Public Authorities (Fraud, Error and Recovery) Bill

Andrew Western Excerpts

Wednesday 5th November 2025 Commons Chamber

[The Parliamentary Under-Secretary of State for Work and Pensions (Andrew Western)]

I beg to move, That this House disagrees with Lords amendment 1.

[Madam Deputy Speaker (Judith Cummins)]

With this it will be convenient to discuss:

Lords amendment 1, and Government amendment (a) and (b) in lieu.

Lords amendment 75, and Government amendment (a).

Lords amendments 30 and 31, Government motions to disagree, and Government amendments (a) to (c) in lieu.

Lords amendment 43, and Government motion to disagree.

Lords amendment 84, Government motion to disagree, and Government amendments (a) and (b) in lieu.

Lords amendment 97, Government motion to disagree, and Government amendments (a) to (f) in lieu.

Lords amendments 2 to 29, 32 to 42, 44 to 74, 76 to 83, 85 to 96, and 98 to 121.

[Andrew Western]

The Public Authorities (Fraud, Error and Recovery) Bill delivers on this Government’s manifesto commitment to safeguard public money and ensure that every single pound is wisely spent. Fraud against the public sector is not a victimless crime. It takes money away from vital public services, eroding trust and harming innocent people. The Bill introduces new powers to enable the Public Sector Fraud Authority to investigate and deal with public sector fraud outside of the tax and social security system, using its expertise to act on behalf of other parts of Government.

The Bill also contains new powers for the Department for Work and Pensions to tackle fraud and error within the social security system, providing much-needed modernisation for our defences. At the same time, it includes significant safeguards, including new independent oversight to ensure the proportionate and effective use of the powers. As we now reach the final stages of the Bill, I am sure colleagues across the House will agree that it needs to receive Royal Assent as quickly as possible, so that we can realise the delivery of the estimated £1.5 billion of benefits by 2029-30.

[Jim Shannon (Strangford) (DUP)]

I thank the Minister for bringing the Bill forward and for all the hard work that the Government have done in relation to this. There is one thing that always concerns me. In my office, nearly every week I have people come to me who have inadvertently made mistakes. They perhaps do not understand how the online system works or how the paperwork has to be filled in, and sometimes they have ticked the wrong box and found themselves in a difficult position. This does not take away from those who deliberately defraud and try to get money that they should not be receiving. How can we be absolutely sure that those who make inadvertent mistakes will not find themselves in a difficult position alongside those who have done wrong? How can we ensure that they get the sympathy they need? I know that the Minister will be of the same opinion as me that we must make sure this is done right.

[Andrew Western]

The hon. Gentleman will be aware that it is enshrined elsewhere in legislation that claimant error is recoverable as part of universal credit. I can also assure him that, as part of this Bill, the eligibility verification measure will enable us to identify errors that are legitimate as well as illegitimate—deliberate, shall we say—in order to minimise the level of debt for individuals who have, I accept, done this accidentally and ensure that they are caught earlier. Any overpayments will be smaller as a direct consequence. One advantage of the Bill is that it can minimise suffering for people who have inadvertently made a mistake.

Before I turn to the Lords amendments, I thank my noble Friends Baroness Anderson and Baroness Sherlock who expertly guided the Bill through the other place. I share their appreciation for all the peers who contributed to its detailed scrutiny and their invaluable insights that have helped the Government to strengthen the Bill.

The Government made important changes to the Bill in the other place, and I now ask this House to endorse those Government amendments. They were made to ensure that the Bill delivers its aims and to clarify the operation of the powers, as well as to ensure that the safeguards this Government have introduced are strong and effective. More procedural yet still important amendments have been made to part 2 to reflect the Scottish Government’s position on how the powers should be applied to devolved benefits. Across the Bill, we have made amendments that are more technical in nature, including to reflect the recent Data (Use and Access) Act 2025 and to ensure flexibility in the commencement of certain provisions of the Bill across the different nations of the United Kingdom.

In the interests of time, I will focus my update to the House on the most substantial and pertinent areas, on which there has been extensive engagement with external stakeholders and points have been made by peers in the other place. First, the Government tabled a group of amendments to part 1 to enable the Public Sector Fraud Authority to be merged with another statutory body, rather than necessarily being set up as a stand-alone statutory body, although the power to do so remains. That builds flexibility into the legislation, enabling the PSFA to achieve the aim of separation between investigators and Ministers in future, while avoiding the need to set up an entirely new statutory body if it is not considered proportionate to do so.

