- Fraudsters and debtors face tough consequences including
direct deductions from bank accounts as the Public Authorities
(Fraud, Error, and Recovery) Act receives Royal Assent today.
- New powers to investigate fraud, identify benefit
overpayments and recover debts expected to save £1.5 billion by
2030, as part of wider action to save £14.6 billion by 2031.
- Measures restore fairness in the social security system and
show Government on the side of hardworking taxpayers.
The Public Authorities (Fraud Error and Recovery) Act gives the
Department for Work and Pensions extra powers to catch
fraudsters, prevent overpayment and protect taxpayer's money.
As a result, DWP are now set to save the taxpayer £1.5 billion by
2029/2030 by being given now access to new data, modern tools and
more powers to investigate fraud and recover money lost to
benefit overpayments. This is part of Government's commitment to
savings of £14.6 billion up to the end of 2030/31 from fraud,
error and debt activity, which includes investment to deploy up
to 3,000 additional staff and strengthen our data, analytics and
investigative capability.
This comes as the Chancellor announced plans at the Budget to
accelerate efforts to drive out incorrectness by extending the
Targeted Case Review, which will save an additional £1.2 billion
in 2030-31. This ensures the government can fund measures like
the scrapping of the two-child limit to lift 450,000 children out
of poverty, drive up living standards and deliver on the Plan for
Change.
Minister for Transformation MP said:
It is right that as fraud against the public sector evolves, the
government has a robust and resolute response.
The powers granted through the Bill will allow us to better
identify, prevent and deter fraud and error, and enable the
better recovery of debt owed to the taxpayer.
A benefits system people can trust is essential for claimants and
taxpayers alike – through this Bill that's exactly what we'll
deliver.
The government has chosen to act decisively with modern fraud
prevention powers that match the sophistication of today's
threats, after inherited out-of-control levels of fraud and error
were costing the taxpayer around £10 billion a year.
Under the new powers, DWP will now also get data from banks to
help ensure those who receive benefits are getting the correct
payments, helping prevent people falling into debt and helping
DWP spot fraudulent claims.
Under this Eligibility Verification Measure, no personal
information will be shared by DWP, which will not have access to
people's bank accounts in verifying eligibility or be able to see
where people are spending their money.
Protections are central to the Bill, making sure there is
proportionate and effective use of the powers, and that DWP is
protecting vulnerable customers. Staff will be trained to the
highest standards on the appropriate use of new powers, and we
will introduce new oversight and reporting mechanisms.
The Cabinet Office's Public Sector Fraud Authority will also be
given more powers under the legislation progressing through to
the House of Lords today.
Cabinet Office Minister said:
Previous governments have sat back and accepted that fraud is
inevitable. We will not. We are transforming the state's defences
against those who seek to defraud the taxpayer and restoring
fairness.
This new law gives the Public Sector Fraud Authority and
government departments the powers and tools to proactively pursue
and recover billions of pounds lost to criminals and error.
We are ensuring there is no hiding place for those who cheated
the taxpayer during the pandemic, doubling the time limit for
bringing a civil claim to twelve years.
Additional Information
- The Public Authorities (Fraud, Error and Recovery) Act
received Royal Assent on 2 December.
- The Public Authorities (Fraud, Error and Recovery) Act
applies to reserved matters in GB (benefit administration is a
devolved matter for Northern Ireland).
- The Consultation for Codes of Practice will be launched in
December.
- Benefit fraud and error cost £9.5 billion in overpayments
during 2024-2025, equivalent to 3.3% of total benefit spending.
- The Act is expected to save £1.5 billion by 2029/2030 as
certified by the Office for Budget Responsibility.
- These plans, as part of wider action, meaning that since the
Autumn Budget 2024, the government has committed to save £14.6bn
from fraud, error and debt activity by 2030/31.
- Claimants should report any changes in circumstances promptly
to avoid overpayments.
