Statutory Instruments (Amendment) Bill [HL]

Debate between Baroness Finn and Baroness Anderson of Stoke-on-Trent

Friday 13th June 2025 Lords Chamber

[Baroness Finn (Con)]

My Lords, it is a pleasure to speak to this Bill from the noble Lord, Lord Thomas of Gresford. I will not detain your Lordships with a lengthy restatement of our concerns about the Bill, because we made them clear in Committee. I simply say that we have issues with the way it seeks to grant powers to the House of Lords that are arguably greater than the powers afforded to the elected House. Having put those concerns on the record, we did not seek to amend the Bill on Report and will not seek to delay its progress, but we cannot support it.

I close by thanking the Minister for her work on this Bill and, especially, the noble Lord, Lord Thomas of Gresford, for his engagement with me throughout its passage. He graciously and generously took time to meet to discuss the details before Committee, which was greatly appreciated.

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

My Lords, I thank the noble Lord, Lord Thomas of Gresford, for bringing forward this Bill. It has been an excellent opportunity to highlight the importance of secondary legislation. This Government place great importance on Parliament having the information it needs to scrutinise. From the introduction of the delegated powers toolkit to an enhanced training offer for civil servants at all levels, the Government are taking steps to demonstrate how seriously they take secondary legislation.

I also thank the clerks and advisers of the Joint Committee on Statutory Instruments, as well as the Secondary Legislation Scrutiny Committee and the Delegated Powers and Regulatory Reform Committee, for their diligent work in scrutinising the secondary legislation the Government lay before Parliament. I remind the House that my husband is a member of the JCSI.

I take this opportunity to thank the National Archives for maintaining legislation.gov.uk, which is a valuable resource for all Members of your Lordships’ House, as well as the general public, and for its work in administering the correction slip process, which the Bill would place on a statutory footing. With the greatest respect to the noble Lord, Lord Thomas of Gresford, the Government disagree that this is a necessary service for the correction of insubstantial errors. We remain of the view that there has always been a need to strike the balance between providing the Government with the flexibility they need to deliver for the country and ensuring that the information they provide is clear and explains why legislation is necessary.

Ethics and Integrity Commission

Debate between Baroness Finn and Baroness Anderson of Stoke-on-Trent

Thursday 12th June 2025 Lords Chamber

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

Well, I query the interpretation of what my honourable friend in the other place said. He said “show, and tell”. We have told: we have updated the Ministerial Code; we moved the Nolan principles into the Ministerial Code for the first time; we have added the concept of service, which is incredibly important to this Prime Minister; we have updated the terms of reference for the independent adviser, who can now act without the Prime Minister’s instigation; and we have introduced a new monthly register of guests and hospitality. We have both shown and told. In terms of establishing the commission, noble Lords will have to wait a little longer and I will update your Lordships’ House in the normal way.

[Baroness Finn (Con)]

My Lords, in July last year, the Chancellor of the Duchy of Lancaster confirmed in the other place that work had begun on the Government’s planned ethics and integrity commission. Obviously, the role of the chair of this commission will be very important. Can the Minister confirm that there will be proper oversight of the appointment of any future chair of the commission, that Parliament will have a role in the process and that the chair will remain democratically accountable to Parliament through Ministers in the usual way?

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

The noble Baroness tempts me to give details about what the commission will or will not look like. I am sure we will discuss this in your Lordships’ House when parliamentary time allows. With regards to the independence of the chair, the appointments to bodies and offices listed in the public appointments Order in Council are made in accordance with the Governance Code on Public Appointments and so would the chair of any future commission.

Public Authorities (Fraud, Error and Recovery) Bill

Debate between Baroness Finn and Baroness Anderson of Stoke-on-Trent

Committee stage
Wednesday 11th June 2025 Grand Committee

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

The noble Lord makes a very interesting point, on which I will have to reflect and come back to him, if that is okay.

[Baroness Finn (Con)]

I thank the Minister and look forward to her reflections. In closing, I return to the core principle running through each of the amendments in this group: public confidence in enforcement powers depends not just on the ability to cover funds but on the manner in which those powers are exercised. The noble Baroness, Lady Fox, was also emphatic in this regard.

Whether they concern ensuring that decisions are properly communicated, that personal circumstances are demonstrably considered, that employers are consulted on the burdens placed on them or that enforcement is time-bound and proportionate, our amendments seek to build a framework that is seen as being as fair and accountable as it is effective.

We have not sought to unpick the intent of the Bill or to weaken the Government’s ability to recover what is owed. But we have sought to refine it responsibly and constructively, so that those affected by its provisions are treated with clarity, respect and procedural justice. We have argued, with these amendments, that decisions should be explained in writing, circumstances must be considered and shown to be considered, and powers must be bounded by purpose, not open-ended phrasing. I take the Minister’s points on “among other things”, but it is a rather clumsy way to write legislation. The fact that she introduced “among other things” and gave some examples shows that this should be more tightly drawn.

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

My Lords, these amendments all pertain to the scope, application and oversight of the civil penalties measures. The measures have been designed using established cross-government best practice so that the PSFA may effectively deter and recuperate money lost to fraud and include numerous safeguards for individuals and businesses.

I find myself in the unique position, so far in this Committee, of agreeing with the noble Baroness, Lady Fox, although maybe not for the reasons that she set out, on Amendment 63A, which would unnecessarily extend the legislation by adding a definition of “help” to Clause 50. The Fraud Act 2006 establishes the fraud offence, which includes an individual making

“a gain for himself or another”.

The Fraud Act does not define “help” in terms of making a gain for another. This is because the Act focuses on the “dishonest intent” of a fraudulent act. Under Clause 70(1)(c), the offence at common law of conspiracy to defraud is already punishable under the Bill. Clause 70(1)(b) includes and covers Sections 6 and 7 Fraud Act offences. This allows for penalties to be issued against the fraud “influencers” we have already discussed during the Bill’s passage. The offence at common law of conspiracy to defraud is also already included in our definition of fraud. It is therefore unnecessary to define “help” in order to use either the Fraud Act or this Bill, although I was very tempted to quote Beatles lyrics—that may just be the time of day.

Amendment 63B would amend Clause 52 by replacing the Minister with the First-tier Tribunal in cases where a fraudster attempts to take public money but is stopped before they receive the payment. There is existing precedent for not using the First-tier Tribunal as the first-instance decision-maker: for example, in the Home Office for the employment of illegal workers. The legislation also includes the right to appeal a decision to the appropriate court following the receipt of a final penalty notice—I will come on to that.

