The UK government will bring forward a new Fraud, Error and Debt Bill in this parliamentary session to crack down on fraud in the social security system.
This Bill is projected to have a significant impact over the next five years, with an expected savings of £1.6bn. It aims to enhance and modernise the Department for Work and Pensions (DWP)’s authority to prevent fraud, recover funds lost to fraudulent activities and protect vulnerable customers from accruing debt.
In detail, the legislation will empower the DWP to improve investigations into suspected fraud by granting new powers of search and seizure, allowing for more effective action against criminal gangs defrauding taxpayers.
It will also enable the department to recover debts from individuals who can afford to repay but have avoided doing so, aiming to promote greater fairness in debt recovery efforts.
Additionally, the legislation will require banks and financial institutions to share data that may indicate potential benefit overpayments, contributing to a more robust approach to tackling fraud within the social security system.
Safeguarding measures will be included in the bill to protect vulnerable customers, as emphasised by the government. Employees will receive thorough training to ensure the proper application of the new powers, and improved oversight as well as reporting mechanisms will be established to monitor their use.
Notably, the DWP will not have access to individuals’ bank accounts and won’t disclose personal information to third parties.
During the bill’s passage, a ‘Code of Practice’ will be developed and consulted on to ensure the safe use of the new powers.
A major motivation behind this legislation is that fraud and error in the social security system currently cost taxpayers nearly £10bn annually. In its announcement, the government stated that since the pandemic, a total of £35bn of taxpayers’ money “has been taken away from those who need it most”.
Furthermore, fraud has become increasingly sophisticated, with technologies like Artificial Intelligence (AI) being used more often. Without new legal powers, the DWP is unable to effectively keep up with these evolving tactics to combat it.
Additional information regarding the legislation’s scope will be provided upon the bill’s introduction.
