DWP's benefits crackdown could lead to Post Office type scandal, campaigners warn

Disability Rights UK has said extending fraud detection to bank accounts could lead to a situation comparable to the Horizon IT debacle.

LONDON, ENGLAND - MARCH 4: Supporters of Disabled People Against Cuts (DPAC) and Winvisible protest against deaths caused by benefit cuts and sanctions at Department For Work and Pensions on March 4, 2024 in London, England. Disabled People Against Cuts called for a national day of protest at the UK Department of Work and Pension calling for no more deaths from benefits cuts. (Photo by Guy Smallman/Getty Images)
Supporters of Disabled People Against Cuts and Winvisible protest against deaths caused by benefit cuts and sanctions at the Department for Work and Pensions earlier this year. (Getty Images)

A disability rights charity has said the government’s benefits crackdown is a “scandal in waiting” akin to the Post Office Horizon IT system debacle.

This week, the government updated its welfare system “fraud plan” with an announcement of £70m funding for “advanced data analytics and new data sources to prevent fraud”.

This will be used in conjunction with the Data Protection and Digital Information Bill, which is set to give the government “better access to vital data held by third parties, like banks” to detect fraud.

Aside from privacy concerns, Disability Rights UK has warned an “unaccountable digital system” is likely to result in claimants’ bank accounts being incorrectly flagged, meaning they could temporarily lose access to vital benefit payments.

The Department for Work and Pensions (DWP) has already been using machine learning – since 2021/22 – "to flag potentially fraudulent claims for universal credit". The National Audit Office said this creates "inherent risk that the algorithms are biased towards selecting claims for review from certain vulnerable people or groups with protected characteristics".

Disability Rights UK has now said extending fraud detection to bank accounts could lead to a situation comparable to the Post Office scandal, where Fujitsu’s faulty Horizon IT system made it appear as though money was missing at its branches. It led to 700 subpostmasters being wrongly prosecuted and handed criminal convictions between 1999 and 2015.

The DWP, which says it has saved £1.3bn from addressing benefit fraud and error in the past year, has rejected this comparison as "completely misleading" and said staff members will "always" make decisions relating to benefits being suspended.

But Mikey Erhardt, Disability Rights UK's policy officer, told Yahoo News UK: “The reason it is akin to the Horizon scandal is the reliance on automation, digital systems, unaccountable technology and algorithms.

Department for Work and Pensions on 24th July 2022 in London, United Kingdom. The Department for Work and Pensions, DWP, is responsible for welfare, pensions and child maintenance policy. As the UKs biggest public service department it administers the State Pension and a range of working age, disability and ill health benefits. (photo by Mike Kemp/In Pictures via Getty Images)
The Department for Work and Pensions is responsible for welfare, pensions and child maintenance policy. (Getty Images)

“When someone gets flagged up on the system, it can take a long time for [a staff member] to monitor it.”

More than 20 million people claim benefits in the UK, including 3.3 million who claim personal independence payment (PIP), which is for people who need help with daily activities or getting around because of a long-term illness or disability.

Erhardt continued: “To scan 20 million bank accounts, which is roughly the scope and reach of this, and you have an error rate of, say, 1%, that’s 200,000 people’s accounts flagged to the Department for Work and Pensions. It doesn’t have the staff power to monitor that.

“There will be lots of people’s accounts flagged in error, meaning it is quite likely their support will stop for that time until staff assess whether or not it is [correct].

“That’s why we’re so worried about it, it’s an unaccountable digital system, like Horizon was. We don’t know how it is developed, we don’t know anything about the system they are using.

“What needs to be made clear is there is no way of making something like this safe… because there will always be errors… which can lead people to incredibly stressful circumstances. The PIP process is already incredibly difficult to go through.”

The MS Society has said 65% of claimants report the application process as having a negative, or very negative, impact on their physical and mental health.

Erhardt added: "Trying to make a group of [claimants] smaller and smaller using an unaccountable digital system to achieve that... it’s a scandal in waiting.

"The best we are seeing is mutterings about safeguarding and guidance but I’m sure when Fujitsu was selling tech to the Post Office, there were points made about how robust the system was going to be.

"But there isn’t a way of making digital surveillance like this safe."

A DWP spokesperson responded: “This is a completely misleading comparison.

“Under these rules, a member of staff will always take any decision related to suspending benefits, and any signals of potential fraud or error will be looked at comprehensively before action is taken.

“We have a duty to treat taxpayer’s money responsibly, which is why we are cracking down on fraud backed up by our £900m fraud plan, to bolster our counter-fraud operations and root out those who steal from the most vulnerable.”

A senior MP this week called for the DWP to “get a grip” amid overpayments to carers which have led to many unwittingly racking up debt.

Work and pensions committee chairman Sir Stephen Timms said the government has “allowed” many unpaid carers to build up debt, having known about the issue for years.

A DWP research report, written in 2021 but only published this week, said 3% of its sample of claimants had received an overpayment of carer’s allowance. With about 1.3 million people receiving the allowance, the Carers Trust said this could equate to tens of thousands of people having been overpaid.

Timms said: “The government has known for years about flaws that have plagued the payments system for carer’s allowance but has just allowed many unpaid carers to unwittingly rack up unmanageable levels of debt.

“The DWP must now move without delay to get a grip of the problem and ensure carers are no longer subjected to the distress that such overpayments can cause.”