The Department for Work and Pensions (DWP) faces a potential shake-up as Andy Burnham, the Labour MP for Makerfield and former Greater Manchester Mayor, signals a tough stance on welfare fraud if he succeeds Sir Keir Starmer as Prime Minister. Recent figures reveal that errors and fraud in welfare payments are costing taxpayers an eye-watering £10 billion each year.
Burnham has openly committed to reducing the welfare bill, stating to The Times, “I am not squeamish about saying that the plan would be to reduce the welfare bill—not at all.” His proposed crackdown coincides with the DWP gaining new powers under the Eligibility Verification Measure, enabling officials to access bank details of claimants to verify eligibility.
The benefits most vulnerable to these tougher measures are Universal Credit, Pension Credit, and Employment and Support Allowance (ESA). Universal Credit alone has a fraud and error rate close to 8 percent, making it a key target for reform.
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Despite the rising welfare bill, enforcement actions against fraudsters have dropped dramatically. Since 2017, the number of claimants facing criminal proceedings has plummeted over 90 percent, from more than 4,400 cases to just 385 last year. Convictions have also fallen by 94 percent over the same timeframe. In 2023 alone, only 461 individuals were convicted of benefits fraud, with just 283 sentenced, compared to nearly 8,000 convictions and 4,000 sentences in 2017.
Fraud has surged, now accounting for 2.2 percent of all welfare payments—over twice the pre-pandemic rate—and is responsible for £6.5 billion in annual losses. Meanwhile, the total welfare bill is predicted to reach a staggering £333 billion in 2024.
Policy analysts and former officials are urging a tougher approach. Shimeon Lee of the TaxPayers’ Alliance criticized ministers for “going soft” on benefit fraud, emphasizing that with the welfare bill swelling and taxpayers under heavy tax burdens, fraudsters need to face harsher penalties.
Sir Iain Duncan Smith, the architect of Universal Credit, agreed, stating, “They should be keeping up with individual prosecutions to send a message to the public that fraudsters will be caught.”
A government spokesperson stressed that “benefit fraud will not be tolerated” and defended the decline in case numbers as part of a more targeted strategy. They highlighted new anti-fraud powers, early fraud prevention, and aggressive debt recovery efforts, noting over 1.1 million claims have been reviewed, leading to nearly 250,000 corrections and a record £3.1 billion recovered in 2024-25.
Although the current fraud and error rate is at its lowest since the pandemic began, officials insist there are plans to reduce it even further—making welfare accountability a top priority moving forward.