Public Authorities (Fraud, Error and Recovery) Bill

Baroness Anderson of Stoke-on-Trent Excerpts

Consideration of Commons amendments and / or reasons
Tuesday 11th November 2025 Lords Chamber

Moved by

[Baroness Anderson of Stoke-on-Trent]

That this House do not insist on its Amendment 1 and do agree with the Commons in their Amendments 1A and 1B in lieu.

1A: Clause 2, page 2, line 6, leave out subsection (1) and insert—
“(1) The Minister may—
(a) investigate or take enforcement action in respect of suspected fraud against another public authority, or
(b) recover money on behalf of another public authority, only at the request of that public authority or if the Minister considers that it is necessary in the public interest to do so.”

1B: Clause 2, page 2, line 11, leave out “at the request of” and insert “on behalf of, or in relation to”

[Baroness in Waiting/Government Whip (Baroness Anderson of Stoke-on-Trent) (Lab)]

My Lords, I beg to move Motion A and will speak also to Motions B and D. I want to start by thanking this House once again for the constructive debates and meticulous scrutiny that the Public Authorities (Fraud, Error and Recovery) Bill has received throughout its passage. It has undoubtedly been strengthened, and I am grateful for the time noble Lords have put into engaging with the Government.

I believe that the Bill, as agreed by the House of Commons, makes a significant step in delivering this Government’s manifesto commitment to safeguard public money and ensure that every pound is wisely spent. At the same time, the Bill now contains further significant safeguards on the use of the new powers for the DWP and PSFA, strengthened by the scrutiny and insights of your Lordships’ House.

In moving Motion A, I will, with leave of the House, speak also to Motions B and D, which are grouped together. I turn first to Amendment 1 and the government amendments in lieu, Amendments 1A and 1B. As I said on Report in the Lords, the Government were unable to accept the original drafting of this amendment. However, we have listened to the desire of your Lordships’ House and, with some technical changes, are happy to propose these alternatives. I am grateful for the constructive discussions on these with the noble Baroness, Lady Finn, and the noble Viscount, Lord Younger—to whom I wish a remote happy birthday.

The amendments will give the Minister for the Cabinet Office the power to initiate an investigation when they consider it necessary in the public interest. As my colleague, the Minister for Transformation, set out when proposing this amendment in the other place, the Government believe it will almost never be necessary for the Minister to exercise this new power, due to the collaborative approach of the normal working of government, but it will be available if there is genuine necessity. It is the Government’s intention to create a fraud investigation service and this amendment is compatible with that continued intention.

Our amendments in lieu also make some 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 & Customs, for the reason which has remained unchanged throughout the passage of the Bill: that those departments already have considerable resources and powers to tackle tax and social security fraud.

I now turn to Lords Amendments 30 and 31. As I set out on Report, the Government support the principle behind these amendments. However, we could not accept the drafting as it stood. 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. I am therefore grateful for the constructive and rewarding discussions with the noble Baroness, Lady Finn, and the noble Viscount, Lord Younger—who is very young today—and propose the alternative government Amendments 31A, 31B and 31C. They have indicated their support and I hope that other noble Lords will also support them. The amendments mandate statutory guidance and a new reporting requirement and set internal recording requirements. They strike the right balance of ensuring strong ministerial and parliamentary oversight of the powers, without unnecessarily involving Ministers in operational decisions.

First, the statutory guidance will detail how the Minister will exercise the function of investigating suspected fraud against public authorities. It will outline governance arrangements, delegation of powers to authorised officers and authorised investigators, standards for the training and appointment of authorised officers and investigators and how the Minister will collaborate with an independent reviewer. Secondly, a report will be prepared following the end of each financial year and will be laid in Parliament by the Minister, stating how many times investigation and enforcement powers in Part 1 of the Bill have been used. This ensures regular ministerial and public visibility without compromising operational details. Lastly, there is now a requirement for the PSFA to keep internal written records of the exercise of the powers, which will be made available for scrutiny by an independent reviewer.

These records will specify the power exercised, date, reason for use and by whom, ensuring internal accountability. They will be made accessible to the independent reviewer, who will assess the use of the powers and produce a report which the Minister will publish and lay in Parliament. This addresses the need for a written record without public disclosure of sensitive information. Together, these amendments underscore our commitment to transparency, oversight and accountability, which we have maintained over the passage of this Bill.

We further committed during Committee in the Commons to adhering to the Cabinet Office governance code on public appointments, which is overseen by the Commissioner for Public Appointments; adding the independent reviewer to the Order in Council; following the established process for agreeing posts that should be subject to pre-appointment scrutiny by Select Committee without the need for legislative provision in the Bill; and compiling a list of all the concerns raised in both Houses to put before the independent reviewer, who will also meet with parliamentarians who have raised areas where they think their work should be focused.

I have also agreed with the noble Baroness, Lady Finn, that, because she really enjoys debating with me at the Dispatch Box, the initial statutory guidance will be subject to a take-note debate in Grand Committee after it is laid in Parliament. Together, the amendments ensure that Ministers are accountable for the use of the powers in Part 1 of the Bill and show how they are delegated. In places, they build on processes that would already have been in place but that we have brought forward into the Bill. I am grateful for the constructive discussions with the noble Baroness, Lady Finn, on these amendments and I am pleased to put in place these commitments. I hope this is sufficient to address the concerns of noble Lords and that they will agree to the Motions not to insist from the other place.

