Guidance

Call for proposals

Updated 30 December 2022

Foreword

The government is in the process of developing plans to unlock the digital economy, improve access to services, safeguard privacy and combat fraud through the expansion in the use of digital identities. In principle, this will allow people to establish their identity digitally, rather than relying on physical documents. A potential challenge to this development is the mandatory condition set out in paragraph 3 of the Schedule to the Licensing Act 2003 (Mandatory Licensing Conditions) Order 2010, which requires presentation of identification bearing a holographic mark or ultraviolet feature upon request when purchasing alcohol.

Therefore, in support of the government’s plans for broader use of digital technology in everyday life, the Home Office has worked with the Office for Product Safety and Standards (OPSS) to develop proposals for a Regulatory ‘Sandbox’ to allow the trial of technologies that can fulfil the requirement for age verification in the retail sale of alcohol. Current legal requirements will continue to apply during the Regulatory Sandbox.

The government is keen to encourage efforts to develop new technology to improve the experience of consumers and retailers when purchasing age restricted products. However, the need for strong national standards for age verification technology remains paramount in order to provide confidence to retailers and consumers alike that they are fit for purpose.

We hope that this proposal will allow time in a controlled environment to test technology and provide the evidence base required to make decisions about any potential legislative changes.

Introduction

It has become increasingly important in this digital age to be able to establish trust, particularly online. Having an agreed digital identity that you can use easily and universally will be the cornerstone of future economies.

Many parts of government have a role to play in digital identity and have been brought together in a cross-government Strategy Board. The Department for Digital, Culture, Media and Sports is focused on enabling and growing the use of digital identity in the wider economy, while government’s use of digital identity tools is a matter for the Cabinet Office.

The Home Office, in partnership with the OPSS, is keen to explore how technology can improve or enhance achieving the licensing objectives for the retail sale of alcohol. These are:

• The prevention of crime and disorder
• Public safety
• The prevention of public nuisance
• The protection of children from harm

In some cases, the Licensing Act 2003, regulations, guidance, conditions and practice may hinder, prohibit or otherwise stifle innovative approaches or technological advances. The purpose of a regulatory sandbox is to allow live, time-bound testing of innovations under controlled conditions, with the approval of government and regulators.

This is a call for proposals from innovators to establish such experiments and testing.

Sandboxes are wholly funded by private enterprises. There is no government funding or support available for this call for proposals. Thus, sandboxes are likely to attract proposals that are commercially attractive and could result in return on investment in testing or trialing the proposed product in a real world environment.

The approval of a test or trial does not imply that, even if successful, it will result in legislative change or improvement, although it will be taken into account alongside the views of all stakeholders in usual policy development process. Applicants for a sandbox should understand from the outset that the results of their test or trial may not result in any policy changes being implemented by government.

The Home office and OPSS regulatory sandbox is intended to provide an opportunity for industry and retail to test innovative approaches to age verification, such as digital ID and other products with age assurance attributes, in the specific context of the sale of alcohol under the Licensing Act 2003.

The government recently consulted on the first working version of the digital ID and attributes trust framework. As this framework develops, the trials under this sandbox are encouraged to contribute to those developments by testing the practical use in real world situations and understanding their implications.

What will a sandbox allow?

The sandbox offers innovators the opportunity to run a small scale trial with the support of the Home Office and OPSS, provided the applicant has the agreement of relevant local bodies to conduct the trial. A sandbox creates a conducive and contained space where experimentation with technological innovations can take place.

Applicants will need to describe how they will continue to comply with legal age verification requirements during the trial.

Each trial will run for a set period of time in an agreed number of locations.

An agreement between the Home Office, OPSS and the applicant will set out the terms of approval and conditions relating to entry into the sandbox.

A local written agreement will also be necessary between the Local Licensing Authority, Local Chief Officer of Police, other relevant responsible authorities (such as Trading Standards) and the relevant licensed premises involved in the trial. An informal agreement will suffice for the selection process, but a formal local written agreement will be necessary for the trial to start.

What a sandbox will not allow?