Amendment 63C seeks to broaden the requirement of Clause 58(4) beyond Clause 58(2)(c) so that it may apply to Clause 58(2)(a) and Clause 58(2)(b). This is unnecessary, as Clause 58(3) already requires the Minister to give notice to an individual if the penalty is upheld. While I recognise its intent, it is unnecessary to include Amendment 63D in the Bill. While there is no obligation under common law to provide an explanation for a positive decision—that is, to amend or cancel the penalty—authorised officers will do so as part of the review process. They will also provide an explanation for a decision to amend or cancel the penalty as part of the review process. The civil penalties code of practice and further guidance will support authorised officers.

Amendment 64A would add additional unnecessary complications to the legislation. It is the intent of the legislation not that regulations may be made to reduce or abolish the appeals provisions for penalty notices but that any further regulations may improve, streamline or make the appeal process more efficient. For example, appeals for civil penalties may be heard at the same time as appeals against debt recovery notices.

I turn to the specific points raised by noble Lords. In response to the noble Baroness, Lady Finn, I remind the Committee that the tribunal appeal is already in the process at a later stage, that of determining the penalty. Bringing the tribunal in earlier would add time and burden. I think that I have covered the other points in my speech, and the noble Baroness, Lady Finn, will remind me if I have not—she may be about to—but I hope that my explanations reassure noble Lords and that the noble Baroness will therefore withdraw her amendment.

[Baroness Finn (Con)]

I thank the Minister for giving answers to most of my questions, even if they were not entirely to our satisfaction. In closing, I return to the central purpose of this group of amendments: to ensure that the enforcement powers granted under this part of the Bill are clear in scope, fair in operation and subject to meaningful oversight.

Before I continue on to the other amendments, I will address the concerns of the noble Baroness, Lady Fox. The Minister states that the existing law is sufficient, but there is quite a lot of evidence, and anecdotal evidence, that sickfluencers, as they are called—sick influencers—are active and busy. How many people have ever been pulled up or—

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

This is a point where I should say that there are two parts of the Bill. I am sure that, as Committee progresses, we will discuss sickfluencers. This part of the Bill is making sure that the PSFA has the powers to deal with similar online influencers—I do not think we can call them sickfluencers in relation to fraud—who are leading the charge. Obviously, the PSFA is seeking new powers and we hope to be able to use them. Therefore, I cannot provide the noble Baroness with the data for what prosecutions may or may not have been made up until this point. But we hope that, with new powers for the PSFA, that will be part of the work going forward.

[Baroness Finn (Con)]

I thank the noble Baroness. When we were seeking to introduce this definition of “help”—I take on board the concerns of the noble Baroness, Lady Fox—we were trying to presage the fact that this would come up in a later part of the Bill. I deliberately, in my opening remarks, did not reference sickfluencers, but the noble Baroness, Lady Fox, obviously understood where I was going with that. I am just not convinced about how effective the law currently is in this area.

Our other amendments respond directly to the challenges posed by modern forms of fraud and the expanding reach of administrative enforcement. Whether we are seeking to define what it means to help commit fraud in an online age, requiring that penalties based on hypothetical harm are assessed by an independent tribunal or ensuring that decisions and processes are explained clearly to those affected, these are not procedural niceties; they are essential guarantees of accountability and trust. We cannot afford to leave grey areas for those who seek to exploit the system from the sidelines and we also cannot allow the exercise of significant powers, particularly those that impact people’s livelihoods, to proceed without checks, explanation or independent scrutiny.

This group of amendments does not frustrate the aims of the Bill; it strengthens the Bill. It ensures that public funds can be protected in a way that is not only effective but proportionate, just and transparent. We are asking for three simple things: definitions that are clear so that enforcement can be targeted where it is needed most; penalties subject to oversight, particularly when no actual loss is concerned; and decisions and appeals processes that are robust, explainable and open to democratic scrutiny. These are reasonable, moderate and constructive proposals. They do not undermine the Bill’s purpose; they help it to stand on firmer constitutional and ethical ground. I urge the Minister and all noble Lords to consider them seriously and to support a set of changes that would not only improve this legislation but help to secure public confidence in the integrity of its application. On that basis, I beg leave to withdraw the amendment.

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[Baroness Finn (Con)]

My Lords, while I recognise the concerns that underpin this amendment in the name of the noble Lord, Lord Palmer, it is both unnecessary and potentially duplicative, given the extensive scrutiny already taking place through existing and robust channels, as my noble friend Lady Coffey made clear. First and foremost, we must acknowledge that a comprehensive public inquiry is under way into the Government’s response to the Covid-19 pandemic. That inquiry, established under the Inquiries Act 2005 and chaired independently, has broad terms of reference, including examination of procurement processes, ministerial decision-making and the use of public funds. The amendment risks pre-empting, duplicating or even undermining that process by imposing a parallel and more narrowly framed exercise before the formal inquiry has concluded its work.

Let us be clear: the Covid-19 pandemic presented an unprecedented national emergency. Ministers, civil servants and public bodies were called on to make swift, high-stakes decisions in the face of an unfolding crisis. They did so with little warning, under extraordinary pressure and with the primary objective of protecting lives and livelihoods. In that context, decisions were taken at pace to ensure that vital supplies were sourced, support was distributed rapidly, and services could continue to operate. Was the system perfect? No—but to assume that those who contributed to the effort to tackle Covid were doing so for malign reasons is inaccurate. However, that is not to say that we should not seek to recover money where errors were made, and it is of course right that we take steps to realise this outcome, which has been the guiding principle of all our engagements with the Bill: public money should be recovered.

We should therefore make full use of the mechanisms that already exist to assess and recover losses. The National Audit Office, the Public Accounts Committee and internal departmental review bodies have all examined pandemic-related spending and made a series of recommendations, many of which are already being implemented. Indeed, the Public Sector Fraud Authority continues to track and pursue recoveries on this matter. To impose an additional reporting requirement through the Bill, especially one that compels Ministers to publicly acknowledge failings before the full picture is known, would not serve the cause of accountability; rather, it risks creating a politicised and partial process, which may generate more heat than light and overlap confusingly with the broader inquiry now under way.

Let us not lose sight of the bigger picture. The Bill is about strengthening the framework to combat public sector fraud going forward; it is not the right vehicle for relitigating decisions taken in the darkest days of a national emergency. The public inquiry will give us the full breadth and depth of insight that is needed, with the benefit of time, evidence and impartial examination. In the meantime, let us not cast unfair aspersions on public servants and Ministers who, in the face of enormous uncertainty and unimaginable pressure, acted on the whole with integrity, urgency and a profound sense of duty.

