Public Authorities (Fraud, Error and Recovery) Bill

Baroness Coffey Excerpts

2nd reading
Thursday 15th May 2025 Lords Chamber

[Baroness Coffey (Con)]

My Lords, it is a huge privilege to follow my noble friend Lady Spielman after her exceptionally thoughtful, insightful speech to the House, indicating very clearly the experience she will bring.

It is no surprise that somebody obviously very bright who did a mathematics degree at Cambridge University became a chartered accountant. I understand she is super-fabulous at XL spreadsheets, a skill I am sure we can use to interrogate all sorts of statistics coming out. After a successful career in finance, she saw that particular moment that called her to try to improve lives, particularly those of young people. She took on a master’s, I think it was at the University of London’s Institute of Education.

Most people will know my noble friend Lady Spielman from her role as the chief inspector at Ofsted, but she also spent five or six years as chair of Ofqual. Speaking to people who worked with her at that time, one of the things that they particularly valued about her was her ability to bring together a top-class board to try to help through some of the challenging times and to make sure that Ofqual continued to be there, focused on the quality of education and, importantly, the young people it was there to serve—substance and integrity coming through again, as we saw in her role at Ofsted. My noble friend said to me that, in essence, making sure that children got the best start in life was key, and she believed that the way to achieve that, as we saw, was substance and integrity in the education they had, so that they were well prepared for the future.

We saw this in a different way because, before then, my noble friend had been a founding member of the Ark Academy. Anybody who has been to an Ark Academy school will know how brilliant they are, so that is a lifelong legacy of which she should be rightly proud. Perhaps going to Ofsted may have seen a slightly different approach on perhaps the harder side of some aspects of education, but I think that experience of what could be done is why we have seen the number of schools that are now excellent rise significantly. We have seen the educational attainment of children rise, which is not solely due to my noble friend, but, as a previous colleague of hers said, nobody knows education better in the round than my noble friend Lady Spielman.

I think it is fair to say that I had limited interaction with my noble friend when I was a Minister. I remember a couple of discussions and all I will say is that she had certainly acquired the teacher’s look. My parents were both teachers. She had a warm smile, as we have seen today, but she knew her stuff and she also knew how to get her point across.

Outside this House, my noble friend is currently a trustee of the Victoria and Albert Museum. She is obviously a lady of culture, but there is another element that I appreciate. My former MP is in this House as my noble friend Lord Young of Cookham. He used to be known as “the Baronet on a bike”. Well, we now have a Baroness on a bike. There is almost nowhere that my noble friend will go without it involving two wheels rather than four.

We saw in the quality of the debate today how my noble friend will contribute to many issues, and it is now to that that I turn. This Bill is important and I welcome the fact that we finally have something to get going. I say that with genuine passion and I congratulate the Government on getting under way. I am conscious that, under my Government, while I set out a strategy three years ago in May 2022, it contained the classic phrase “when parliamentary time allows”, and it was a frustration of mine that we did not get it going until quite late on and, as I will explain, in my view some of the measures had changed since I was in office as Secretary of State for Work and Pensions. It felt somewhat, to be candid, as if they had been watered down. That might be in recognition of some of the issues raised across this House, but, as the tone of my speech I hope will show, I do not think this Bill goes far enough, and I will be encouraging the Minister to look again at what they could perhaps do.

Let us get some statistics right. It has been well said by the noble Baroness, Lady Fox of Buckley, that we should think about where the DWP has not made sure that people have the money they are entitled to. I think that is in the region of £1 billion per year, 0.4% of the £292 billion that DWP paid in the last financial year. The figures are stark. I congratulate all the people at DWP; I am sure Ministers will take credit for it, and that is okay, but I know there is a great legacy of activities that we got under way, recognising that it was simply unacceptable to have fraud in our system of well over £7 billion. The figures that came out this morning show that fraud is estimated to be £6.5 billion, of which claimant error is £1.9 billion and official error for overpayment £1 billion. That fraud has come down from the previous financial year, from £7.3 billion for fraud and £1.6 billion for claimant error, so, unfortunately, claimant error appears to have gone up, as indeed has official error, in cash terms.

It is easy to get into stats about percentages and similar, and I understand why, but cash is real. When I was at the department, I probably got some of the policies that were presented to us today and I said, “We have to go further, because this is real money”. It is the difference about whether you build a hospital or not. It is the difference about the policy that has now happened about winter fuel payments. It is the difference about aid overseas. It is the difference—call me a traditional Conservative—about actually not spending that money but reducing our debt mountain and therefore some of the interest that we pay. Of course, it could then lead to other uses of spending, but it is important that we recognise that this is real cash.