Linked to that, I would like to speak to a minor and technical amendment that I propose to make to Lords amendment 75 to schedule 2. Amendment (a) simply ensures that authorised investigators are captured within the regulation-making power set out in schedule 2 if or when the powers conferred under part 1 of the Bill are transferred to another public authority, or if the PSFA is set up as its own statutory body. It does not change the use of any powers laid out in the Bill.

The Government also amended parts 1 and 2 to ensure that the Government must disclose relevant information to the PSFA independent reviewer and the eligibility verification notice independent reviewer. Effective oversight is a critical aspect of this Government’s approach. These amendments do not represent a change in that approach; indeed, they further strengthen the commitments this Government have made to support open and transparent use of the powers. I will return to the point about oversight later in relation to Lords amendment 43.

The Government made several amendments to the debt provisions across parts 1 and 2. Those are a consequence of the extensive engagement by the PSFA and the Department for Work and Pensions with the financial sector, and they clarify important aspects of the operation of the powers, including in situations where a liable person might have a legal deputy managing their affairs. They also strengthen the rights of debtors by ensuring that a deduction order cannot be in suspension indefinitely, and that after a two-year period in suspension, it will not be resurrected. The Government have also responded to the continued confusion that seems to have arisen on the DWP debt recovery provisions in part 2 and who those powers apply to.

The Government have made amendments explicitly stating that a direct deduction order, as outlined in schedule 5, and a disqualification from driving order, as outlined in schedule 6, cannot be made where the person is entitled to and in receipt of a benefit from the DWP. That clarifies the existing intent that these powers are only for use with those who are not on benefits where the money cannot be recovered from a payslip and where the person can afford to pay and is refusing to do so. I remind the House that this power addresses an important point of fairness. It cannot be right that those who can pay money back can avoid doing so, and the amendments underline that point.

The Government also acted to strengthen the legislative safeguards around the use of the eligibility verification measure. I remind the House that that measure simply enables the DWP to ask financial institutions for limited data that will help the Department to identify incorrect payments and verify eligibility for specific benefits. The amendments made by the Government in the other place will introduce an explicit, necessary and proportionate test before an eligibility notice can be issued, and clarify the purpose for which an eligibility notice can be issued to only assisting in identifying incorrect payments. That puts the existing policy intent in the Bill. Again, I will return to the eligibility verification measure when I address Lords amendment 84.

I turn to the other amendments made in the other place. We welcome the challenge and scrutiny provided by peers’ contributions, but we cannot accept changes that risk undermining the powers. The Government’s position will continue to reflect that, including in our amendments in lieu. First, Lords amendment 1 would give the Minister for the Cabinet Office the power to initiate an investigation when they consider it necessary in the public interest. [Interruption.] Just so that he is sure of that power, the Parliamentary Secretary, Cabinet Office, my hon. Friend the Member for Makerfield (Josh Simons), has joined me on the Front Bench.

We are proposing technical changes to Lords amendment 1 through amendments (a) and (b) in lieu. Those changes will give the Minister for the Cabinet Office the power to initiate an investigation when they consider it necessary in the public interest. The other place asked us to go further than the original drafting of the Bill allowed, and our amendments show that we have listened. The Government believe that it will almost never be necessary for the Minister to exercise that new power because of the collaborative approach in the normal working of government, but it will be available if there is a genuine need.

Our amendments in lieu also make consequential changes to clause 2 to preserve the intention that the PSFA should not take on matters assigned to the Secretary of State with responsibility for social security or His Majesty’s Revenue and Customs. The reason for that is that the DWP and HMRC already have well-established functions and frameworks to tackle social security and tax fraud. Of course, it goes without saying that both Departments may still collaborate with the PSFA if a fraud crosses many departmental boundaries.

I turn now to Lords amendments 30 and 31. The Government wholeheartedly agree that the measures in part 1 of the Bill are powerful and must be used with care. We agree that staff must be appropriately trained before they are able to use these powers, and that robust oversight—both internal and external—is essential. Our amendments (a), (b) and (c) in lieu mandate statutory guidance and a new reporting requirement, and set internal record requirements. The amendments in lieu ensure strong ministerial and parliamentary oversight of the powers, as was called for by the other House, without involving Ministers unnecessarily in operational decisions.

