DWP update on extensive powers to fight benefit fraud | Personal Finance | Finance

The Department of Work and Pensions (DWP) is poised to gain increased authority to recoup funds directly from the bank accounts of fraudsters, following a significant progression in the House of Commons this week.

The Public Authorities (Fraud, Error, and Recovery) Bill, which has passed its Third Reading, could empower the DWP to more efficiently apprehend fraudsters, prevent overpayments, and protect taxpayer’s money.

It will allow DWP to claw back money directly from fraudster bank accounts where they could pay money back but are failing to do so. The Bill is likely to eventually become law once the House of Lords process finishes, even if they raise objections, because of Labour’s huge Commons majority.

Moreover, the Bill would allow the DWP access to data from banks and other financial institutions to confirm the eligibility of benefit recipients, ensuring they receive the correct payments. This step is designed to stop individuals from accruing debt due to incorrect payments and aid the DWP in detecting fraudulent claims.

The DWP has guaranteed that no personal information will be exchanged with financial institutions for account identification purposes, and it will not have access to people’s bank accounts or spending details during the verification process.

Anticipated to save taxpayers £1.5 billion over the next five years, the Bill is part of wider plans detailed in the Autumn budget and Spring Statement to save £9.6 billion by 2030. These savings can then be channelled towards public services as part of the government’s Plan for Change, reports the Daily Record.

Central to the Bill are key protections, ensuring that the powers are used appropriately and effectively, with a strong focus on safeguarding vulnerable customers.

A spokesperson from the Department for Work and Pensions (DWP) outlined an example of the new approach, saying: “People will only be disqualified from driving as a last resort when they don’t rely on their car for work or for caring responsibilities and where they continually avoid repayment. The staff are set to receive top-notch training on the use of these new powers, with the DWP also putting into place increased oversight and reporting structures.”

Minister for Transformation Andrew Western said: “Enhancing our powers is essential to fulfilling our commitment to the public, as they will enable us to address the unacceptable levels of fraud and error we’ve inherited and better protect public funds.”

Western also stressed the importance of combating welfare criminality. He said: “By strengthening our ability to catch criminals and prevent overpayments, we can keep up with the evolving nature of welfare fraud while reducing the risk of people falling further into debt, ensuring that more resources are directed towards improving the lives of people across the country.”

The Government is faced with tackling major deficiencies within the current welfare system, which has seen the public purse haemorrhaging close to £10 billion annually due to frequent fraud and mistakes. The figures paint a grim reality with a whopping £35 billion wasted on wrongful payouts since the pandemic began, benefiting those who aren’t rightfully entitled.

Furthermore, the Chancellor has reinforced these initiatives in the Spring Statement, revealing plans for appointing more than 500 new DWP staff who will focus on tracking down fraud and errors. These workers will utilise government databases to correct mistakes in benefit claims and introduce stricter verification processes for Universal Credit seekers to assess their savings, earnings, and outgoings.

The Cabinet Office’s Public Sector Fraud Authority is poised to gain greater authority with upcoming legislation designed to boost its capability to uncover and recover funds from fraudulent activities across diverse public sector bodies and groups.

Cabinet Office Minister Georgia Gould said: “This Bill will save taxpayers’ money. People are currently getting away with stealing vast sums of cash because our investigators don’t have the powers they need to detect and recover fraud across the public sector.

“We’re giving our investigators new powers to tackle fraud wherever they find it – as well as doubling the time available to bring pandemic fraudsters to justice.”

With these latest actions, the Bill is set to progress to the House of Lords for additional scrutiny.