the IDP or HSP – bears liability for all government-issued digital credentials passed to relying parties.
“There is still some blurring of the lines in private sector use cases. The OSP model cuts out IDPs and HSPs altogether and enables a user to share wallet credentials directly with relying parties.”
Oliphant added that he expects tech giants such as Google and Apple to get DIATF certified, as they now have a “clear pathway to access mobile driver licenses, passports and other government-issued credentials, and create derived credentials in their wallets”.
The original Gov.uk Wallet announcement created chaos in the digital ID sector, including leading to industry calling on government to amend the Data (Use and Access) Bill, which includes legislation to help the widespread use of digital identity tools supported by government data.
In an open letter to the tech secretary in April 2025, a group representing suppliers of online safety and age verification technology said it had sent “shockwaves through the sector”, and wanted to ensure the wallet and Gov.uk One Login to be statutorily limited to authentication for public services to avoid competing with private sector alternatives.
Digital ID cards
There are also concerns that the move is a way to bring back the idea of national ID cards, albeit digitally.
Giving evidence to the Science, Innovation and Technology Committee on 13 May, CitizenCard CEO Andrew Chevis, commenting on the government’s digital age verification proposals, said: “It could be the beginning of a state digital identity card. I understand that people don’t want to call it that, but I think in practice, that’s what it is and what it is intended to be.”
The idea of a national ID card has been a long-standing debate ever since the then prime minister Tony Blair began a campaign for its introduction, which was firmly shot down by privacy campaigners.
However, a group of Labour MPs have blown fresh air into the debate, calling on the government to launch a comprehensive digital ID programme, similar to Blair’s original plan. In an open letter, which was shared with several government departments on April 2025, the MPs said a digital identity for citizens would potentially “transform public services”.
The latest figures from a YouGov poll, with around 1,700 people surveyed in December 2024, shows that 34% of the public “tend to support” the introduction of national identity cards, while 25% “strongly” supported this.
Filtered by age, 42% of those over the age of 65 strongly supported the idea, while only 12% of those between 18-24 strongly supported it.
A Tony Blair Institute report published in 2023 called for a central, digital ID system as the cornerstone of the public sector.