The Government has dropped plans to allow officials to inspect the bank accounts of welfare claimants to check for fraud, according to reports. Chancellor John Healey has scrapped the proposal that would have let Department for Work and Pensions (DWP) staff see the savings of people applying for universal credit, the Telegraph newspaper reported.
Previous proposal scrapped
Under universal credit rules, those with more than £16,000 in savings are not eligible to claim unemployment benefits. Rachel Reeves had announced the plans while she was chancellor, saying they would save £200 million a year in benefit fraud.
The Government has replaced the counter-fraud proposals with a new scheme under which banks will carry out checks on welfare claimants' accounts after they have received universal credit, and then report back to ministers, the Telegraph said.
New scheme and potential costs
The newspaper suggested the change could lead to higher levels of fraud going undetected, costing £5m this year and £10m next year. The Telegraph also reports that the Government is planning to allow energy companies to examine their customers' incomes, tax records, and property valuations.
A DWP spokesman said: "This Government is determined to crack down on fraud and error and protect taxpayers' money. The previous Open Banking proposal relied on claimant consent and could not be used in every Universal Credit claim. We are instead introducing the Eligibility Verification Measure (EVM), which will require banks and financial institutions to provide information where accounts meet specified criteria, giving DWP a more consistent way to identify incorrect payments and tackle fraud and error."
Expected savings
The spokesman added: "This is just one part of a comprehensive programme to tackle fraud, error and debt and EVM is expected to save £1.2bn by 2030-31."
