DWP Granted Extensive New Powers to Check Benefit Claimants' Bank Accounts
The Department for Work and Pensions (DWP) has been granted extensive new powers to clamp down on benefit fraud and overpayments, but a top UK watchdog has raised significant concerns about maintaining public trust and preventing overreach.
New Authority Under Fraud, Error and Recovery Act
Since last December, the DWP now possesses new authority under the Fraud, Error and Recovery Act that allows the department to compel banks and other financial institutions to provide information to help verify claimants' eligibility and entitlement to benefits. This represents a substantial expansion of the department's investigative capabilities.
The powers extend beyond simple verification processes. The DWP can now force third parties to provide information during criminal investigations and, in certain circumstances, even recover money owed by individuals directly from their bank accounts without needing to obtain a court order first.
Public Accounts Committee Warns of Overreach Risks
In a new report published recently, the Public Accounts Committee (PAC) has issued strong cautions about the potential for overreach with these new powers. The committee emphasized that the department must do more to prevent overpayments from occurring in the first place rather than relying on these expanded investigative tools.
Sir Geoffrey Clifton-Brown, Chair of the PAC, declared that the authority's new powers to "reach further into citizens' lives" are "significant" and called for greater clarity about how these powers will be implemented in practice. He stressed that while supporting efforts to ensure people receive correct benefits, safeguards must be established from the outset.
Department's Internal Issues Highlighted
The PAC report comes after the DWP admitted that 26,000 carers were incorrectly recorded as having overpaid carer's allowance in a major administrative blunder. The department has committed to correcting every case, but identifying all those affected is expected to take approximately two years, with some 200,000 cases requiring review.
According to the PAC report, a "lack of integrated, concerted leadership from the department allowed this issue to persist, and it must now work quickly to provide redress to the people affected." The committee emphasized that the DWP needs to "look in the mirror" and address its own internal issues rather than focusing entirely on claimants.
Growing Challenges and Urgent Action Needed
The report highlighted several challenges faced by the department, including the growing problem of people not receiving their full benefit entitlement because they fail to inform the DWP of changes in their circumstances. Sir Geoffrey warned that "urgent action" is needed to address these long-term problems while maintaining appropriate oversight of the new powers.
"Our report finds beyond doubt that current ambitions to address unacceptable levels of benefit fraud and error are not stretching enough," Sir Geoffrey stated. "More could be done on a cross-government basis to improve the accuracy of benefit payments."
DWP Response and Safeguards
A DWP spokesperson responded that the department has introduced "major reforms to ensure people are paid the correct benefits, to recover overpayments and to help save billions of pounds for the taxpayer." The spokesperson emphasized that the powers in the Fraud, Error and Recovery Act contain "numerous safeguards" and will be "independently overseen."
"We will not have access to claimants' bank accounts when checking they are receiving the correct benefits," the spokesperson clarified. "We are forecasting an ambitious reduction in fraud and error levels to 2.8% by 2028-29, the lowest level since tax credits were introduced in 2003-04."
The PAC report marks the 37th consecutive year in which the DWP has had its accounts qualified by the UK's chief auditor due to material levels of fraud and error, highlighting the persistent nature of these challenges despite new legislative tools.
