The missed opportunity in the Smart Data Strategy

The UK Government's Smart Data Strategy to 2035 gets a lot right - but it misses a significant opportunity by overlooking research and public good as core use cases for smart data.

At the end of March, the Government published its Smart Data Strategy to 2035, setting out how it plans to develop a smart data economy in the UK and the broader economic benefits this could bring – backed by a £36 million investment from the government.

The strategy assesses the impact that smart data could have across a range of sectors, outlining its potential to unlock over £71.2 billion of social value through removing friction, providing more choice and opening up new opportunities for commercial innovation.

The priorities for this investment are Industrial Strategy sectors such as financial services, clean energy, property transactions, transport, and telecoms – with the goal to embed it where it can have the greatest economic impact.

But there is something missing; the broader benefits delivered by non-commercial smart data schemes. The strategy does nod to continued collaboration with organisations like UKRI’s Smart Data Research UK programme, but does not discuss the social good impact of research and policy which uses smart data.

This is a missed opportunity to quantify the full spectrum of the smart data opportunity.

Smart data for research

The Data (Use and Access) Act 2025 provides government with powers to implement smart data schemes and require firms to participate in them, reducing friction for authorised data sharing between trusted parties to power economic growth. But this data holds even more value when responsibly shared for research and public good too.

Policy makers’ decisions have direct impacts on people’s lives and cutting edge, data-informed research is an essential component of the policy making process. Smart data research can provide a fresh lens on key policy issues, given that it is the result of studying large-scale, digitally derived data which reflects how people actually behave. And because it is available in near-real time, policy makers can be more responsive to changes in the economy, environment or healthcare.

As Smart Data Research UK’s Financial Data Service, we are already working with our data partners to open up financial data for research. De-identified at source and stored in our Trusted Research Environment, this data holds a wealth of previously inaccessible economic insight; real people, real financial behaviours, real time.

Researchers are using it to understand:

• the intersection between poverty, housing energy efficiency and children’s health
• the impact of housing and energy shocks on financial resilience
• fuel poverty and income volatility
• how SMEs respond to economic shocks and policy changes.

And whilst there is some recognition of this as a parallel use case in the strategy, the exclusion of smart data for research as a core use case overlooks its benefits.

Smart data for policy

A good example of how smart data is being used in the policy space is a feasibility study currently being conducted by The Scottish Government.

The Scottish Government is exploring whether a different approach to labour market statistics, using smart data, could help to plug gaps created by declining response rates to the ONS Labour Force Survey. By using de-identified banking data, alongside other alternative data sources, to understand employment and income patterns in real time, the project aims to support policy makers with access to current and more comprehensive data when making critical policy decisions on economic and monetary policy, welfare support, skills development and regional investment.

Another example is a recently launched project with The Low Pay Commission (LPC) to study the effects of the National Living Wage on employment (NLW). The LPC are similarly challenged by data quality issues with the ONS Labour Force Survey, amongst others, and are exploring alternative data sources such as smart data to assess the impact of increases to NLW since 2019.

Policy directs government spending and shapes how we engage with the economy. The benefits of smart data to the public purse go beyond economic growth. Better policy could lead to better spending decisions through more rapid understanding what works and what doesn’t and closer targeting of government spend.

What do the public think?

There is public appetite for data to be used for public good, rather than solely commercial purposes. Our public engagement panel, Data Voices, has been established to regularly engage with the public on developments in smart data research. Our panellists are generally supportive of using financial data for research which has a clear public benefit, provided that the research meets ethical and privacy thresholds.

Read our public engagement report here.

The full picture of smart data

The UK Government's Smart Data Strategy sets an ambitious course, and the economic case it makes is compelling. But economic value and social value are not mutually exclusive; in fact, the strongest argument for smart data is that it delivers both.

The research already underway through Smart Data Research UK, and use cases like the Scottish Government's labour market feasibility study and Low Pay Commission's research, demonstrate that when smart data is responsibly shared for research and public good, it generates insight that no commercial application could - or would - produce. And crucially, the public supports this. People are increasingly aware of the value their data holds and they want it to work for society, not just for business.