I urge noble Lords to recognise that the proper process is already in place and that we must allow it to do its job without prejudging its conclusions. For these reasons, I respectfully oppose the amendment.

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

My Lords, I find myself agreeing with the sentiment behind the amendment in the name of the noble Lord, Lord Palmer. The Government are committed to investigating and combating cases of fraud and error in Covid-19 spending. If I touch on some of the things that the Government are already doing, perhaps he will be reassured that we are already taking this seriously.

The Bill will give the Public Sector Fraud Authority powers to conduct investigations, levy civil penalties and recover money. It also doubles the time limit for civil claims against Covid fraud from six to 12 years to ensure that we can continue to investigate. Although the proposed amendment to mandate a report on public sector fraud during the Covid-19 pandemic underscores the importance of accountability, it is unnecessary given the existing frameworks already in place. The question is whether appropriate reporting processes on Covid-19 spending have already been established—and I would argue that they have.

A dedicated Covid Counter-Fraud Commissioner has already been appointed to review losses of public money to fraud, error and underperforming contracts during the Covid-19 pandemic. Working collaboratively with departments and agencies such as the Public Sector Fraud Authority, His Majesty’s Treasury and the Department of Health and Social Care, the commissioner is focused on public funds lost to fraud, error and underperforming contracts during the Covid-19 pandemic.

The commissioner’s remit includes: assessing recovery efforts to date to determine where additional recoveries can be made and ensuring they are vigorously pursued; ensuring that maximum recovery efforts have been made and providing assurances on this to the public and Parliament; reviewing individual contracts to provide additional attention and reassurance on spending that is disputed; and, from this work, generating lessons and making recommendations for the future. By placing this responsibility with an expert dedicated commissioner who reports directly to the Chancellor and works in close co-ordination with key departments, the Government have ensured a clear and strategic approach to addressing pandemic-related fraud.

Given the breadth and focus of this work, introducing an additional ministerial reporting requirement would be duplicative and could divert resources away from ongoing recovery efforts. It risks creating unnecessary bureaucracy and delaying outcomes. We genuinely believe that the outcome the noble Lord seeks is already in place within government.

To touch on the debate, which was about the wider lessons to be learned from the Covid-19 pandemic, the Bill is specifically about fraud, but I am more than happy to meet the noble Baroness, Lady Bennett, to discuss resilience in the round and the work that the Government are currently doing, as I believe a private meeting would be a more appropriate forum. I hope that that these assurances reassure the noble Lord, Lord Palmer, and that he therefore feels able to withdraw his amendment.

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

My Lords, I am more than happy to write to the noble Viscount.

[Baroness Finn (Con)]

My Lords, I thank the Minister for her response. In closing this group, I return to the central theme that underpins Amendments 67 and 68: that transparency is not an optional extra in the fight against public sector fraud but an essential condition of legitimacy, accountability and effectiveness. We are granting significant powers under the Bill, powers to recover, to penalise and to compel, but the exercise of those powers must not exist in a vacuum. The public, and indeed Parliament, must be able to see how those powers are being used and whether they are making a real, measurable difference.

Amendment 67 would ensure that the use of these new powers is reported on annually. It would allow us to track how these tools are deployed, where they are having an impact and where further improvement or scrutiny may be required. It would give Parliament, committees and the public a vital feedback loop, not to micromanage but to hold the system to account and ensure that it continues to serve its intended purpose.

Amendment 68 would complement that by shining a light on the scale of the challenge itself. If we are to treat fraud with the seriousness it demands, we must start by being clear-eyed about the extent of the problem. I am sure that internal estimates are already being produced within government; this amendment simply asks that they be published regularly and in good faith, so that we can judge our progress, measure impact and direct resources more intelligently.

I take the point the Minister made about the estimates ranging from 0.5% to 5%, but I am sure she will agree that, given the enormous amounts of these figures, that that 0.5% to 5% is a rather wide range of figures of billions of pounds. Would she like to expand on that and give me what the actual amounts in 0.5% to 5% might be?

[Baroness Anderson of Stoke-on-Trent]

It is suggested to me that the actual amount, as touched on by the noble Viscount, is at least £55 billion, but I will be writing to all members of the Committee who are present.

[Baroness Finn (Con)]

I thank the noble Baroness for her answer. Is that the 5% or the 0.5%? Anyway—

These amendments would not add bureaucracy for bureaucracy’s sake. They would build confidence, encourage departmental responsibility and improve operational performance. They would not be constraints on ministerial power, but a scaffolding of legitimacy around its use. Crucially, they would reflect the truth that we have heard echoed throughout the passage of the Bill, that public trust is hard won and easily lost. If we are to strengthen that trust, we must show not only that we are serious about tackling fraud but that we are equally serious about demonstrating how we are doing so and being accountable for the results.

Once again, these are reasonable, proportionate and practical amendments, and I hope the Minister will reflect on them not as additional burdens but as meaningful opportunities to improve the transparency, responsiveness and long-term success of this legislation.

I emphasise that I am not being a total nuisance in pushing on the quality of data. It is not a new phenomenon; I spent many years in the Cabinet Office tearing my hair out about the quality of data. The one thing that I learned when I was working for the noble Lord, Lord Maude of Horsham, when he was the Minister in the Cabinet Office, was that the quality of the data improves by greater transparency. I just make that point; it is not a criticism of the Government, but a criticism of the data process within government.

In conclusion, I urge noble Lords across the Committee to support the principles in these amendments and, in so doing, to support the kind of open and accountable government that underpins any effective public policy. I beg leave to withdraw my amendment.

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

My Lords, tackling public sector fraud is a foremost priority for this Government. Amendment 68D raises interesting points. It seeks to put some of the work that the PSFA does with departments and public bodies to improve their management of fraud on a statutory basis, and to explicitly have it cover all government schemes or programmes over £100 million.

While we have been debating the fraud investigation activities of the Public Sector Fraud Authority, for which we believe there is a very strong case, we have understandably not given as much time to the wider responsibilities the PSFA already holds, as detailed in its published mandate—which is wonderful bedtime reading, as per my theme; I like to give bedtime reading on each day in Committee. This is not part of the Bill, but it might be useful for noble Lords if I spend a moment to update the Committee on the other work of the PSFA.

