The Conservative government was set to give DWP extraordinary powers; will the Labour government do the same?
In recent years, the UK Department for Work and Pensions (“DWP”) has been trying to acquire new powers to combat fraud, error and debt in the benefits system. It raises concerns about privacy, dignity and the potential for wrongful actions. Will the Labour government also try to give DWP these new powers?
In May 2024, the Conservative government published a policy paper titled ‘Fighting Fraud in the Welfare System: Going Further’, setting out the progress the Government had made in tackling the high levels of fraud and error in the welfare system and outlining where it planned to go going further.
No one can deny that benefit fraud is costing the public coffers an extraordinary amount. As the Government stated in its preamble to the paper:
Since we set out our Fraud Plan in 2022, we have saved the taxpayer over £1 billion and in the same year we cut fraud and error in the welfare system by 10%.
We have cracked down on thousands of people fraudulently claiming Universal Credit. We are legislating to give us better access to vital data held by third parties, like banks, so we can more proactively detect fraud and save the taxpayer £600 million. And we are taking down the organised criminal gangs targeting the welfare system. Thanks to the work of DWP investigators and the Crown Prosecution Service, we smashed Britain’s biggest benefit fraud gang, securing convictions for a £50 million Universal Credit scam.
Since the pandemic, over £8 billion a year has been overpaid in the welfare system because of fraud and error. But our focus on delivering our Fraud Plan has seen DWP: invest in our counter-fraud professionals and our data analytics meeting our objective to recruit 2,000 Targeted Case Review agents and 1,400 counter fraud professionals; introduce new legislation that if passed will provide DWP with new legal powers to fight fraud and error; and harness the joint power of the public and private sector.
This has contributed to a 10% reduction in fraud and error in the welfare system in 2022/23, and we also saved the taxpayer £1 billion from our dedicated counter-fraud activities. When combined with our controls we estimate that our controls and activities have prevented nearly £18 billion of losses in 2022/23. In 2023/24, based on our initial savings estimates, we have saved £1.35 billion from counter-fraud activities exceeding the £1.3 billion target we set.
Fighting Fraud in the Welfare System: Going Further, Department for Works & Pensions, May 2024
So, benefit fraud is huge and does need to be clamped down on. There is however an obvious red flag: setting a counter-fraud budget or target based on savings is always going to result in unfair and wrongful actions. A target puts pressure on DWP counter-fraud staff to find fraud when there is none, simply to meet the targets set.
The Going Further paper builds on a paper published two years earlier. In May 2022, in response to rising benefit fraud, DWP published a Command Paper titled ‘Fraud Plan, Fighting Fraud in the Welfare System’. Command Papers are official government documents presented to Parliament issued by His Majesty’s Government (“HMG”). They convey information or decisions that the government think should be drawn to the attention of one or both Houses of Parliament.
The 2022 paper outlined a three-pronged approach for preventing fraud from entering the welfare system and for detecting and stopping fraud when it does, by:
- investing in DWP’s frontline counter-fraud professionals and data analytics;
- creating new legal powers to investigate potential fraud and punish fraudsters, subject to parliamentary time; and,
- bringing together the full force of the public and private sectors to keep one step ahead.
Yet another red flag is raised: bringing together the public and private sectors. The private sector should not be given any sway or influence on the relationship between a country’s government and citizens. By the government forming partnerships with the private sector, it will be businesses’ objectives that the Government will aim to satisfy and not those of citizens.
What new powers has the DWP proposed creating for itself and, by extension, for the for-profit businesses that partner with DWP and can influence these powers to their benefit?
The proposed new powers include arresting people where fraud is suspected, searching premises and seizing evidence related to suspected fraud and collecting banking information as soon as fraud is suspected, rather than waiting for a criminal investigation.
In mid-2023, a survey was conducted of 2,127 people, of which 618 were benefit claimants – only 618 claimants represented the voices of around 22.7 million people across Great Britain to which DWP pays state pension and welfare benefits. It’s important to note that the survey questionnaire was based on a draft supplied by DWP.
Commenting on the survey results, Benefits & Work wrote: “Even amongst a group of claimants, the DWP claim, more people considered the [proposed new DWP] powers acceptable than found them unacceptable, with the exception of collecting information about where claimants are spending money.”
When public bodies in the UK make decisions, they are often subject to statutory or common law duties that require them to first consult people who may be affected by the decision. These public consultations often involve online surveys, written submissions or public meetings to gather input. “Consultation is one of the most important activities government can undertake,” Sir Jeremy Heywood, former Cabinet Secretary and Head of the Civil Service, wrote in a 2016 blog.
However, government surveys are not as governments portray them to be. When completing and interpreting the results of government surveys, we should always be aware that the Delphi method is employed.
The Delphi method relies on subjective opinions, which can be influenced by individual biases and assumptions. Simply put, the survey is rigged. The questions and answers are designed so that the survey participant will agree with the Government’s basic premises.
So, if the Government wants participants to agree that more powers be given to the DWP, the DWP will ask questions and provide a list of answers to select from that guide the participant to answer in a way that the survey results arrive at the Government’s preferred conclusion.
What is underhanded in using this method for policy-making, is that the Government can claim that the public has been consulted, but it is a subjective and not objective consultation.
Further reading: UK government uses Delphi method to manipulate outcome of public consultations
Benefits & Work highlighted some of the concerns surrounding the new powers being granted to the DWP that its survey was not designed to pick up:
Given the levels of incompetence, data loss and unaccountability at the DWP, the possibility that staff could arrest claimants and seize their possessions is likely to alarm many readers.
Equally, the idea that the DWP could begin examining bank accounts and looking at how a claimant is spending their money merely because they suspect fraud is a cause for real concern.