That is why I am keen to point out that I understand why people have concerns about the variety of powers. I do not intend to comment so much on PSFA, but I hope the Government will take the opportunity to make it a slightly better, snazzier snap, as it were, in terms of making sure that the public know that we are actually serious as a Parliament about recovering money from criminals. Some of the powers that I have heard about seem somewhat draconian. However, given what I am about to say, perhaps I will not be quite so sceptical when we go through Committee.

With regard to the other significant amount, that is where the proposals—as has already been caught by the noble Lord, Lord Rook, and the noble Baroness, Lady Fox of Buckley—are actually about trying to avoid claimants making errors in the first place, although the definition of claimant “error” can sometimes be a bit generous, rather than being “fraud”. Nevertheless, we should do whatever we can to prevent people not necessarily having the right claim and make it easier to make sure that their records are up to date, otherwise we end up with the uncomfortable situation with, for example, carer’s allowance overpayments and people being expected to pay back a lot of money for not realising some of the changes. If there are ways that we can do more of that, that will be helpful.

I know the DWP already has the powers to go into HMRC and PAYE, and that has helped to tackle some of this, but powers are necessary to go further. As I say, even just the debt owed at the end of the last financial year was nearly £10 billion, and that is still a substantial amount of money that is owed from benefits.

In terms of thinking through, I could go on about, frankly, callous criminals trying to use the welfare system as a cash machine rather than thinking of the most vulnerable, whom it is there for. We need to make sure that this money is well spent and reaches the people that it is supposed to.

I know that Covid was particularly difficult. I am not going to go back over Covid history, but I will point out that the DWP has been good at trying to absorb and use technology. For example, over just one weekend we managed to stop £1.9 billion going to organised criminals—money we would never have got back. The DWP successfully prosecuted a gang for fraud that involved only—sorry to sound glib about it—£68 million. Nevertheless, it is that sort of sophisticated approach that has led to the DWP upgrading its powers and use of technology to make sure that taxpayers’ money goes to the people Parliament has decided deserve, need and should have that money. It is vital we keep that in mind.

There are a variety of things that could be done to identify and stop abuse of the system through retrospective claims and similar. It is important we continue with that.

On some of the powers people may not be aware of, we—sorry, I mean the DWP; it is still in my heart and my DNA—have the powers to go after named individuals, but it is a very time-consuming process. This is approach is intended to be somewhat more comprehensive, and this is why we need to go further.

Government technology has evolved so much, but the same is true for the criminal. The banks have written to us with their concerns about potential conflicts. I can assure the banks that there is no conflict concerning a Government and a Parliament that want to stop criminals getting money to which they are not entitled—money that has the potential to improve people’s lives.

There is one thing I agree with the banks on. The risk with the legislation as it stands is that could be too easy for criminals to quickly find a workaround that may not necessarily be obvious. One of the gaps in the legislation is that it tends to go after the bank accounts that benefits such as universal credit are paid into. I do not know about other noble Lords, but I have at least four bank accounts, and I can move money between them within seconds. These are issues we were looking to address, and I am not sure if they are covered in the Bill. You would be surprised to learn how many people—British citizens and others—are getting benefits in this country but are not living here and spending that money abroad. The Government should have access to such approaches, so that they can deal with this issue comprehensively.

As the noble Baroness, Lady Anderson, said, this is not about presuming someone is guilty. The issue at the moment with getting these extra bits of information is that you have to demonstrably show that you think the person is guilty. There is a mixture of issues at hand. There may be concerns from the ICO but, as I say, this is about taxpayers’ money that could be used better.

There is also a gap. I do not know why the DWP is not being given arrest powers, like HMRC. A lot of this legislation is supposed to be aligning the powers available to everybody, so I hope we can address that.

I am probably out of step with many others in the Chamber in this regard, but let us think in a different way. The British Crime Survey is about how people perceive crime—how they feel that they have endured crime—and 40% of crime now is fraud. We have done something to address that by making banks pay back money that perhaps should not have gone out of people’s accounts. Nevertheless, do not be surprised that fraud happens, but be pleased to some extent that the figure for fraud and error is now 3.3%. I would like to see it a lot lower, and a cash figure put on it, but we should be careful. There is a lot of scaremongering, but I genuinely believe that the British public want to make sure that fraudsters and criminals do not get a penny, and that the money goes to the most vulnerable.