The statutory guidance will detail how the Minister will exercise the function of investigating suspected fraud against public authorities. It will outline structures of internal oversight, the delegation of powers, standards for the training and appointment of all authorised officers and investigators, and the PSFA’s collaboration with an independent reviewer. New reports will be prepared following the end of each financial year and laid in Parliament by the Minister, stating how many times the investigation and enforcement powers in part 1 have been used. There is now a requirement in the Bill for the PSFA to keep internal records of the use of those powers, available for scrutiny by an independent reviewer. Together, those measures ensure that Ministers are accountable for the use of the powers, and show how they are delegated. In places, they build on processes that would already have been in place, but we have put them in the Bill.

Let me move on to part 2 of the Bill, focusing first on Lords amendment 84 on the treatment of information obtained under an eligibility verification notice. Although I understand the intent of the other place, I cannot accept the amendment as drafted, and I urge Members instead to back Government amendments (a) and (b) in lieu.

Lords amendment 84 risks compromising the weight that the DWP may be able to attribute to information obtained through an eligibility verification notice. The Government have been clear that EVM information on its own has no tag of suspicion attached, and that the DWP must look within its own systems first and check for any inconsistency before taking further action. However, depending on the information held, EVM information may form an important part of any further action. We must not compromise that. The amendment also risks legislating for a person’s state of mind—in this case, that of a DWP-authorised officer. That is something that we should avoid where we can. It is far better to focus legislation on the actions that must or must not take place following receipt of EVM information.

The second part of the amendment, relating to the seniority of staff who must review EVM information, risks undermining the existing public law principle that staff at DWP take decisions on the Secretary of State’s behalf. There is also uncertainty about what would constitute a suitably senior person. In any case, the Secretary of State must be satisfied that officials are suitably trained and experienced to take decisions on their behalf.

Government amendments (a) and (b) in lieu of Lords amendment 84 seek to address those risks and build on the amendments that the Government tabled on Report in the Lords. They more accurately reflect the policy intent and focus on the actions that DWP staff must take following receipt of EVM information. The amendments in lieu clarify that where the DWP has received EVM information, it must also have regard to all other relevant information that it holds before taking further actions.

First, the amendments in lieu require an authorised officer to consider all information held that is relevant to the question of whether to issue an information notice, as well as the relevant EVM information, before issuing the notice under the Department’s investigatory powers. Secondly, they require a DWP agent to consider all information held that is relevant to the question of whether to suspend a payment, as well as the relevant EVM information, before suspending that payment. Finally, they require a DWP agent to consider all information held that is relevant to the question of whether to change an earlier benefit decision, as well as the relevant EVM information, before making that change.

I believe that our amendments succeed in offering the necessary reassurances about the way individuals within the DWP will take decisions once EVM information is received by the DWP—namely that no decisions will be made using EVM information in isolation—and I therefore urge hon. Members to back them.

[Kirsty Blackman (Aberdeen North) (SNP)]

I am still not exactly clear why the Minister disagrees with Lords amendment 84. I understand that he is saying that DWP agents will look at EVM information and everything else, but what happens in circumstances when they have only EVM and not much else by way of information? Is he unable to agree with Lords amendment 84 because if the DWP has only EVM information, he wants decisions to be taken based only on that and not on anything else?

[Andrew Western]

There are a couple of issues with Lords amendment 84 as drafted. It could minimise clear evidence from an EVN that has been returned. The point about what information DWP agents would have to consider is pertinent, because it may answer a question about why, for example, someone has more than £100,000 in a bank account. It is about considering all information, not about having no further information on which to act. I am probably not explaining that tremendously well, but I am effectively saying that an EVN could provide information that is sufficient for us to launch a fraud investigation, but we would want to consider all relevant information, including that EVN, to see whether that information is valid or should be discounted for any reason of which we are aware.

I cannot accept Lords amendment 43, which would add three additional requirements to the role that the EVN independent reviewer would be required to undertake. On proposed new paragraph (d) in Lords amendment 43, regarding costs incurred by business, the Government are committed to keeping costs associated with the measure proportionate and to a minimum. Officials have discussed this part of the amendment with the finance industry, which acknowledges that it may place a significant burden on financial institutions if they are asked to report on costs every year. That is something we clearly would want to avoid.

