Budget documents explain how DWP bank account 'checks' will work

Budget documents show how the bank accounts from the Department for Work and Pensions ( DWP ) will operate amid a crackdown on fraud. The Labour Party Chancellor Rachel Reeves delivered her Autumn Statement on Wednesday, promising a clampdown on benefit fraud.

Budget documents state: "This package includes programmes that will prevent, detect, and correct fraud and error in the benefit system. This includes 3,180 additional fraud and error staff across DWP and HMRC saving £800 million in 2029-30, new investment to verify changes in Universal Credit (UC) claims saving £250 million in 2029-30 and extending the Targeted Case Review to help spot incorrect UC claims saving £2.5 billion in 2029-30.

"DWP also continues to use data from across government and the private sector to tackle fraud and error. The forthcoming Fraud, Error and Debt Bill will introduce new powers to check benefits are being paid correctly using data shared by banks and financial institutions, saving £475 million in 2029-30.

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"The Bill will also strengthen DWP’s powers to recover debt, saving £260 million in 2029-30. DWP will continue to collaborate with other government departments such as HMRC, the Home Office and Department for Science, Innovation and Technology to further strengthen data sharing and explore new data innovations to tackle fraud and error."

Fraud and error in the welfare system costs the government nearly £10 billion a year, it says. Labour says: "The government is committed to tackling this to fix the public finances and invest in public services. That is why the government is announcing the biggest welfare fraud and error budget package in recent history, saving £4.3 billion in 2029-30."

Chancellor Reeves confirmed that the benefit department's counter-fraud team would be given new powers and would use "innovative" methods to prevent illegal activity. One of its new powers will give the DWP "direct" access to bank accounts to recover debt.