Public Authorities (Fraud, Error and Recovery) Bill

Written evidence submitted by Turn2us (PAB03)

1. Executive Summary

· This legislation and the surrounding narrative could lead to greater financial insecurity by discouraging individuals from claiming the financial support they are entitled to.

· Key measures in the bill, such as stricter penalties, enhanced information gathering, and expanded debt recovery powers, have the potential to cause fear, mistrust and deepen stigma amongst people who rely on social security and those living on a low income who may need to access it.

· We are concerned that the narrative surrounding this bill is not proportionate to the level of fraud within the system and that there is a clear distinction between fraud and error.

2. About Turn2us

2.1 Turn2us is a national charity offering practical information and support to people facing financial insecurity. We work alongside people who know what it’s like not to have enough money to live on, and develop our tools, grants and information with them. In 2023, over 2.7 million calculations were completed using the Turn2us Benefits Calculator and we provided over £3.1 million in grants to people in financial need, reaching almost 3,500 people. In July 2024, we launched the Turn2us PIP Helper, an accessible online information tool that people with disabilities, or long-term physical or mental health conditions, can use to confidently start their claim for Personal Independence Payment. Our Grants Search has over 1400 grants available to support individuals looking for financial help. Through our Local Programmes in Middlesbrough, Manchester and Barking and Dagenham, we understand the importance of building trust and sharing power within the community to tackle poverty and improve people’s financial security.

3. Key Concerns

3.1 Stigma

3.2 At Turn2us, we are particularly concerned that the bill’s narrative and lack of distinction between fraud and error could deepen stigma. Stigma within the UK social security system refers to the negative perceptions and attitudes that society holds towards individuals who receive welfare benefits. Stigma can also manifest in policies and procedures within the welfare system, such as stringent eligibility criteria, intrusive assessments, administrative complexity, and punitive sanctions, which reinforce negative stereotypes and further marginalise recipients. Stigma can arise from numerous factors, including political rhetoric, which in turn influence the design of the social security system.

3.3 Narratives

3.4 Negative narratives (collections of stories which together convey a common worldview or meaning) relating to recipients of social security can reinforce stigma and damage people’s self-esteem, sense of identity and mental health – they can perpetuate a vicious cycle, where faith in institutions or services is eroded, and people are reluctant to seek help. Negative perceptions of the social security system, combined with complexity in accessing support can deter eligible people from engaging with the benefits system. We are concerned that the rhetoric surrounding this legislation may deter people from claiming the support they are entitled to.

4. False narrative

4.1 The bill’s focus and emphasis on widespread fraud reinforces a harmful narrative suggesting that a majority of social security claimants engage in fraudulent behaviour. For example, clause 74 and Schedule 3 of the bill expands the government's eligibility verification powers by the DWP to investigate individuals’ entitlement to benefits more extensively. Financial institutions are also granted permission to check accounts for suspected fraud, reinforcing a presumption that social security claimants could be acting fraudulently.

4.2 Additionally, DWP statistics show that overpayments due to fraud only accounted for 2.8 percent (£7.4 Billion) [1] of the benefit expenditure. The level of fraud appears even less significant when compared it with tax fraud. [2] The most recent figures shared by HMRC from 2024, estimate the tax gap to be at £39.8 billion [3] , considerably larger than figures from the DWP. Whilst the low level of fraud within the social security system amounts to significant revenue and the government must work to reduce it, it is imperative that the proposals are proportionate. In their current form the proposals are framed to target the minority of criminal behaviour but risks subjecting claimants to harsh measures. The bill may also reinforce concerns that welfare systems are increasingly susceptible to counterproductive levels of suspicion [4] . People we work with have told us they feel the DWP treats them with suspicion and are wary of any interactions with them.

4.3 Therefore, some of the proposed penalties in this bill such as the ability to recover payments from individual’s bank accounts, suspend individuals from driving and the proposed powers of entry, search and seizure are not proportionate and have the potential to overstate the level of fraud within the system, increasing levels of fear and further stigmatising claimants. The government must carefully manage the narrative surrounding this bill by being transparent about the real levels of fraud to ensure the legislation and surrounding narrative does not discourage people from claiming support or disproportionately impact those who rely on the system.