--- Later in debate ---

[Madam Deputy Speaker (Judith Cummins)]

With the leave of the House, I call the Minister.

[Andrew Western]

I begin by thanking the Members who have contributed for what were thoughtful contributions, even where we fundamentally disagree on aspects of the Bill.

I have already outlined the benefits of the Government’s proposed approach, but I will respond briefly to some of the specific points made in the debate. First, I thank the Opposition spokesperson, the hon. Member for South West Devon (Rebecca Smith), for the constructive way that she and colleagues in both Houses have engaged on the Bill. She is correct that we have ended up in a better place, and I thank her and all Members who fed into that process—that is the point of it. I am pleased with where we have ended up.

The hon. Lady asked two specific questions. I can confirm that there will be a take-note debate at Grand Committee, as she referenced, at the point when statutory guidance is laid before Parliament. I can also confirm that Members will be able to meet with the PSFA independent reviewer.

I will briefly touch on some of the points surrounding Lords amendment 43, which has taken up the majority of the debate. I am grateful for the comments made by my hon. Friend the Member for Poole (Neil Duncan-Jordan) and my right hon. Friend the Member for Hayes and Harlington (John McDonnell), as well as the hon. Members for Aberdeen North (Kirsty Blackman) and for Horsham (John Milne) and the Lib Dem spokesperson, the hon. Member for Torbay (Steve Darling).

First, I think we need to be clear about where we have already acted in other parts of the Bill or in amendments that have come forward today. On the question of costs, for instance, the independent reviewer already has to look at effectiveness and has already committed to updating the impact assessment within 12 months of the powers coming into force.

I will turn to the question of vulnerable people, which the hon. Member for Horsham in particular illustrated very eloquently indeed, with moving examples. I want to say something specifically on debanking, which is a concern that has been raised multiple times throughout the stages of the Bill. We are very clear that nobody—vulnerable or otherwise—should be debanked as a result of the Bill, as was made clear in the code of practice and in amendments we are considering today. There are many existing layers of protection in our existing processes. On vulnerable people, Lords amendment 82 clarifies that the use of the power must be “necessary and proportionate”, which I believe would cover this.

My right hon. Friend the Member for Hayes and Harlington made a specific point on whether EVM information alone is enough. We are baking in a human decision maker at all points throughout the process. We cannot take a decision based on EVM information in isolation; we must consider all other relevant information. Practically, that means that we must look at a benefit claim and check for disregards or for any other reason that someone may have capital in excess of £16,000—the limit—before taking any action.

However, as I said earlier, I do think that this Bill is much improved from where we started.

[John McDonnell]

I just want to clarify one point. For the life of me, I cannot understand why the Government are resisting having contained within the annual review the question of whether harm is being done, because that is, to be fair, the only way we will learn whether the legislation is operating in the way the Government wish it to, and then whether any changes in the system are needed. When we had the work capability assessment, it took us 10 years and more than a thousand suicides before people accepted that there was a problem, because there was no review mechanism publicly available. That is all this amendment is asking for. All I am asking for today is for the Minister to put on the record very clearly that it is perfectly appropriate for the independent reviewer to look at the harms that could have been created by this legislation.

[Andrew Western]

I appreciate the point my right hon. Friend is making. As I have just said, the question of whether actions taken as part of the eligibility verification measure are necessary and proportionate is baked into the Bill, and I believe that would cover the points he is making. I strongly encourage my right hon. Friend to attend the meeting with the independent reviewer that I referred to earlier to stress that point. I will certainly go along, and I will undertake to press on that, too.

I understand where we are on Lords amendment 43, but with the additional safeguards that will be baked in through the amendments in lieu, I believe we have reached a point where the Bill will achieve what it needs to while being fair and protecting vulnerable people. I urge all colleagues to support the Government proposals today.

Lords amendment 1 disagreed to.

Government amendments (a) and (b) made in lieu of Lords amendment 1.

Government amendment (a) made to Lords amendment 75.

Lords amendment 75, as amended, agreed to.

Lords amendments 30 and 31 disagreed to.

Government amendments (a) to (c) made in lieu of Lords amendments 30 and 31.

Clause 75

Eligibility verification: independent review

Motion made, and Question put, That this House disagrees with Lords amendment 43.—(Andrew Western.)