With the department increasingly relying on AI and algorithms they don’t fully understand to detect fraud, the possibility of claimants being wrongfully arrested and facing long and poorly resourced investigations seems real.
DWP considers powers of arrest, seizure and collecting information on where claimants spend money, Benefits & Work, 1 November 2023
Regarding the reliance on artificial intelligence (“AI”) and computer algorithms as noted in the final paragraph of the excerpt above, The Guardian noted that in 2023, researchers found 350 low-paid workers every day were raising complaints about errors in welfare top-ups, causing financial hardship and emotional stress.
And in 2022, the National Audit Office warned a DWP algorithm used to detect fraud in the universal credit system had the potential to “generate biased outcomes” that “could inadvertently obstruct fair access to benefits.”
In a letter from 42 organisations to the then Work and Pensions Secretary Mel Stride, citizen rights groups reminded him of the Post Office Horizon scandal. “There are approximately 22.6 million individuals in the welfare system … The Horizon scandal saw hundreds of people wrongfully prosecuted using data from faulty software. The government must learn from this mistake – not replicate it en masse.”
The DWP plans to spend £200 million annually on the Fraud Plan, Fighting Fraud in the Welfare System initiative. In its May 2024 paper, the Government reported that it has already hired 1,400 additional staff for frontline counter-fraud teams and created a new 2,000-strong team solely for checking Universal Credit claims.
Before the General Election held on 5 July, the Conservative Party confirmed in its manifesto that if elected as the next UK Government, it would press ahead with welfare reforms which include a new Fraud Bill.
“The Fraud Bill will give the Department for Work and Pensions (DWP) powers similar to HM Revenue and Customs (HMRC) so that benefit fraud will be treated in the same way as tax fraud. The manifesto says this will include ‘new powers to identify, investigate and pursue fraudsters’,” Daily Record reported.
“The measures in the Fraud Bill will give the DWP powers to carry out warrants for searches, seizures and arrests, to enforce civil penalties to a wider group of people, and provide new ways to gather information from more data streams as part of investigations into suspected benefit fraud,” the media outlet added.
It sounds as if DWP has ambitions to become a fully-fledged police force and more.
It was in April that the then Prime Minister Rishi Sunak pledged to introduce the Fraud Bill which adds to DWP’s powers through legislation already being introduced in the form of the Data Protection and Digital Information Bill (“DPDI”).
The DPDI, which has not progressed beyond its second reading in the House of Lords due to the General Election, allows the DWP to obtain information, at its discretion, from the banks of those receiving benefits. As well as the additional powers to make arrests and seize property, the Fraud Bill would allow DWP to impose civil penalties on a broader range of people and access data from additional third-party sources, not only banks, during fraud investigations.
Further reading: Don’t turn us into social security cops, banks tell UK government, Politico, 12 March 2024
It seems that Sunak was unable to introduce the Fraud Bill as promised; since it was first reported, we were unable to find a reference to this bill either in corporate media or on the UK government’s website.
As the Labour government doesn’t want to appear to be following the same policies as the Conservative government – it has frequently touted its “change” agenda – it’s unlikely this particular bill will see the light of day. However, this doesn’t mean it is the end of the road for DWP to gain the extraordinary powers it desires. Labour’s “change” does not necessarily mean change from the Conservatives’ policies, which have not been conservative in recent years; it sometimes means a different way of presenting the same policy and labelling it as “change.” We can use a recent initiative of Labour’s Work and Pensions Secretary Liz Kendall to demonstrate this.
Last week, Kendall announced a fundamental reform to change the DWP from a “Department of Welfare to a Department for Work.” To do this, she will set out bold plans to tackle “economic activity” by enabling local leaders to tailor schemes to get people back into work – and to prioritise good, rewarding, well-paid work.
“Economic inactivity” is Labour’s psychobabble for describing those who claim benefits and are not actively looking for work or available to start a job. They are, apparently, not “unemployed” but are “economically inactive.” Can you distinguish between “unemployed” and “economically inactive”? No. Nor can we.
“I can confirm today that we will empower local leaders and local areas to tackle economic inactivity and open up economic opportunity,” she said last week.
So, what does Kendall mean? Reading up about Kendall’s “plans” HERE and HERE, we are none the wiser except: by “local leaders” she means Mayors; and, her initiative will cost taxpayers money.
A pilot programme to support 2,200 people into work over four years will require a £10 million investment. It is claimed that the £10 million investment will generate £70 million in economic benefits, which includes a £28m reduction in benefits payments. It would be interesting to see the calculations to arrive at the other £42 million in economic benefits and what is classed as an economic benefit. Is it simply a case that the more disposable income someone has the more they will purchase?
Most importantly, Kendall revealed that in her view it is less about “change” and more about the words used. Kendall promised a “major overhaul” of job centres, bringing together Jobcentre Plus and the National Career Service to focus on helping people get into work, rather than managing benefit claims. The Conservatives’ plan was not dissimilar. They had proposed tougher sanctions for people able to work who did not take jobs offered to them, alongside extra career support.
It seems the main difference between the two governments’ plans is, as Kendall argued, the previous government’s “divisive rhetoric about strivers versus scroungers” did nothing to get people back into work, adding that the “vast majority” of those out of work face complex barriers to getting a job.
So far, it seems Labour relies on using words – the “Department of Welfare” will become the “Department for Work” – but the plan, if there is one, is not so different. Perhaps the same will happen with granting extraordinary powers to DWP; the same powers granted but by another name.
We should remember that while the government may change hands, the civil service, which provides them with “expert advice” for policy-making, does not. Keep an eye out for the Labour government introducing a bill that grants DWP extraordinary powers, although it is not likely to be called the Fraud Bill.