The PSFA works with departments to improve their understanding of fraud and to improve their action on the risk of fraud through a range of modern techniques. Fraud investigation is, of course, only one part of this. Alongside this, public bodies need effective capabilities to understand and reduce the risk of fraud, through tools such as fraud risk assessment and fraud measurement, which this proposed amendment covers, and also through intelligence, fraud prevention, deterrence, process design, the use of data and analytics, fraud detection and the shaping of an organisation’s culture.

I would like to set out some key principles around how the Government approach fraud risk. Accounting officers within departments are responsible for managing public sector organisations’ risks, including fraud. Each organisation faces a range of fraud risks specific to its business, from internal and external sources. Managing Public Money—also a fascinating read—already sets out that, for any new major area of spend with high fraud risk, departments shall assess the risk of and impact from fraud at the outset. This identifies the potential for fraud and the different impacts that fraud could have for the spend area.

In high-risk areas, once spending is approved, this results in the development and continued maintenance of a detailed fraud risk assessment. High-risk areas would be the highest areas of government spending where fraud measurements are not yet in place and which have been identified as high risk by a mandatory initial fraud risk assessment process. The PSFA was introduced with a published mandate that openly sets out how it will work with departments and public bodies and what is expected of all parties. Government departments and public bodies must comply with this mandate. The mandate sets out that public bodies must use initial fraud impact assessments, in line with Managing Public Money, submit quarterly data returns on the levels of fraud and error they find and report on their progress against their action plans and key metrics.

Departments and public bodies are also required to ensure that they adhere to the counterfraud functional standard. This is independently assured by the Public Sector Fraud Authority on a rolling basis. The functional standard outlines the expectations for managing counterfraud, bribery and corruption activity. It clarifies the basics that public bodies should have in place, promoting efficient, coherent and consistent management across the public sector. The PSFA’s published mandate enables it to conduct expert reviews on public bodies’ fraud work. To date, the PSFA has reviewed 31 public bodies against the counterfraud functional standard. The PSFA’s mandate also requires it to publish a report on fraud across government annually. This includes the levels of detected fraud and corruption and associated error in departments and public bodies—excluding tax and welfare, as these are published elsewhere. Fraud measurement exercises are used as a tool to understand fraud risk in the highest areas of loss.

The Government have also created a high fraud risk portfolio, in line with the PSFA’s mandate, that details the highest risk areas of government spending where there are not yet fraud measurements in place. The Government decided that schemes on this portfolio should undertake fraud measurement exercises and report these to the centre. This is currently being tested with the current schemes on the portfolio, where it is operating on a “comply or explain” model, enabling us to assess the burden and impact of this approach. The PSFA will continue encouraging and supporting departments to do more targeted measurement. Just last year, the government counterfraud profession launched its first qualification for fraud measurement practitioners.

The amendment also recommends that all the findings are reported to the National Audit Office, in the form of the Comptroller and Auditor General. The PSFA’s mandate already enables the PSFA and the NAO to work very closely to share information on public body performance in dealing with fraud:

“The PSFA will openly and regularly update on its activities and the data it holds to the National Audit Office (NAO). This will include performance data and the compliance with mandatory processes and data requests”.


In addition, this is an area that the Public Accounts Committee has paid keen attention to, and the PSFA has committed to share the high fraud risk portfolio with the committee on reading-room terms.

I hope that the collective measures I have outlined reassure noble Lords that the Amendment 68D would serve only to replicate responsibilities and duties that already exist and that the noble Baroness will therefore withdraw the amendment.

[Baroness Finn (Con)]

My Lords, as we close the debate on this amendment, let us return to first principles. Public money must be protected, not just recovered after it is lost. That protection starts not with more powers but with stronger systems—systems that encourage responsibility, enable scrutiny and reward transparency.

Amendment 68D would be a practical, proportionate step towards that goal. It sets out a clear set of duties for public authorities that manage major spending schemes—duties that mirror the kind of basic risk management we would expect from any serious organisation handling significant funds. It is not, as I have emphasised, about adding layers of bureaucracy but about lifting the standard of governance across government. It is about saying to departments and public authorities, “If you are entrusted with large sums of public money, you must also be prepared to demonstrate how you protect that money from fraud, and you must do so in a way that is transparent, measurable and independently verifiable”.

This amendment is not just good policy; it is good practice. It would ensure that those with front-line responsibility for major schemes understand and own their risk landscape. It would support the PSFA by creating a consistent baseline of risk information and freeing up its capacity to focus on oversight and intervention, rather than firefighting. It would give Parliament and the public a clear view of where fraud controls are working and where they are not.

The red/amber/green system offers not just transparency but motivation. It highlights good performance, surfaces areas of concern and gives departments an incentive to improve. That is how you change behaviour: not by wishful thinking or ministerial Statements but by law. If a department reports low fraud rates and the authority finds something very different, it must act. It must issue a notice, demand an action plan and ensure that changes are made. If no action is taken, the Comptroller and Auditor-General can audit compliance and report to Parliament. That is what proper fraud prevention looks like. It does not wait for the scandal; it creates a system that sees the risk before the damage is done.

Amendment 68D is not an optional refinement; it is the core of the Bill’s purpose restored. Without it, we will once again be left with false confidence, unreliable data and billions lost in plain sight. In short, this amendment is a road map for better practice—one that I believe both Parliament and the Government should support. I beg leave to withdraw.

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

My Lords, I thank noble Lords for raising the important issues of independence, recruitment, reporting and powers should the PSFA become a statutory body. The purpose of creating a statutory body is to place individual enforcement decisions at arm’s length from Ministers, but we have been clear that, while the PSFA enforcement unit is small, creating a new statutory body is not proportionate, so the Government will not commence Schedule 2 in the immediate future.

The approach in Schedule 2 adheres to published guidance in the Public Bodies Handbook. It follows the same approach used elsewhere, such as Schedule 1 to the Victims and Prisoners Act, which established the Infected Blood Compensation Authority. Amendments 68E and 68F seek to insert “independent” before the description of the chair and non-executive directors. These are ministerial appointments, but I remind your Lordships that the Government have been clear that, should the PSFA be established as a statutory body, its enforcement decisions would be fully independent of the Minister. To ensure this, the chair and non-executives will be public appointments and will follow the Cabinet Office Governance Code on Public Appointments, which is overseen by the Commissioner for Public Appointments. This will ensure that their recruitment is transparent and includes an independent member on the recruitment panel. This is similar in approach to the Infected Blood Compensation Authority, which uses the same legislative language. Amendment 69B seeks to insert words to a similar effect in respect of the chair appointing the chief executive and executive board members, so it is linked to these amendments.