Proposals for a sandbox will not result in any changes to legal requirements or regulation for the purpose of the trial. To make changes to regulation, we follow established processes leading to industry-wide changes available to all parties. Sandbox trials can provide evidence to help us understand whether regulation should change permanently.

The mandatory licensing conditions will similarly continue to apply and a sandbox is not a means to evade or eliminate regulatory controls. A sandbox cannot be used for relaxation of conditions imposed on specific premises by a local licensing authority following a licence review hearing. It is important that local responsible bodies have confidence in the management of outlets that a proposed trial may take place in. For this reason, it may not be appropriate to conduct a trial at a location with a history of non-compliance or where enforcement action or additional local conditions have been necessary. However, it is possible that such a location is on a genuine path of improvement and a technology trial may assist with that. Any final decision will be a matter for local police and local licensing authorities.

A sandbox is not an endorsement from government for a specific business model, product, service or new way of doing something.

What will a sandbox produce?

We expect the trial to have explicit learning objectives to test the viability of the model under test or trial. The learning from the trial will assist in identifying consumer protection issues that need to be addressed and support the development of robust national standards for technology. The innovator will report what it has learnt and the results of a trial shall be published as part of an evaluation process. The Home Office and OPSS will consider the results during future policy development.

Any use of technology beyond the agreed time limits of the sandbox will be a matter for local authorities and local police in consideration of continued compliance with the mandatory licensing conditions.

What are the benefits of a sandbox?

We hope that this regulatory sandbox can help to bring the cost of innovation down, reduce barriers to entry, and allow regulators and government to collect important insights before deciding if further regulatory action or improvement of legislation is necessary.

What kind of technological innovations might be suitable for a sandbox?

Some of the technologies that may be suitable for a sandbox include:

• Technologies that enhance the likelihood of preventing young people under 18 years old from accessing alcohol
• Technologies that help reduce violence or abuse towards workers in licensed premises when challenging young people for ID
• Technologies that secure effective controls on delivery, click & collect or dispatch of alcohol
• Technologies that reduce the burden on business for gaining age assurance
• Technologies that enhance the protection of personal data of customers purchasing alcohol
• Technologies that can reduce risks of potential disorder in queues or groups at off licensed premises

Proposals can relate to the retail sale of alcohol, on or off licensed premises, supply in clubs or postal, remote or novel manners of the delivery of alcohol. They can include new or emerging technologies, delivery channels or operational processes.

What are the benefits of taking part in the sandbox?

There are a number of benefits to your organisation participating in the sandbox. These include:

• access to local responsible authority expertise and support;
• increased confidence in the compliance of your finished product or service with legal requirements;
• being seen as accountable and proactive in your approach to the protection of children and vulnerable people from alcohol harms – by customers, regulators and other organisations – leading to increased consumer trust in your organisation;
• the opportunity to inform further development of robust industry standards for age verification technology;
• supporting the UK government in its ambition to be an innovative digital economy

What are the conditions of a sandbox?

A proposal put forward must set out how the proposed trial will protect the licensing objectives throughout the course of the test or trial. Although it is accepted that an unsuccessful test or trial may have an adverse impact on the licensing objectives, this should be marginal and a test or trial cannot set out to have such an adverse impact. A proposal must set out how the innovator (and any partners) will cooperate with and secure the support of relevant local responsible bodies, which must, as a minimum, include the local chief officer of police and local licensing authority. It must also set out how the existing legal requirements, including the age verification mandatory licensing condition, will continue to be met during the trial.

The Home Office and OPSS will put in place agreements with successful applicants to allow participation in the sandbox. If any of the terms of that agreement, including compliance with the mandatory condition for age verification, are breached then the Home Office will retain the right for participation in the trial to be stopped by removing its support and ending the agreement. Any enforcement action will be a matter for the local police and the local licensing authority.

The trial must be completed before 30 April 2022, with the reporting completed and published by 30 June 2022.

Confidentiality and Intellectual Property

The Home Office and OPSS do not require confidential or commercially sensitive information to be included in proposals to participate in the sandbox. However, should the applicant consider it necessary to provide such information it should indicate which information it considers to be confidential and provide clear reasons why it regards such information as confidential. The Home Office and OPSS will protect any confidential information in accordance with commercially sensitive information handling protocols.

