The Department for Work and Pensions (DWP) has admitted they’ll only seek to prosecute big, organised fraud cases, due to the rising amount of fraud and a huge court backlog. The news comes amid a huge rise in fraudulent claims, rising from £2.1 billion in 2019 to £7.4 billion by 2024.
An additional £1.6 billion is incorrectly paid out due to what are thought to be genuine errors by claimants. This surge in fraud has been widely attributed to the suspension of claim verifications during the Covid-19 pandemic, a measure intended to get financial support to those in urgent need as quickly as possible.
Unfortunately, this led to an opportunity for fraudsters to exploit the system. Despite the rise, officials believe their strategies to quash fraud and bring it down to pre-pandemic levels will work, although they admit this might not happen until 2030.
Neil Couling, Director General for Fraud, Disability and Health at the DWP, said: “Fraud is such a big volume that you can’t prosecute your way out of this problem. So we are reserving our prosecutions for the most egregious, the big, organised cases.”
He went on to explain the alternative approach for smaller-scale fraud, stating: “For individualised frauds, there is a series of administrative penalties we would apply rather than go to the courts, because the courts themselves are very busy with their own backlogs of prosecutions that they are trying to work through.”
Recent statistics have shown there’s a bottleneck of 73,000 cases for a variety of crimes awaiting trial in crown courts. Sir Pete Schofield, Permanent Secretary of the Department, highlighted the surge in fraud and error during Covid-19 to MPs, pointing out the rapid increase in Universal Credit applications. The department saw 2.4 million applications in three months.
Sir Pete spoke of the department’s difficult choices: “There were some days where we had 100,000 people claiming in one day and we took a decision that it was a priority for the department to pay people and get people into payment which we were very successful at doing, but the result of that was that we saw fraud and error come into the system.”
The Government is looking to recruit 3,000 additional enforcement staff to claw back roughly £2.5 billion by 2029-30. Sir Pete’s remarks followed a briefing that showed a climb in the percentage of UK residents who confess to fraudulent activities against businesses or the public sector, from 8% to 12% over two years.
Addressing MPs, Sir Pete expressed worry about the increase: “We are fighting against these headwinds.” Mr Couling agreed with the sentiment, seeing it as a broader issue: “This looks like a societal challenge.”
Meanwhile, Debbie Abrahams, chair of the Commons Work and Pensions Committee, advised caution by stating: “We need to be very, very careful before we make statements about ‘this is a societal trend’. It’s a very serious accusation to put on the public that we are becoming increasingly fraudulent.”
MPs are gearing up for a debate on Monday (February 3) over new legislation that could impose driving licence bans for up to two years on those convicted of benefit fraud. The Public Authorities (Fraud, Error and Recovery) Bill also seeks to boost the capabilities of the Department for Work and Pensions (DWP) serious organised crime team, giving them authority to obtain search warrants from courts.
This would empower these investigators to enter homes alongside the police and seize equipment such as computers and smartphones, potentially helping them build cases against benefit fraud suspects.