In respect of Amendments 71A and 74B, which seek to remove the Minister’s power to make regulations on the eligibility rules for members of the PSFA and to prevent the PSFA from authorising a person who is not a board member of the authority authenticating its seal, it is important to note these are common provisions in the creation of public bodies. The seal is the means by which the PSFA will be able to enter into deeds and contracts, such as leasing property, and authenticating the seal just means signing next to it to show that the deed has been approved. Although authentication would usually be done by a board member of the PSFA, we have built in a degree of flexibility so that it can be delegated, for instance to its legal officers, should the need arise. As noted, the Infected Blood Compensation Authority and other public bodies such as the independent monitoring authority, established in the European Union (Withdrawal Agreement) Act 2020, have similar provisions. They serve to improve the efficacy and administrative efficiency of such public bodies.

As to Amendments 74C and 74D, which would see the Minister retain responsibility for the exercise of functions in the Act after they have been extended to the PSFA, and Amendment 69A, which would make the chief executive and other executive members’ ministerial appointments, I refer your Lordships to my earlier point. One essential reason in setting up the PSFA as a statutory body would be to remove any perception of potential political interference. These amendments would be counter to that policy intention.

Finally, Amendment 74A would require the PSFA to publish its annual report within three months of the end of the financial year. The Bill currently stipulates, in paragraph 12 of Schedule 2, that this should be as soon as reasonably practicable after the end of each financial year. That is for good reason. The accounts will need to be reviewed by the Comptroller and Auditor-General, whom we would then need to commit to this timeline. Additionally, Erskine May, our own guidance on reporting, notes that accounts, together with an NAO report, must be laid no later than the following January. A statutory PSFA would follow Erskine May, as well as His Majesty’s Treasury’s guidance on Managing Public Money and the annual Government Financial Reporting Manual, to ensure that its report follows best practice.

I turn to the specifics of the points that have been touched on. The noble Baroness, Lady Finn, asked why eligibility regulations under paragraph 6(1) of Section 2 are useful. The ability for a Minister to lay eligibility regulations in respect of a board’s membership is a common feature in setting up public bodies. They can be used, for example, to safeguard independence, ensure expertise at its inception, or improve public trust by excluding certain individuals or demanding certain attributes. Examples might include barriers against those who are currently politically active, or have conflicts of interest or criminal convictions.

With regard to powers being exercised on a Minister’s behalf and safeguarding, there are numerous safeguards built into the Bill, such as independent oversight of all the provisions by external bodies. There are also obligations to obtain the permission of the courts for debt recovery and rights of appeal to the First-tier Tribunal. Furthermore, authorised officers will be civil servants, obliged to follow the Civil Service Code, which requires that they act solely according to the merits of the case.

In response to my noble friend Lord Davies, I am more than happy, especially given the circumstances with our noble friend Lord Sikka, to write to him with all the points of the speech I would have responded with, and I am happy to share that with all Members of the Committee—that pertains to group 9.

I take the opportunity to reassure the noble Baroness, Lady Bennett. Will any roles be outsourced? No—we are clear that they have to be authorised officers as defined in Clause 66: they have to be civil servants.

I hope that, with those reassurances, noble Lords will not press their amendments and we can move forward to the next group.

[Baroness Finn (Con)]

My Lords, as I emphasised at the outset, across this group our amendments have been probing in nature, and I am grateful for some of the clarity that the Minister has given. We are seeking clarity, not confrontation. We are trying to establish whether the Government see the authority as a truly independent body with the authority to challenge where needed, or simply as a well-staffed extension of the Cabinet Office. In seeking those answers, we are also pressing for a model of governance that ensures effectiveness, credibility and accountability from day 1.

At the heart of our amendments is a simple but critical question: how do we make sure that the watchdog has teeth and is not quietly tethered by ministerial influence? Amendments 68E and 68F speak to the need for independence at the top through a chair who is genuinely independent, free to challenge, credible in doing so and accountable to the Minister. We know from other public oversight bodies that institutional trust starts at the top so, if the Government truly believe in empowering the PSFA to be a fearless voice in the fight against fraud, they should have no hesitation in embracing the modest strengthening of the governance framework.

Likewise, Amendments 69A and 69B ask fair and important questions about how the PSFA’s executive leadership will be chosen. We are not seeking to strip the chair of responsibility; we are asking whether there is a clearer, more robust process that would enhance the authority’s legitimacy and avoid the risk of it becoming either too insular or too directed from above. Ensuring that executive appointments are overseen by a group of independent non-executives, rather than a single individual, is possibly an act of good governance. I am grateful to the Minister for clarifying that the independent non-executive appointments will follow the guide for public appointments.

Amendment 71A, meanwhile, takes on a different but equally significant concern: the breadth of ministerial regulation-making powers over eligibility for authority membership. In a body designed to scrutinise government spending and investigate fraud, the power of a Minister to decide who is eligible to serve—and more worryingly, who is not—is a red flag. The Government may never intend to use this power in order to silence critical voices or to manipulate the composition of the authority, but the mere fact that such a power exists could undermine confidence in the PSFA’s independence. This amendment seeks simply to close that door before it becomes a problem; it should not really be necessary if the full OCPA guidance is being followed.

The final amendments in the group, Amendments 74A to 74D, reinforce the need for clarity, transparency and constitutional responsibility. Whether it is ensuring the timely publication of reports, safeguarding who may speak for the authority with the official seal or distinguishing between operational delivery and retained ministerial accountability, these changes are about shoring up the credibility of the entire framework. Together, these amendments ask the Government to take seriously the institution that they are creating.

I know that the noble Lord, Lord Sikka, did not move his amendments; I am grateful for the comments from the noble Lord, Lord Davies of Brixton. I want to take the liberty, if I may, of saying that a lot of what the noble Lord said chimes with the need for public accountability and transparency, as well as with a number of the points that we have been making. Although we recognise the vital importance of oversight, we have concerns that some of the amendments might create an unnecessary, burdensome framework that might impede the PSFA’s operational effectiveness; for example, the requirement for all meetings to be open to the public could present a significant operational concern. However, we understand the purpose and principle behind what the noble Lord, Lord Sikka, is trying to do.

