The Department for Work and Pensions has announced a significant new initiative to combat welfare fraud through targeted bank account checks, with the department's chief confirming that a dedicated team is working at full capacity on the operation.
Targeted Reviews and Human Oversight
Appearing before a parliamentary select committee, DWP Permanent Secretary Peter Schofield emphasised that the department is conducting "targeted case reviews" as part of its fraud and error reduction strategy. Schofield stressed that no benefits would be stopped without human intervention, stating that officials review all available evidence before making any decisions.
"In our fraud and error work, we don't stop any benefits without a human looking at this, reviewing all the evidence from all sorts of different sources that they've got," Schofield explained. "This includes understanding markers of vulnerability or complex needs as well, and then making a decision off the back of that."
Initial Focus on Three Key Benefits
The bank account monitoring programme will initially focus on three specific benefits that have demonstrated the highest rates of fraud and error:
- Universal Credit
- Employment and Support Allowance (ESA)
- Pension Credit
Notably, the state pension has been exempted from these new checking procedures. The DWP has identified that these three benefits represent areas where improved verification could yield significant savings and reduce incorrect payments.
Major Banking Institutions Involved
Under the new anti-fraud measures, the fifteen largest banks and building societies in the United Kingdom will be required to cooperate with the DWP's verification processes. These financial institutions collectively handle the vast majority of benefit payments across the country.
The complete list of banks involved in the programme includes:
- Bank of Scotland
- Barclays
- Halifax
- HSBC
- Lloyds Bank
- Metro Bank
- Monzo Bank Limited
- NatWest
- Nationwide
- Santander
- Starling Bank
- The Co-operative Bank
- Royal Bank of Scotland (RBS)
- TSB
- Yorkshire Bank
Comprehensive Coverage of Benefit Payments
The DWP has confirmed that these fifteen financial institutions receive over 97 per cent of all payments made to benefit claimants across the United Kingdom. This comprehensive coverage ensures that the new checking system will apply to the overwhelming majority of individuals receiving state support.
"We know that the vast majority of DWP claimants bank with, and have their benefits paid into, the largest 15 banks in the UK," a department spokesperson stated. "These banks and building societies receive over 97 per cent of all payments to DWP claimants."
Independent Oversight and Safeguards
In response to concerns about the potential overreach of these new powers, the DWP has established a framework of independent oversight and parliamentary reporting requirements. The department's guidelines specifically address concerns that were raised about the potential for draconian implementation.
The framework states: "There will be independent oversight and reporting of Eligibility Verification powers to Parliament. The Secretary of State will appoint an independent body or person, following an open selection process, to review and report annually on how the powers have been exercised."
This independent oversight will assess whether the powers have been used in accordance with legislation, evaluate the actions taken by financial institutions, and determine the effectiveness of the measures in identifying incorrect payments. The Labour Party government has identified welfare fraud reduction as a significant policy priority, with these new bank checking powers forming a central component of their approach to ensuring benefit payments reach only those who are legitimately entitled to them.
