DWP and its new sweeping powers - petition

The Government introduced the third party data gathering measure as an amendment to the Data Protection and Digital Information (DPDI) (No.2) Bill in November 2023. The DPDI Bill continues its passage through Parliament and there will be further opportunity for parliamentary scrutiny. The measure was announced in May 2022 as part of the Department’s fraud plan, “Fighting Fraud in the Welfare System” (www.gov.uk/government/publications/fighting-fraud-in-the-welfare-system). This plan outlined new powers DWP wanted to legislate for to tackle the fraud and error found in the welfare system.

The current powers DWP have to ensure benefit correctness are limited and leave the Department unable to address certain fraud or error challenges. We must modernise and strengthen DWPs legislative framework to give those fighting fraud the tools they need to stand up to future challenges and minimise the impact of genuine mistakes that can lead to debt.

The third party data gathering measure enables DWP to request data from third parties so we can more proactively detect fraud and error in the welfare system. Data is a powerful tool to understand whether someone is entitled to benefit. We already use several data streams to help verify a person's claim or entitlement to benefit which has helped significantly reduce other types of fraud and error. This measure will provide better access to data to establish whether someone is entitled to benefit, making it harder for fraudsters to steal from the taxpayer. The measure will also address error by ensuring claimants are in receipt of the correct amount of benefit that they are entitled, preventing people from inadvertently getting into debt.

There are a number of misconceptions about this measure, namely, it does not grant DWP access to any bank accounts and it does not allow DWP to see how claimants are spending their money.

What this measure will do is require third parties to look within their own data and provide relevant information to DWP that may signal where claimants do not meet the eligibility criteria for the benefit they are receiving. DWP will only receive data on accounts matching criteria DWP prescribe, these will be linked to eligibility criteria for benefits that, if met, may require further consideration to ensure a claim is correct through our business-as-usual processes . For instance, some benefits have rules regarding how much money a claimant can have in a bank account and remain eligible for that benefit. This is called the capital limit and claimants breaching the capital limit is one of the largest causes of fraud and error in the welfare system, accounting for almost £900m in overpayments just in Universal Credit in 2022/2023.

The measure avoids DWP having to share any personal data with third parties in order to obtain the information it needs and only the minimum amount of information will be requested on accounts that match the criteria provided so that DWP can identify the claimant in their own database. DWP will only request information where there is a link between DWP, the data holder and the recipient of payment. Where there is no signal of a potential overpayment no claimant information will be shared with DWP. This means the vast majority of claimants will be unaffected by this measure.

DWP will protect the data it receives. DWP continuously handles large volumes of data and has robust processes in place. The delivery of this measure will be undertaken in collaboration with third parties, including the banking industry, so it is as secure as possible and we have already established a working group with industry to oversee this work. In addition, DWP will consult on a code of practice before providing this to Parliament with accompanying regulations to provide more detail on how this measure will be implemented. Finally, DWP have committed to adopting a “test and learn” approach from 2025 to ensure they create a system that is effective, simple and secure that can transfer, receive and store data safely.

Fraud is a growing problem across the economy, accounting for over 40% of all crime. This problem exists in the welfare system too. Although down by 10% in 2022-23, £8.3bn was overpaid in fraud and error last year in the benefit system and is right we do all we can to reduce this.

The Government has a responsibility to ensure taxpayers money is spent responsibly and therefore should be able to utilise information to discharge that duty. This measure will bring estimated saving to the exchequer of up to £600m by 2028/29. The public support the government’s approach, in a recent public survey, 64% of respondents thought this measure was an acceptable way for DWP to tackle fraud and error in the welfare system.

The measure strikes the right balance between protecting the taxpayer, taking proportionate action, respecting the privacy of claimants and ensuring personal data is always protected.

Department for Work and Pensions