Turning back to this group, these amendments ask the Government to take seriously the institution that they are creating. If the Public Sector Fraud Authority is to succeed—we all want it to—it must be allowed to operate with genuine independence, proper oversight and clear lines of public accountability. That is not bureaucracy or delay; it is simply how we build a body that the public can trust and on which Parliament can rely. We offer these proposals not to frustrate the Government’s ambition but to strengthen it by ensuring that this new authority is not only operationally capable but constitutionally sound. I urge the Minister to reflect on the questions asked and to work with us to ensure that the governance of the PSFA lives up to the seriousness of its mission. I beg leave to withdraw.

Public Authorities (Fraud, Error and Recovery) Bill

Debate between Baroness Finn and Baroness Anderson of Stoke-on-Trent

Committee stage
Monday 9th June 2025 Grand Committee

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

I beg the leave of the Committee to consider that; I will reflect on it and come back in due course.

[Baroness Finn (Con)]

I thank the Minister. I thank my noble friend for bringing up the “Tell Us Once” service. A lot of people have said that it has brought them a lot of comfort after a relative has died; if this service could be incorporated here, that would be very good indeed.

In this group of amendments, we have made the case that, although the objectives of recovering public money, tackling fraud and commanding support are not in question, as we have constantly reiterated in Committee, the mechanisms by which the Bill proposes to do so raise legitimate concerns that cannot easily be brushed aside. I emphasise that our amendments do not seek to frustrate the intent of the legislation; on the contrary, they are designed to ensure that the framework being created is legally sound and operationally effective.

We are talking about powers that will reach into people’s bank accounts and affect the relationships that they have with innocent third parties, whether they be joint account holders or dependants; I heard very clearly what the Minister said about joint bank accounts but there are still issues here that may have to be worked through or thought about. This is a significant undertaking on behalf of the Government, and it comes with a weighty responsibility to get the detail right.

Today, we have raised not theoretical issues but practical, real-life scenarios where the Bill, as it is currently drafted, could cause confusion, injustice or unnecessary distress. We have heard how a blunt formula could allow assets to be shielded or, worse, wrongly seized. We have pointed to the risk of leaving innocent third parties in the dark. We have also highlighted the critical importance of transparency when powers are exercised and challenged. I should say that, in terms of the innocent third parties in the dark, the “Tell Us Once” commitment is most welcome.

It is not enough to say that the Cabinet Office will act reasonably. The law must require the Cabinet Office to do so. It must give people the right to be informed, the right to understand decisions made about them, and the right to challenge those decisions with the benefit of clear reasoning and evidence. We are not opposing the principle of direct deduction orders. We are simply asking for a system that reflects the complexity of real people’s lives and relationships, and that recognises that justice must not only be done but be seen to be done. We believe, therefore, that these amendments are proportionate, constructive and necessary. They would not weaken the Government’s ability to recover funds; they would strengthen the public’s trust in how that ability is used.

I say again: we support the aim of the Bill but, if we are to ask the public to accept a system of such reach and impact, we owe it to them to ensure that it is as fair, clear and humane as possible. I believe that our proposals today are a step towards achieving just that, and I hope the Government will give them the serious consideration they deserve. On that basis, I beg leave to withdraw.

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

I remind the noble Baroness, Lady Fox, that what I actually said was that I did not want to speak on behalf of the banks. However, I find the word “coercion” a complete exaggeration and unnecessary. Just to clarify as well, the banks will not face penalties at any point in the Bill, unless I am to be corrected—and if I am wrong, I will correct the record. This is a process of trying to recoup government funds—taxpayers’ funds—to make sure that we get the money back. That is what we are trying to do and that is why this legislation is in place. We are working with the sector to make sure we can get our money back.

[Baroness Finn (Con)]

I think we all want to see a system that robustly tackles fraud against the public purse but that also recognises and respects the practical consequences of how it is delivered. The debate on the amendments in this group has shown that we need to be honest about the fact that in this Bill we are asking commercial banks to step beyond their core functions and dedicate staff time, infrastructure and internal resources to deliver outcomes for the state. When the public sector is asking the private sector to help to tackle public sector fraud, that is no small ask and should not be treated as such.

The noble Lord, Lord Vaux of Harrowden, and the noble Baroness, Lady Fox, have correctly highlighted the problems when you place onerous responsibilities on the banks in regard to a class of individuals. There is obviously a danger that it is going to make it less likely that vulnerable people can access services because the banks will just decide it is not worth the bother and will debank difficult or troublesome people. Those are very important areas to be worked through.

I really appreciate that the Government are still in discussions, but we are actually legislating here and now, and it is a bit uncomfortable that the discussions are obviously still ongoing while we are trying to refine the legislation. It would be good if we could keep this alive with what the banks actually want to conclude.

The amendments that we have proposed today on requiring due regard for cost, on ensuring review after implementation and on giving banks a voice in determining their recovery of the cost are all designed to introduce fairness, clarity and proportionality in what would otherwise be quite a heavily one-sided obligation. The amendments do not dilute the objective of the Bill, nor do they place unreasonable burdens on government. They recognise that the success of this policy depends on continued collaboration and good will from the financial sector, and that is something that cannot be taken for granted if banks are expected to absorb ever-growing public responsibilities without recognition or recourse.

We have heard much today about partnership in tackling fraud, but partnership requires reciprocity; it means listening, engaging and sharing responsibility—not simply offloading it. These amendments are an invitation to government to show that they understand that principle and to embed it in the Bill.

Before I finish, I thank the noble Lord, Lord Verdirame, for pointing the potential inconsistency in Clause 19, between subsections (4) and (10). We would be interested to hear how that will operate. This is not a question of principle—

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

Before the noble Baroness—I hope—withdraws her amendment, I need to clarify something, as I misunderstood the advice that I received from my Box. I need to apologise to the Committee and to make it very clear that there are penalties up to £300 a day that could be on banks —but it is more likely to be £300 under Clause 53, which is why we are working with them on guidance and why there are ongoing conversations.

[Baroness Finn (Con)]

I thank the Minister.

To conclude, these amendments are not on a question of principle, because we all support the purpose. It is a question of practicality and fairness and maintaining a constructive relationship between the state and the financial institutions on which it relies. I urge the Government carefully to reflect on that relationship and urge noble Lords to support the amendments in the interests of a Bill that is both effective and equitable. On that basis, I beg to withdraw.

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

My Lords, these amendments all relate to the determination of deduction amounts for regular direct deduction orders. Government Amendments 35, 36 and 37 amend Clause 23 to ensure that a regular direct deduction order from the Public Sector Fraud Authority must specify the amounts to be deducted. Government Amendment 43 is a consequential amendment to Clause 26.

