The government will invest £510 million into tackling benefit fraud, after a record £8.4 billion of public funds were lost to Universal Credit overpayments and fraudsters last year.
The investment will start in April at the beginning of the 2022-23 tax year and will be used to assemble a team of roughly 2,000 fraud investigators.
The Covid-19 pandemic provided a significant opportunity for fraudsters to exploit holes in the system. The number of Universal Credit applicants doubled from around three million in 2019 to six million in 2020, leading to some of the rules around claims to be relaxed so that processing times were reduced, and leaving the system prone to criminal activity.
The saga has also raised questions over Universal Credit and how it has been regulated even dating back to before the pandemic. Since it was introduced, the levels of benefit funds lost to fraud have risen to as high as 12.8 per cent last year, compared to 2.7 per cent in 2016.
Across all forms of benefits, fraud levels stood at three per cent of all funds allocated last year.
With the new government investment, which will be allocated over three years, it will enable Work and Pensions staff to carry out more thorough checks on benefit claims, including fact-checking addresses and ensuring bank details provided are legitimate and match accounts belonging to the claimant.
According to the Department for Work and Pensions, over 900,000 benefit claims made in 2020 are being retrospectively checked for fraudulent activity already, while a further £1.9 billion in benefits were prevented from being fraudulently claimed thanks to the work of its cybersecurity personnel.
Work and Pensions Secretary, Therese Coffey, said that her department would make “every effort to recover” public funds lost to fraud with the resources at its disposal.
Coffey also defended the government’s decision to relax security regulations for Universal Credit during the height of the health crisis, arguing that it was imperative to give people access to support when it was needed most.
She added: “Some people took advantage of that, and that's why we are going after them now. We can now increase the pace at which we do that [thanks to this investment], but the main focus is to prevent fraudulent claims in the first place.”
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