The applicant will retain all intellectual property rights in materials contributed to the sandbox and/or developed during participation in the sandbox, but the Home Office or OPSS may use such intellectual property as is reasonable to exercise its rights and perform functions in connection with the sandbox.

How to submit a proposal?

Any innovator or operator of any licensed premises can apply to establish a regulatory sandbox test. Innovators or operators can make more than one application to undertake more than one sandbox test in different locations, but applicants are reminded that the intention of the sandbox is to provide for small-scale localised testing or proof of concept for technological innovations.

Application should be submitted by completing the online form. As a guide, each application shall not exceed 12 pages (A4, font size 12) with diagrams and schematics encouraged. There is no need to submit evidence in support of the proposals, but the selection panel may ask for additional information if it considers it appropriate. Selection will be based on the first 12 pages submitted and subsequent pages will not be considered. If you have a problem completing the form online, please use the email at the end of this document to contact Home Office officials.

An applicant shall submit a proposal covering the following matters (word limits shown are maximum):

• The identity of the lead organisation for the sandbox test
• A description of the innovation to be tested or trialed – this must include a detailed description of the problem or challenge that the innovation is seeking to address and how, in the opinion of the applicant, the innovation will seek to address that problem or challenge (400 words)
• A description of the impact solving the problem or challenge will have on promoting or enhancing one or more of the licensing objectives (400 words)
• A description of the ethical challenges presented by the proposed test or trial, including how the applicant seeks to manage the ethics, including data ethics. (400 words)
• A description of how the test or trial will be assessed, independently validated and the results reported, including how these will be made publicly available. (400 words)
• A description of how the test or trial will contribute to knowledge, the development of industry standards and supporting improvements in guidance, legislation or the regulatory environment in the future. (400 words)
• A description of whom the applicant considers will be involved in the test or trial, the specific location or locations involved and how the applicant has secured the involvement of relevant responsible authorities.
• A description of the relevant mandatory conditions that cause concern to the operator or innovator for the conduct of the trial and how they will ensure compliance with those provisions.
• A description of the timetable for the proposed test or trial.
• A description of how the proposed test or trial will be managed and funded.

How will applications be assessed?

The Home Office and the OPSS will assess applications based on the following criteria:

• Does the application show a truly innovative approach that is capable of furthering knowledge and understanding of how technology could improve or enhance achieving the licensing objectives?
• Has the applicant properly identified, understood and adequately addressed, in consultation with relevant responsible authorities, how it will safeguard compliance during the sandbox trial, how it has secured appropriate enforcement policies and how it will ensure, as far as practically possible, that the licensing objectives are not compromised?
• Has the applicant properly identified, understood and adequately set out mitigation measures for the ethical challenges (including data ethics) presented by the proposed test or trial?
• Are the plans for evaluation and publication of the results of the test or trial adequate and appropriate.
• Are the plans for contributing to standards and the future regulatory environment adequate and appropriate?
• Are the timetable, management and funding plans for the test or trial adequate and appropriate?

The total number of sandbox tests or trials active at any one time will take into account the burden on the Home Office, OPSS and local responsible authorities to manage them; which may mean that some applications are rejected on grounds of limited resources.

What if the nature of the trial changes during the trial period?

Trialing a new innovation can be an iterative process and, whilst we would expect the overall trial to be within the broad parameters set out in the trial proposal, we accept that in-trial learning may require changes during the trial period. The local written agreements should set out how this will be managed with local responsible authorities. Any significant changes to any trial should be notified to the Home Office and OPSS using the email address at the end of this guidance note.

We welcome innovative approaches to the trials, including the option to run a series of consecutive or concurrent trials, as innovators may seek to test different aspects of their system in a controlled manner. This includes support for applications with multiple proposals for consecutive or concurrent trials providing that individual trials are clearly distinguished.

The selection panel will consider iterative changes to trial activity during a trial period provided this is genuinely iterative and controlled.

Where to send the proposal?

Proposals should be submitted online by completing the template form provided.

Any queries, including errors with this application process, should be sent via email to [email protected].