Government Amendments 110, 111, 112 and 115 make an equivalent amendment for regular direct deduction orders issued by the DWP under Schedule 5 to ensure that the order must specify the amount to be deducted. These amendments arise from the continued engagement that we are having with representatives of the finance industry, as I said in the last group, and seek to address their concerns.

In this case, concerns were raised that the Bill potentially placed an unnecessary decision-making responsibility on banks and financial institutions—specifically, a duty that they may be required to provide or make a calculation of the amount to be deducted when receiving a regular direct deduction order. They requested that we remove these implied duties if it was the Government’s intent to always specify amounts to be deducted. As this is the intent of the PSFA and the DWP, we agree with the proposed suggestion to remove the references to calculations and make it explicit that government should always specify the deduction amount. These amendments achieve that under both parts of the Bill, address this concern and clarify the duties on the banks when making a regular direct deduction. I therefore beg to move the amendments tabled in the name of my noble friend Lady Sherlock.

[Baroness Finn (Con)]

My Lords, the government amendments in this group are in principle welcome. They sensibly seek to simplify deduction orders and ease the operational burden they place on banks—which, let us be clear, are intimately involved in enabling the exercise of the provisions in the Bill. However, the real issue here is not with the content of the amendments but with the process that led to their necessity. These changes are not minor corrections, nor are they are clarifications. They alter the way in which deduction orders function and work operationally. They exist because the Government have belatedly taken on board feedback from banks and financial institutions—institutions that clearly, and surprisingly, were not properly consulted before the Bill was introduced. As I said in the debate on the previous group, this raises serious concern about how the Bill is being developed.

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[Baroness Finn (Con)]

It is great to be having a dialogue with the noble Baroness. We welcome the Government’s amendments in this group which, taken together, amount to a series of technical clarifications and improvements to the Bill. As the noble Baroness said, they do not fundamentally alter the policy intent, but they help to tighten its operation, provide greater clarity and ensure that the provisions are more workable in practice. We broadly support these amendments and will not oppose their inclusion.

However, I note that even so-called technical amendments can have material consequences for those tasked with delivering the measures in the Bill—whether public bodies, private firms or individuals. It is important that any changes, however minor they may appear, are properly explained and fully understood by those affected.

I also take this opportunity to remind the Committee that, when a Bill is heavily reliant on secondary legislation and technical detail, as this one is, we must be especially vigilant in making sure that these fine-tuning amendments do not obscure bigger questions of transparency, proportionality and accountability. We will continue to keep a close eye on those issues as the Bill progresses. So, while we support this group of amendments, we urge the Government to maintain the spirit of openness and collaboration that they have shown so far as further changes inevitably arise, and to ensure that the cumulative impact of even minor adjustments is properly assessed. With that said, we are content to support these amendments.

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

I take this opportunity to thank the noble Baroness, Lady Finn, for both her engagement and support for this group of amendments and her wider engagement on the Bill.

While these amendments alone are relatively minor, together they reflect the importance of the ongoing consultation with key stakeholders, which is intrinsically linked with a desire to ensure that the legislation is as clear, precise and straightforward to implement as possible. The PSFA has consulted departments, public bodies, academics and non-public sector groups over many years of policy work to identify and resolve gaps in debt management powers across government. The PSFA has continued to work with stakeholders to consult on these powers as they go through Parliament and is committed to continuing to do so during implementation. We have listened directly to feedback raised by the financial sector and are taking the steps necessary to bring the clarity it seeks. I therefore hope that your Lordships will support these amendments.

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

My Lords, we recognise that there can be extenuating and difficult circumstances where someone has to take over another’s personal and financial affairs, such as making a power of attorney. Government Amendments 46, 61 and 121 clarify the role of a legal deputy with regard to the direct deduction order provisions for the PSFA and the DWP. These amendments follow our ongoing engagement with the financial services sector, which sought clarity as to how it would carry out a direct deduction order where a legal deputy has been put in place. We have benefited from the operational insight of the banks and have tabled this amendment to ease the operationalisation of the recovery powers.

Government Amendment 61 inserts an additional clause after Clause 36 to ensure that the provisions about direct deduction orders in Part 1 operate effectively where a person acts on behalf of an account holder by virtue of a power of attorney or as a court-appointed deputy. The amendment has the effect that any direct deduction order provisions and requirements have to be carried out by any legal deputies of the liable person, ensuring that recovery action can still proceed effectively.

Government Amendment 46 is a consequential amendment to ensure that the restrictions to prevent someone frustrating the direct deduction order will also apply to a person acting on behalf of an account holder.

Government Amendment 121 makes equivalent provision for the DWP as government Amendment 61 does for the PSFA. This brings clarity to the financial institutions that have to deal with deputies. It also brings protections to the liable person, ensuring that they are not unfairly given a non-compliance penalty if it is in fact their legal deputy who is not engaging with us on repayment or attempting to frustrate a deduction order. I beg to move.

[Baroness Finn (Con)]

My Lords, we welcome the Government’s amendment to make provision for cases where an individual with liability under the Bill has a person with power of attorney appointed to act on their behalf. This is a pragmatic step recognising that in some circumstances an individual may not be capable of handling their own financial affairs, whether due to age, illness or incapacity, and that there must be a clear legal route for compliance and communication to proceed.

It is right that, despite these circumstances, we should continue to recover public money that has been gained through fraud, given that adequate safeguards are in check, which I and my noble friend Lord Younger will address later in Committee. We therefore support the principle behind this amendment. It brings a degree of clarity and certainty to what could otherwise be a difficult area and ensures that the processes set out in the Bill can still function effectively when a liable person is not acting for themselves.

However, we wish to raise a concern which we hope the Minister can provide reassurance on. While this amendment provides for cases where a power of attorney exists, it does not appear to make provision for what happens when no such power is in place. In reality, there will be vulnerable individuals who may not have granted a power of attorney and who may also lack the capacity to manage their affairs independently.

In such cases, how will the provisions about direct deduction orders, as set out in Part 1, continue to operate effectively? Who is to be regarded as liable under the provisions in the Bill? Who will be entitled to challenge a notice or a penalty? Without a mechanism to address this situation, there is a risk that enforcement could falter—or worse, that it could proceed inappropriately without proper safeguards in place for the individual concerned.