5. Lack of distinction between fraud and error

5.1 We are concerned that the lack of clarity and distinction between intentional fraud and accidental error in this bill may further deepen stigma. For example, Schedule 5 grants the government authority to make direct deductions from individuals' bank accounts to recover overpaid amounts resulting from both fraud and error. It does not adequately distinguish between fraud and error and risks conflating the two. This is concerning as it may directly push social security claimants further into financial insecurity as sudden deductions could leave them unable to meet essential costs .

5.2 E rrors in the system can often stem from the inherent complexity of the social security system. In 2024, a YouGov survey for Turn2us found that 77% of respondents believe it would be challenging to claim benefits if their circumstances changed . [5] Due to the complexity of the system such as work allowances in Universal Credit and Carers Allowance, being the most prominent example s overpayments can often occur. The B ill lacks clarity in distinguishing between systematic fraud or payments that may be in error and judged as fraud .

5.3 The people we work with the majority of whom have some experience of using the social security system, understand the need to tackle fraud, however one partner stated:

"Fraud...It does exist, unfortunately, but everyone's been lumped in using that language. Everyone's been lumped into b eing stained with the same brush." – Joy , Coproduction Partner

As a result, we believe there needs to be a much clearer distinction between the government’s powers to recover overpayments caused by fraudulent criminal activity and those arising from error .

5.4 At Turn2us we believe this bill should have provision to clearly distinguish between fraud and error particular ly DWP error. In F inancial Y ear 20 24, official error had a total cost of £800 Million [6] . Ou r work with people who have experienced financial insecurity shows the impact of these overpayments. One of our lived experience partners was overpaid by the DWP whilst on Universal Credit. They received unexpected letters from the DWP saying t he y owed them money due to miscalculations that led to overpayments in Universal Credit. Despite many conversations with the DWP t he y w ere provided with little clarity on the overpayment and debt owed, adding to the feeling of confusion and helplessness. The DWP then automatically deducted an amount from his benefits. They could n o t afford this reduction in payments and tried to explain this to the DWP and see if they could pay it back in instalments, which was refused . This reduction left him and his partner with a l ot of anxiety and completely eroded their trust in the system.

"We’ve ended up with a lot of anxiety around it because we sort of sit there waiting...They automatically deducted an amount from our benefits monthly when we tried to argue that it wasn't our fault due to a miscommunication on their part, they said it was irrelevant. We tried to ask if we could we pay a set amount a month, but they were unwilling to compromise on repayment amounts. It was awful, particularly if you didn't know it was coming, because all that would happen is you'd have an email pinging up on your phone saying you've got a message in your journal, and you'd have a look at it, and it would be something about miscalculation, and then it would be, you owe us this amount of money, which is, it was always terrifying."

"I have no faith in the system to be honest. I don't have a lot of faith in them ever getting it right.’’- Matt, Coproduction Partner

5.5 Having a clearer distinction between fraud and error in this bill would establish clearer parameters and would go some way to create a more reasonable narrative around this bill. W ithout clear distinction between f raud and e rror , there is a risk of penalising individuals unable to navigate the system effectively and further entrench the fear of making a mistake.

6 Summary of Key Points

· In scrutiny of this B ill , p arliamen t must take an active role in ensuring that the government and media narratives surrounding this bill will not contribute to stigma.

· The undue emphasis on fraud can create a misleading narrative that negatively impacts public perception and creates fear amongst those reliant on the social security system.

· The Bill must also ensure a clear distinction between intentional fraud and accidental errors within the system. Conflating the two risks unfairly penalising individuals who have been subject to error .

· Errors made by the DWP must be more clearly acknowledged in this bill to reinforce the distinction between error and intentional fraud . This means that penalties for error should be recognising the complexity of the system.

February 2025