UK MPs Demand Stronger Safeguards Over DWP’s Bank Account Snooping Powers

UK Members of Parliament have raised serious concerns about the Department for Work and Pensions’ (DWP) newly expanded powers to compel banks and other financial institutions to provide customer account information, warning that public trust is at stake unless far stronger safeguards are put in place. The concerns were articulated by the cross-bench Public Accounts Committee (PAC) in a report scrutinising the DWP’s exercise of its powers under the Public Authorities (Fraud, Error and Recovery) Act 2025, which came into force late last year.

As of December, the legislation gives the DWP authority to issue Eligibility Verification Notices requiring banks to share account holder information to verify benefit entitlement, and in some cases to recover funds directly from accounts — even without a court order. While the government says this is necessary to tackle fraud and recover overpayments, MPs argue that the department has not clearly communicated how these significant powers will be used in a transparent, proportionate way, undermining public confidence.

The PAC is urging the DWP to publish details annually on how often these powers are used and their impact, and to strengthen oversight and risk-mitigation measures — particularly given longstanding problems with fraud, error and debt in the welfare system.

Key Highlights

• Parliamentary scrutiny: UK MPs on the Public Accounts Committee have warned about the DWP’s extensive new bank account powers, urging stronger safeguards.
• New legal powers: Under the Public Authorities (Fraud, Error and Recovery) Act 2025, the DWP can compel banks to share information to verify benefit eligibility and in some cases recover funds directly.
• Public trust concerns: Committee members argue that the department has not fully explained how these powers will be deployed proportionately and transparently.
• Call for reporting: MPs want the DWP to publish annual reports detailing frequency and impact of the powers.
• Legacy issues: The DWP’s accounts have been qualified by auditors for fraud and error for decades, highlighting ongoing systemic problems.

Background: What Are the DWP’s New Bank Account Powers?

The Public Authorities (Fraud, Error and Recovery) Act 2025 introduced expanded anti-fraud powers for the DWP, aimed at tightening enforcement against benefit fraud and error. These include the ability to compel banks and financial institutions to provide specific pieces of account holder information to help verify whether a claimant is entitled to benefits. In some scenarios, the department can even recover money directly from an individual’s bank account without requiring a court order — a move that has alarmed MPs and civil liberties groups alike.

The DWP argues that these powers are necessary in a modernised welfare system to protect taxpayer funds and reduce billions lost to fraud and administrative errors each year. The department asserts that safeguards and oversight mechanisms are built into the legislation and that staff will be trained to use the powers responsibly and proportionately.

However, critics warn that the powers are broad and, in the absence of robust safeguards, could be misused or applied too widely — potentially affecting claimants who are innocent or simply caught up in administrative reviews.

Public Accounts Committee Report: Trust and Transparency at Stake

In its report, the Public Accounts Committee highlighted that while tackling fraud is an important government responsibility, the way in which the DWP’s new bank account checking powers are exercised must be transparent and proportionate to maintain public confidence in the welfare system.

Sir Geoffrey Clifton-Brown, Chair of the PAC, emphasised that:

“Make no mistake, the DWP’s new powers to reach further into citizens’ lives are significant… it is essential that these extensive new powers — including compelling disclosure from banks and direct fund recovery without court orders — have the risk of over-reach mitigated against from the outset.”

The committee also noted the department has a long history of problems with fraud and error, as evidenced by 37 consecutive years of qualified financial accounts — indicating systemic inadequacies in how benefit systems are administered, verified and monitored.

To enhance accountability, MPs on the committee recommended that the DWP should:

• Publish annual reports detailing the frequency and outcomes of exercising bank account powers.
• Strengthen internal controls and oversight to prevent misuse or excessive intrusion.
• Demonstrate how cross-government data sharing and other less intrusive mechanisms are used before resorting to bank account checks.

Concerns from Civil Liberties and Campaign Groups

The expanded bank account powers are controversial, with civil liberties organisations warning they could amount to intrusive surveillance if not carefully constrained. Groups such as Big Brother Watch have argued that compelling banks to inspect or report on customers’ financial details could compromise privacy and civil liberties, especially if algorithms or automated checks play a role in identifying alleged fraud.

Concerns also centre on whether vulnerable claimants — including disabled people, carers, retirees and those on low incomes — could be disproportionately impacted by data sweeps or mistaken identifications, echoing broader debates about the balance between fraud prevention and individual rights.

Context: Fraud, Error, and Public Confidence

Benefit fraud and error remain significant issues for the UK’s welfare system. Government data suggest that large sums are lost annually to incorrect payments — whether through deliberate fraud or administrative error — prompting calls for more effective enforcement tools.

Yet MPs and watchdogs have stressed that public confidence in the welfare system depends on robust protections against misuse of powers and clear accountability mechanisms. With the new powers allowing potentially direct intervention in citizens’ financial accounts, the stakes for trust and institutional legitimacy are high.

Government Position: Fraud Prevention and Safeguards

While critics have raised concerns about surveillance and privacy, the government and DWP officials maintain that the new powers are targeted at tackling significant fraud and reclaiming overpayments that would otherwise strain public finances — with projected savings potentially running into billions over coming years. Officials argue that safeguards are embedded in the legislation, including the involvement of human review and oversight structures designed to ensure proportionate use.

The DWP also points to mechanisms such as training for staff, internal controls and staged implementation designed to encourage proper use of the new tools and limit harm to legitimate claimants.

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