Source · Select Committees · Public Accounts Committee
Recommendation 26
26
The Department has powers that allow it to ask for the information that it needs...
Conclusion
The Department has powers that allow it to ask for the information that it needs when it is doing an individual compliance investigation, but it does not have legal access to the same level of information for the controls it uses to prevent and detect fraud and error. The Department told us it is currently working cross-government with Departments such as Cabinet Office and HMRC to understand whether there are gaps between the powers which it has and the powers which it needs.53 45 Q 24 46 Q 17; ‘Self-reported’ earnings for Universal Credit is income from employment where the Department is not able to receive real time information from HM Revenue and Customs that it can use in its award calculation. Therefore, claimants are required to self-report these earnings. 47 DWP ARAC 2019–20, page 192 48 Q 17 49 Q 30 50 Qq 17, 29 51 Q 29 52 Q17; DWP ARAC 2019–20, page 73 53 Qq 29, 30 Department for Work and Pensions Accounts 2019–20 15 3 Debt Rising debt levels
Government Response
Not Addressed
HM Government
Not Addressed
The government agrees with the Committee’s recommendation. Target implementation date: July 2021 5.2 Latest figures for 2019-20 show that undeclared capital accounted for 22%, equating to £881 million, of all fraud and error loss across Department for Work and Pensions benefits. Despite the department’s best efforts this money is difficult and costly to identify if it is not declared. 5.3 The government Counter Fraud Function has explored options for new legislative powers to increase the effectiveness of counter fraud activity. The department has been closely involved in and supportive of this work. One of the main drivers of this cross-government approach is to consider the case for levelling up fraud capability and legislative powers across departments. 5.4 Levelling up powers, by raising the department’s investigatory powers to the same degree as other departments, and thereby enabling access to bulk tax information held by banks and financial institutions, would support investigations and/or compliance activity relating to capital fraud. 5.5 The department is at the same time developing non-legislative measures to improve counter fraud activity, including finding new ways to work with the banks and possible open banking opportunities, but it is this legislative solution that would potentially have the greatest effect on reducing capital loss. 5.6 The lockdown period has in addition shown that the department’s investigatory powers and penalties processes are reliant on face to face activity. Removing restrictions would help the department to deploy its penalties and investigative powers in a modern and digitalised way. 5.7 In each instance, the department would bring any proposed legislative change to Parliament for scrutiny in the usual way.