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New Public Authorities (Fraud, Error & Recovery) Bill

The UK government recently announced via a press release what they term the "biggest fraud crackdown in a generation."

The target of this operation is welfare fraudsters who - according to the press release - cheated the taxpayer out of £7 billion in 2024. To many, this may sound like the usual "blame benefit cheats" while ignoring tax avoidance, malicious company management or simple mis-management of government resources. However, this does actually appear to be targeting the criminally-minded element, not those who find themselves between a rock and a hard-place.

To summarise the government's press release:

  • benefit cheats will have their driving licenses taken away
  • a new Public Authorities bill will target criminals over tax payers
  • the introduction of the bill is targeted to save £1.5 billion alone
  • ability to target bank accounts, not just PAYE

The wording actually states that repeated offenders who fail to pay back what is owed could be banned from driving and be disqualified for up-to two years. Furthermore, this is if they refuse all opportunities to repay the debts.

From reading this, it seems unlikely this will make a huge difference as they bar would be set very high for the disqualification to take place. Additionally, if someone was able to demonstrate their need for a driving license in order to earn money, it is unlikely the courts would take it away.

It will be up to the DWP (Department for Work and Pensions) to apply to court. All the accused would have to do it demonstrate they have attempted or offered payment. However, the courts may decide that there is a reasonable amount that would need to be offered depending upon the debt size. So, they may not look kindly on an offer of £10 per week on a debt exceeding £1000. That amount is important, since debts must be £1000 at least for this process to be invoked. It is not clear if that amount can include fees and interest.

This is an important fact for those on low incomes where they find themselves accused of owing money due to overpayment. This can happen when you start a new job and the Universal Credit is not adjusted correctly by the DWP. So long as the amount due is less than £1000, this process should be something to worry about. However, since the DWP can already seek an attachment of earnings. This is unlikely to be used to target low earners who find themselves owing the DWP.

This is aimed at those who defraud on a larger scale. Often not having a PAYE income that could be targeted by existing methods of enforcement. Think of the guy (usually, yes) driving around in a German saloon, while apparently having no income.

This is targeted at serial fraudsters, criminals and cheats. The question is, will it make a difference?

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Location: United Kingdom

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