Biggest fraud crackdown in a generation
Source: gov.uk (2025-01-22)

Welfare fraudsters who cheated the taxpayer out of £7 billion last year could be banned from driving if they repeatedly fail to reimburse the public and repay their debt.

- Benefit cheats to be stripped of driving licences under new plans in government’s biggest fraud crackdown in a generation
- New Public Authorities (Fraud, Error & Recovery) Bill introduces measures to be tough on criminals and fairer to taxpayers
- The Bill alone is expected to save the Department £1.5 billion over the next five years, and forms part of wider government plans to save a total of £8.6bn over 5 years in the biggest welfare fraud and error budget package in recent history, as part of Plan for Change
Welfare fraudsters who cheated the taxpayer out of £7 billion last year could be banned from driving if they repeatedly fail to reimburse the public and repay their debt.

As part of new legislation set to be introduced in Parliament today to deliver the biggest fraud crackdown in a generation, benefit cheats could be disqualified from driving for periods of up to two years if they refuse all opportunities to repay the money they owe.

The Department for Work and Pensions (DWP) will be able to apply to the court with the justification to suspend fraudsters from driving, provided the debt is £1,000 or over and frequent requests to repay the debt have been ignored.

DWP’s serious organised crime investigators are also expected to be handed powers to apply to a court for search warrants. It means that for the first time, they will be able to support Police and search premises and seize items such as computers and smartphones as evidence against fraudsters.

The Bill alone is expected to save the Department £1.5 billion over the next five years, and forms part of wider government plans to save a total of £8.6bn over 5 years in the biggest welfare fraud and error budget package in recent history.

The new legislation is being brought forward after the government inherited a broken welfare system, with fraud and error in the social security system currently costing the taxpayer around £10 billion a year and, since the pandemic, a total of £35 billion of taxpayers’ money has been incorrectly paid to those not entitled to the money.

This Bill comes as the government seeks to bring forward measures to overhaul the health and disability welfare system as part of its Plan for Change, so it better supports people to enter and remain in work and to tackle the spiralling welfare bill – with new proposals for reforming the health and disability benefits system expected in the Spring.

This legislation also delivers on the government’s manifesto commitment to safeguard taxpayers’ money and demonstrates the government’s commitment to not tolerate fraud, error or waste anywhere in public services, including the social security system.

The measures in the Bill will be underpinned by a principle of fairness and proportionality - the priority is always to negotiate affordable and sustainable repayment plans, with these powers to be used as a last resort.

Secretary of State for Work and Pensions, Liz Kendall, said:

We are turning off the tap to criminals who cheat the system and steal law-abiding taxpayers’ money.

This means greater consequences for fraudsters who cheat and evade the system, including as a last resort in the most serious cases removing their driving licence. Backed up by new and important safeguards including reporting mechanisms and independent oversight to ensure the powers are used proportionately and safely.

“People need to have confidence the Government is opening all available doors to tackle fraud and eliminate waste, as we continue the most ambitious programme for government in a generation – with a laser-like focus on outcomes which will make the biggest difference to their lives as part of our Plan for Change.”

DWP will also have the power to recover money directly from bank accounts of those not on benefits or in PAYE employment who owe the Department and refuse to pay up, despite having the means to do so. The Bill will allow DWP to request bank statements to prove these debtors have sufficient funds to fairly repay what they owe. However, DWP will not have direct access to people’s bank accounts.

Modernising the approach to catching fraudsters, preventing overpayments and introducing new safeguards to further protect vulnerable customers means the DWP can keep pace with the sophisticated nature of fraud, while also ensuring law-abiding customers get the right benefits – preventing them from falling further into debt.

The Bill will also include safeguarding measures to protect vulnerable customers. Staff will be trained to the highest standards on the appropriate use of any new powers, and we will introduce new oversight and reporting mechanisms, to monitor these new powers.

The government will also bring forward Codes of Practice which will be consulted on during the passage of the Bill to provide further assurance on the safe use of the powers, and we have a clearly defined scope and clear limitations for the use of all the powers including the right to appeal the decision.

The Cabinet Office’s Public Sector Fraud Authority will also be given more powers under the legislation being introduced in Parliament today.

A brand-new measure will see the time limit for civil claims against Covid fraud doubled from six to twelve years. This step change in the ability to fight fraud committed during the pandemic will give the Covid Corruption Commissioner and the Public Sector Fraud Authority more time to investigate complex cases and apply their new powers retrospectively - including the ability to raid properties and retrieve money from Covid fraudsters’ bank accounts.

Georgia Gould, Minister in the Cabinet Office, said:

During the pandemic, when people and businesses needed government support the most, some people stole public money for their own personal gain.

This legislation gives the government tough new powers that can be used to investigate and recover money stolen from the public during covid and doubles the time we have to bring fraudsters to justice.

Taken together, these measures show the Government’s commitment to taking a responsible approach to public finances which is required for long-term economic growth, in order to deliver for working people up and down the country.

Additional Information

The new law will deliver on this government’s manifesto commitment to safeguard taxpayers’ money – ensuring every pound is spent wisely and effectively:
- New powers of search and seizure – so DWP can control investigations into criminal gangs defrauding the taxpayer
- Allowing DWP to recover debts from individuals no longer on benefits and not in PAYE employment who can pay money back but have avoided doing so.
- New requirements for banks and building societies to flag where there is an indication that there may be a breach of eligibility rules for benefits – preventing debts accruing
- All the powers will include strong safeguards to ensure they are only used appropriately and proportionately – including new inspection and reporting mechanisms.
- We have a clearly defined scope and clear limitations for the use of all the powers we are introducing, and our staff will be trained to the highest possible standards.
The measures in this Bill will enable the PSFA to:
- reduce fraud against the public sector by using its expertise to take action on behalf of other departments, against those who attack the public sector.
- better detect and prevent incorrect payments across the public sector through new information gathering and sharing powers.
- Use strong non-criminal sanctions and civil penalties to provide an alternative to criminal prosecution and to deter fraud
- improve the government’s ability to recover public money, through new debt recovery and enforcement powers.
- Use new powers of entry, search and seizure to reduce the burdens on the police in the most serious criminal investigations.
The PSFA will implement a ‘test and learn’ approach when utilising these powers, piloting different approaches and expertise to find the best way to tackle public sector fraud.