Plans for automated surveillance of millions of bank accounts to catch welfare cheats should be scrapped, campaigners have said, warning the approach risks a repeat of the Post Office Horizon scandal.
The Department for Work and Pensions is seeking new powers to require banks to trawl the accounts of millions of people who receive benefits in an effort to cut the £8bn currently lost annually to welfare fraud and error. The plan is close to being passed into law by parliament and will be “fully automated”, the government said. It is likely to use artificial intelligence to flag activity considered suspicious by the DWP.
The government said no decisions on whether a claimant was committing fraud would be made on the basis of the mass surveillance, but it would examine cases flagged as possible fraud or error “through our business-as-usual processes”.
“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,” a DWP spokesperson said. “We have a duty to treat taxpayer’s money responsibly – which is why we are cracking down on fraud.”
But campaigners for welfare claimants, disabled people, human rights and privacy warned ministers it represents an “unprecedented and disproportionate invasion of the public’s financial privacy, the effect of which will be felt most sharply by the most vulnerable”.
The net would also trawl the private banking data of people related to welfare claimants including partners, parents and landlords. It would save around £360m a year – less than 5% of the total lost to welfare fraud, according to the government’s best estimate.
In a letter to Mel Stride, the work and pensions secretary, 42 organisations, from Disability Rights UK to Big Brother Watch, said: “There are approximately 22.6 million individuals in the welfare system, including those who are disabled, sick, caregivers, job seekers, and pensioners. They should not be treated like criminals by default … The Horizon scandal saw hundreds of people wrongfully prosecuted using data from faulty software. The government must learn from this mistake – not replicate it en masse.”
Hundreds of post office operators were convicted, jailed, plunged into debt and left bankrupt after the faulty Horizon computer system calculated that money was missing from their branches.
Other groups backing the call for the data protection and digital information bill to be revised include the Child Poverty Action Group, the mental health charity Mind and Age UK. It comes amid concern that increasing automation in the welfare system is already leading to some worse outcomes for vulnerable people.
Last year, researchers found 350 low-paid workers every day were raising complaints about errors in welfare top-ups, causing financial hardship and emotional stress. In 2022, the National Audit Office warned a DWP algorithm used to detect fraud in the universal credit system had the potential to “generate biased outcomes” which “could inadvertently obstruct fair access to benefits”.
In 2023, the government extended its use of automated fraud detection.
John Edwards, the information commissioner, has already warned he could not yet assure MPs the latest move was proportionate, and called on the government to be “transparent about the evidence base for introducing this power and its efficacy as a tool for addressing fraud and error”.
Shameem Ahmad, chief executive of the Public Law Project, which joined calls for blanket surveillance to be dropped, said: “As the Horizon scandal shows, reliance on automation carries a high risk of harm. Using automation in a system that impacts the income of over 40% of the UK population is a huge risk … Tackling fraud is legitimate. Punitive mass surveillance is not the way to do it.”
Susannah Copson, legal and policy officer at Big Brother Watch, a campaign group, said a decision to go ahead would be “a hammer blow to privacy in the UK”.
