Preparing for new bank checks: what social services need to do

26 October 2017

​People without current immigration status likely to have accounts closed or frozen

Since December 2014, UK banks and building societies have been prohibited from​ allowing people without any current immigration permission from opening new current accounts. This is one measure of the UK's immigration policy to create a compliant environment (formerly referred to as the 'hostile environment'), which aims to encourage people without any immigration permission to leave the UK voluntarily, having disrupted their ability to self-support. 

As of 30 October 2017, these measures will be extended so that banks and building societies will be required to check the details of all current account holders against the list of disqualified persons held by Cifas, and must notify the Home Office if a person is recorded on that list as having no immigration permission and provide details of their accounts, including regular payments  into accounts of over £200.

If the person does not have leave to remain in the UK then this will result in one of the following two outcomes:

  • The Home Office may apply to the courts for a freezing order for the current account and any other accounts held by the person, which if granted will mean they can no longer access their funds, although limited access may be permitted for reasonable living and legal expenses.
  • If a freezing order is not applied for or granted then the Home Office must notify the bank and require it to close all accounts that the person holds, including joint accounts. The bank will return the remaining funds to the account holder.
The government's​ draft code of practice, Freezing Orders (Bank Accounts Measures)​, states that the Home Office will not usually consider applying for a freezing order if the level of funds in a person’s combined bank accounts is less than £1,000, unless the account holder presents a high risk of harm or criminality, or has a history of immigration offending including non-compliance with removal. 

​From 1 January 2018 banks will be required to undertake these checks on a quarterly basis. Details of the process banks must follow are set out in the code of practice and schedule 7 of the Immigration Act 2016​.

Impact on social services

This measure is expected to disrupt the ability of people, who do not have any current immigration permission, to self-support in the UK. The draft code or practice does not make any mention of what action the Home Office might take when they are notified of a person who does not have any current immigration permission, beyond freezing or instructing a bank to close an account. In October 2016, the Chief Inspector of Immigration found in his report on the hostile environment measures relating to bank accounts and driving licences, that the Home Office had no method of evaluating the impact of specific hostile environment measures on voluntary returns, enforced removals, and on the ‘pull factor’ for individuals considering settling illegally in the UK. Where people's living arrangements are disrupted, this may lead to increasing demand for social services' support that must be provided to safeguard the welfare of children and vulnerable adults who face destitution and have a legal or practical barrier preventing them from returning to their country of origin. 
 
The removal of bank accounts from people without current immigration status is also likely to impact on those who are already receiving financial support from social services. It is unlikely that banks will start to undertake checks until early next year, so local authorities have some time to prepare for this. 

As the Home Office will only apply for accounts with a balance of under £1000 to be frozen in limited circumstances, it is most likely that people receiving social services' support  will not have this level of funds and so will have their account closed and the balance returned to them. However, it is possible that a person could have over £1000 in their account on a temporary basis, for example, in order to pay for an immigration application (which costs £1473), and so need to be aware that in such instances their account could suddenly be frozen. 

Where social services' provide financial support directly into bank accounts, this system may need reviewing and potential people who may be affected should be identified and notified about what to do to obtain their support if their account is closed or frozen. Local authorities using NRPF Connect must ensure full details of any financial support that is being provided is added to the database, in order to demonstrate why ​a person is receiving regular payments into their account.

Local authority practitioners also need to be aware of how this measure could affect people when they are assessing need and establishing a person or parent's financial circumstances. Going forward, fewer people who do not have current immigration permission will have access to a bank account, so cannot be expected to provide bank statements. 

Local authority practitioners using NRPF Connect are requested to inform us about any problems they encounter due to this new measures so we can monitor whether this is having an impact on NRPF service provision.