Finally, I turn to a minor and technical amendment the Government made to Lords Amendment 75 to Schedule 2. Amendment 75A simply ensures that authorised investigators are captured within the regulation-making power set out by Schedule 2, if or when the powers conferred under Part 1 of the Bill are transferred to another public authority that is not within the scope of the Ministers of the Crown Act 1975, or if the PSFA is set up as its own statutory body. It does not change the use of any powers laid out within the Bill. I hope noble Lords will support the Motion from the other place and I beg to move.

[Lord Palmer of Childs Hill (LD)]

My Lords, I thank the Government for listening to some of the points made by the noble Baroness, Lady Finn, myself and others. We are dealing here with Motions A, B and D, so let me deal with Motion A first. The Lords amendment aimed to give more powers to Ministers to take investigatory or enforcement action and we voted against it in the Lords due to it giving, in our view, too many powers to the Minister.

The Government have, to some extent, listened, and the amendment in lieu reaches what I would describe as a middle ground. That seems to be, as far as I know, acceptable to other people who will be speaking in this debate, I believe—coming first, I cannot be certain of that. On that basis, on these Benches, we are willing to accept the amendment in lieu in Motion A.

Turning to Motion B, Lords Amendments 30 and 31 relate to limiting the extent that powers can be used and ensuring that, when powers are used, they are properly reported. As noble Lords will know, we supported the amendments in the Lords and have noted again what the Government’s reaction has been. I am reasonably pleased at the reaction. The amendments reach, as I said on the other amendment, a middle ground, and from these Benches we are minded to accept the amendments in lieu.

Turning to Motion D, the powers to establish the PSFA and transfer functions, the Lords amendment created the Public Sector Fraud Authority. The amendment in lieu is a tidying-up amendment, as the noble Baroness said, and is uncontroversial. On these Benches, we accept that amendment in lieu. I look forward to the other amendments in due course.

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These amendments work together to strengthen the PSFA and give it a clearer mandate to act proactively, but they also remind us that the fight against fraud must be matched by proper safeguards and accountability. The new provisions in this part of the Bill leave it in a better place than when it entered this House. We will continue to monitor and ensure that the PSFA is both effective and answerable in the exercise of its considerable powers.

[Baroness Anderson of Stoke-on-Trent (Lab)]

I thank the noble Lord, Lord Palmer, and the noble Baroness, Lady Finn, for what I will take as wholehearted support for what we have done. I am grateful for their contributions and for the constructive engagement that led us to this point, both on these issues and in our earlier discussions with regard to whistleblowing. I genuinely believe that collaboration has got us to a good place with this legislation, and of course very much look forward to our ongoing discussions in Grand Committee.

Motion A agreed.

--- Later in debate ---

Moved by

[Baroness Anderson of Stoke-on-Trent]

That this House do not insist on its Amendments 30 and 31 and do agree with the Commons in their Amendments 31A, 31B and 31C in lieu.

31A: After Clause 66, insert the following new Clause—
“Guidance on exercise of investigatory functions
(1) The Minister must publish guidance about how the Minister will exercise the Minister’s function in section 1(1)(a) (investigating suspected fraud against public authorities). (2) The guidance must include guidance about— (a) how authorised investigators and authorised officers are to be appointed, (b) the training which individuals must undertake before being appointed as authorised investigators or authorised officers, (c) governance arrangements in relation to how authorised investigators and authorised officers are to exercise their functions for the purpose of the function in section 1(1)(a), and (d) how the Minister will work with an independent reviewer appointed under section 64. (3) The Minister may revise or replace guidance published under this section. (4) The Minister must publish any revised or replacement guidance. (5) The Minister must lay a copy of guidance published under this section (including revised or replacement guidance) before Parliament.”

31C: After Clause 66, insert the following new Clause— “Record of exercise of functions An authorised investigator or authorised officer must keep a written record of each exercise of a power in subsection (3) by that investigator or officer. The record relating to a particular exercise of a power must state—(a) the name of the authorised investigator or authorised officer, (b) the power which was exercised, (c) the date on which the power was exercised, and (d) the reason the power was exercised. The powers are— (a) the power to issue an information notice under section 3, (b) the power to apply for or execute a warrant under section 8(1) of the Police and Criminal Evidence Act 1984 (“the 1984 Act”) that is conferred by virtue of section 7, (c) the power to obtain access to material under section 9(1) of, and Schedule 1 to, the 1984 Act that is conferred by virtue of section 7, (d) the powers under section 19 of the 1984 Act (general power of seizure etc) that are conferred by virtue of section 7, (e) the power to apply for an order under section 8 (disposal of property), (f) the power to give a recovery notice under section 11, (g) the power to apply for a recovery order under section 16, (h) the power to make a direct deduction order under section 17, (i) the power to make a deduction from earnings order under section 38, and (j) the power to impose a penalty under section 50.”

[Baroness Anderson of Stoke-on-Trent (Lab)]

My Lords, I have already spoken to Motion B. I beg to move.

Motion B agreed.

Motion C

[Baroness Sherlock]

Moved by

That this House do not insist on its Amendment 43, to which the Commons have disagreed for their Reason 43A.