A think tank has called for reform of the Banking Levy on banks and financial service providers to fund the delivery of digital inclusion schemes.

A new report on big digital firms and the digital economy by IPPR has set out a number of measures to ensure that the digital revolution benefits local economies.

It calls for a Digital Transition Levy – a reformed version of the Banking Levy – which could fund the delivery of digital inclusion schemes against new targets.

This Levy, which IPPR argues could raise ‘billions of pounds a year’, would go towards boosting internet connectivity, strengthening digital skills and fostering innovation.

The think tank’s report also recommends the setting of new targets, backed up by investment, to protect cash access for those who rely on it. This would help narrow the digital divide across the UK as cash is phased out by digital payment methods.

‘The future will have less cash. But urgent action is needed to set the UK on course towards an economy that is both more digital and more just,’ said Rachel Statham, IPPR economic analyst and lead report author.

‘By getting ahead now, we can invest the billions needed to get every part of the country ready for a more digital future and protect access to cash where people rely on it.’

Responding to the report, Cllr Peter Fleming, chairman of the Local Government Association (LGA) Improvement and Innovation Board, said that councils were trying ‘to embed digital inclusion into the heart of everything they do.’

‘Getting people online can change their lives for the better in so many ways,’ he said. ‘As part of the LGA’s wider sector-led improvement offer, our Digital Inclusion Programme is helping councils to reach out and provide a vital service for residents who don’t have access or confidence to use digital.

‘Despite facing huge reductions in funding over the past 10 years, councils have shown themselves to be at the forefront of innovation in the public sector to improve the lives of their residents.’