- Department for Work and Pensions announces it has saved £1.3 billion from fraud and error
- Comes as governmentupdatesplanto further crack downonbenefit cheats, including creating new legal powers and hiring more staff
- Changes expected to save the taxpayer £9 billion by 2027/28, andfollows Prime Minister’s sweepingwelfare reform packagelast month
The Government can today reveal that it has saved the taxpayer over £1.3 billion fromfraud anderrorin the past year, as it sets out the latest version of its Fraud Plan.
It follows a crackdown on thousands of people fraudulently claiming Universal Credit, including work by Department for Work and Pensions (DWP) investigators and the Crown Prosecution Service to smashBritain’s biggest-ever benefit fraud case–securing convictions for a £53.9 million Universal Credit scam.
DWP are also planning to save £9 billion by 2028in a sustainedcrackdownon benefits cheats.From hiring 2,500 new staff to check millions of Universal Credit claims foraccuracy, modernising information-gathering powers, to introducing a new civil penalty to punish fraudsters, and investing £70 million into advanced data analytics – thesemeasures will mean those who wish to exploit the natural compassion and generosity of the British peoplewillhave nowhere to hide.
In addition,the Data Protection and Digital Information Billcurrently before Parliament will help the Department, working with third parties such as banks, to identify claims that signal potential fraud and error.This measureis expected to save the taxpayer £600 million over five years, on top of the £9 billionprojected to besaved from the wider plan.
The news comes on the heels of the Prime Minister setting out sweeping reforms of the welfare system last month, including a new bill in the next Parliament to tackle benefit fraud head-on. DWP will committo introducing legislationmeaningits investigationsmirror HMRC powersfor tax,such as the ability to make arrests and conduct searches and seizures by warrant, and will alsomoderniseinformation-gathering powers to help prove or disprove fraud more quickly.
Secretary of State for Work and Pensions, Mel Stride, said:
We are scaling up the fight against those stealing from the taxpayer, building on our success in stopping £18 billion going into the wrong hands in 2022-23.
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With new legal powers, better data and thousands of additional staff, our comprehensive plan ensures we have the necessary tools to tackle the scourge of benefit fraud.
DWP have taken significant steps to crack down on fraud, including legislating for new powers and hiring thousands of staff to review Universal Credit claims for accuracy.
DWP isbuilding on this byhiring over 2,500 external agents on a temporary basis as part of the Targeted Case Review to help spot incorrectness in Universal Credit claims. Combined with DWP’s own internal agents in the review, this will take the headcount to nearly 6,000 people.
The DWP is also exploring a new civil penalty to punish fraudsters, potentially broadening the scope of cases that can receive a penalty when the courts are not prosecuting, and increasing the value of the civil penalty.
On top of this, the DWP will also make changes to Universal Credit including new partly automated checks on self-employed income, new online prompts for claimants to re-declare their circ*mstances (such as if they have moved in with a partner), and increasing checks on capital when people claim the benefit to ensure they are eligible.
These measures will be backed up by advanced data analytics, using machine learning, to detect and prevent fraudulent claims. Final decisions on accepting or stopping any claim will continue to be made by a member of DWP staff.
The plan comes as fraud has become responsible for almost 40% of all crime, with just over a quarter of respondents to the2022 British Social Attitudes Surveysaying that it is either ‘Not Wrong’ or only ‘A Bit Wrong’ for an unemployed benefit claimant to not report £3,000 from a casual job.
Additional Information
- The full, updatedFighting Fraud in the Welfare Systemdocument can be viewed online here:https://www.gov.uk/government/publications/fighting-fraud-in-the-welfare-system
- The DWP third party data measure, included in the current Data Protection and Digital Information Bill, is a data sharing power. It requires third partiessuch as banksto look provide relevant information to DWP that may signal where DWP claimants do not meet the eligibility criteria for the benefit they are receiving.
- These measures will require third parties to provide only limited, relevant information that may signal whether benefits are being improperly paid. It does not give DWP access to anyone’s bank account or see how claimants are spending their money.
- DWP aims to save £9 billion in the coming years from dedicated counter-fraud activity, which builds on £18 billion already saved in 2022/23 through, not only the Department’s dedicated counter-fraud activity, but also the controls in place to prevent fraud and error.
