The UK government’s Department for Work and Pensions (DWP) is facing growing pressure to clarify the scope of its proposed anti-fraud measures, which would grant officials the power to withdraw funds directly from individuals’ bank accounts.
The Public Authorities (Fraud, Error and Recovery) Bill, currently under parliamentary review, has sparked debate over its potential reach and implementation.
As reported by DevonLive, concerns have been raised about who will be targeted, how enforcement will be carried out, and whether sufficient safeguards exist to prevent misuse of these powers.
Concerns Over Scope and Governance
Experts have urged the government to clearly define the extent of the bill’s authority, particularly regarding who will be affected by the new measures.
Dr Rasha Kassem, a senior lecturer and leader of the Fraud Research Group at Aston University, highlighted the need for specificity, warning that vague language could lead to legal complications.
During a recent parliamentary session, Dr Kassem raised concerns about the lack of clarity in the bill:
“I think this needs to be sorted in the Bill, not afterwards. For example, from a governance perspective, in the bill you say that you can access bank accounts and freeze assets, but whose?”
She questioned whether actions would be taken against individual fraudsters, company directors, or entire organisations, stressing that resolving this issue before the bill becomes law is essential to avoid complications in court.
“This has to be sorted, because you will be faced by another issue, at least in courts, saying who is the controlling mind in the organisation. The organisation has a mind of its own legally, and therefore cannot be treated in the same way as when you deal directly with individuals. If that is sorted, there will hopefully be a higher probability of recovery and fewer loopholes in the bill.”
This distinction is crucial, as treating organisations as singular legal entities may complicate efforts to recover fraudulent funds, leading to legal loopholes that could undermine the effectiveness of the proposed measures.
Expanding the Reach Beyond the DWP
The bill’s provisions are not limited to the DWP. Alex Rothwell, chief executive of the NHS Counter Fraud Authority, stated that his organisation also intends to use these powers to recover funds lost to fraud.
Rothwell pointed out that the legislation would be particularly useful for cases involving relatively low-value fraud, explaining:
“When it comes to pursuing criminal justice outcomes in relatively low-value cases – perhaps individuals who have taken £5,000 or £10,000, who have been exited through human resources processes or who have simply left the organisation – the bill gives us an incredible opportunity to recover more funds, and I think we would use it extensively.”
In practice, the bill would enable DWP officials not only to extract a lump sum from offenders’ bank accounts but also to arrange regular deductions to reclaim stolen funds over time.
This raises further concerns about how these powers will be applied and monitored, particularly if multiple public institutions, including the DWP, are granted the same enforcement capabilities.
Addressing Fraud Beyond Financial Motives
Beyond financial fraud, Dr Kassem also warned that not all fraudulent activity is driven by financial gain. She pointed to the risk of insider fraud, where employees within public institutions exploit their positions to commit fraud.
In such cases, she noted, disgruntled employees may act out of personal motives rather than for direct financial benefit.
“If you consider insider fraud, fraud committed by insiders, people working for the public authorities, which is one of the most common threats not just in the public sector, but across other sectors. A disgruntled employee can be as dangerous as someone with a financial motive.”
This insight highlights the importance of robust internal controls and oversight within public institutions, beyond the bill’s focus on external fraud.