We would therefore welcome the Government’s thoughts on how such cases will be handled in practice and whether there are plans to issue guidance or put in place safeguards to ensure that vulnerable individuals without formal representation are not unfairly affected by the processes introduced by this Bill.

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[Baroness Finn (Con)]

My Lords, I will speak very briefly on this group of government amendments which make a number of technical and definitional clarifications to the Bill. We on these Benches broadly support the changes in this group. These amendments serve an important purpose in tightening the language of the Bill and ensuring that the provisions are legally coherent, internally consistent and practically operable. We recognise the importance of ensuring that statutory language is as clear and precise as possible, not only for those who will be responsible for implementing these powers but also for those who may be subject to them.

In some cases, these amendments address minor inconsistencies in wording; in others they bring greater alignment between different parts of the Bill or between this Bill and the existing legislation. These are the kinds of technical improvements that are important to ensure that legislation operates as intended and we welcome the Government’s attention to detail in this regard. It is, of course, always preferable for such clarifications to be made earlier in the process—sorry to spoil it; it was getting too friendly—but we appreciate that, particularly in complex Bills such as this one, a certain amount of refinement is inevitable as the provisions are examined more closely by Parliament.

While there is no need to dwell at length on what are by nature technical changes, we support the amendments in this group and are pleased to see the Bill improved through their inclusion.

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

I thank the noble Baroness, Lady Finn. I simply end by stating again that the effect of these amendments is to clarify the drafting and remove redundant drafting that is already provided for. It is important that we have clear and precise legislation to aid implementation of these powers, all of which will be used to tackle the scourge of fraud against the public sector. Therefore, I hope noble Lords will provide their support to these amendments.

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

I apologise if I was not clear. My point was that internal reviews are already a normal process within government. HMRC, the DWP and the Child Maintenance Service already adopt them.

[Baroness Finn (Con)]

I thank noble Lords and thank the Minister for her response. The noble Baroness, Lady Fox, may feel that this is consensual camaraderie. However, I can assure her that, while I am very grateful to the Ministers on the Bench opposite for their constructive engagement, I do not think there was very much consensual in what I said in my Second Reading speech on the powers of the Cabinet Office and various other parts of the Bill. I really did emphasise that I was very concerned about junior civil servants being granted sweeping powers, with the reviews and redress being carried out merely by a higher-grade official—the noble Lord, Lord Verdirame, made that point—within the same department and not by an external body. The concern has always been that the Cabinet Office is appointed as investigator, juror, judge and debt collector. The individual affected has limited power to challenge the decisions, and then only after the damage has been done. I have been very clear, I hope, on those concerns and will be clear as we carry on going through the Bill.

This debate has laid bare a crucial flaw at the heart of the Bill, one which speaks not just of good process but to the principle of fairness, accountability and trust in government. We cannot expect the public to accept that legitimate and fair review decisions as impactful as a direct deduction order can be undertaken by the same department that made the order the first place. Our amendments in this group offer a simple, reasonable and principled solution that, when a request for a review is made, that review must be carried out by an independent person or body.

I take the point made by the noble Lord, Lord Palmer, in this regard that we refer to an “independent person” but in Amendment 59 we refer to establishing a body to serve as an independent reviewer, so we are probing at the moment on how that might be set up, rather than being specific. The point is the independence of the body or the person. This should not be a colleague or a coworker and not someone in the same chain of command. No system of justice can command public confidence if it allows a single team to be judge and jury in its own cause.

Let us be clear. We are not seeking to tie the Government’s hands or strip departments of their operational roles; we are proposing a balanced and proportionate framework that keeps Ministers accountable to Parliament but ensures that the initial decision is subject to meaningful independent scrutiny. That is a safeguard for the individual and for the integrity of the system itself. This matters because the consequences of these powers will be real—they are sweeping powers, as I have repeatedly said—and immediate for the people affected. If those people are to have any confidence in the fairness of the system, they must know that their right to request a review is not simply a paper exercise. It is not good enough to say that this will be a small team and the risks are manageable. In fact, the small size of the PSFA makes the case for independence even stronger. Close colleagues reviewing each other’s decisions behind closed doors is a recipe not for fairness but for suspicion and mistrust.

Our amendments, particularly Amendment 56, place a simple duty on the Minister to appoint an independent person or body when a review is requested. Amendments 57 and 58 ensure that that person can reach a clear conclusion to uphold, vary or revoke the order and that the applicant is told what the decision is. Amendment 59 provides a model for how such a reviewer might be appointed, with proper parliamentary scrutiny.

If we truly believe in the legitimacy of these powers, we must also believe in the legitimacy of the mechanisms that hold them to account. A fair and independent review process is a necessity. This is not just a procedural issue; it is a test of whether this Government are serious about wielding these powers with proportionality, care and respect for the people over whom they are exercised. The public will not trust a system that allows the Cabinet Office to mark its own homework, and nor should they.

These amendments provide a path forward—a way to deliver a fraud prevention system that is strong but just, decisive but accountable, and both effective and legitimate. I urge the Minister to accept this principle of independence and to adopt these proposals or some version of them as important measures which would improve the system of review that the Government have presented. On that basis, I beg leave to withdraw.

Public Authorities (Fraud, Error and Recovery) Bill

Debate between Baroness Finn and Baroness Anderson of Stoke-on-Trent

Wednesday 4th June 2025 Grand Committee

[Baroness Finn (Con)]

My Lords, I apologise for not congratulating the Minister for choosing to spend her honeymoon in these august surroundings. What better way?

At Second Reading, I highlighted the cultural problem with tackling fraud—that it is often safer to overlook than to uncover—so we have to change the culture and ensure that proper tackling of fraud is a cultural practice embedded within every public authority and government department. There is merit in creating a body with the powers to investigate fraud externally, but we need to make sure that proactive prevention and investigation into fraud start at home. Our Amendment 2 seeks to create an obligation for the Minister for the Cabinet Office to support public authorities in undertaking their own investigations into fraud when it occurs in said public authorities. In further developing the PSFA, the Bill provides us with a new resource and opportunity to support departments to intervene early and create mechanisms through which they can tackle this issue internally.

This objective has several key advantages. One major advantage is that this approach recognises that public bodies are complex, with unique funding mechanisms and operational procedures. Internal fraud teams bring intimate knowledge of these environments and have greater capacity to pursue targeted objectives, using knowledge that external agencies may lack. This allows for swifter detection of anomalies, targeted interventions and smarter use of data and insight.

Another significant advantage is that conducting internal fraud investigations inspires deterrence. Internal investigations can often begin before fraud escalates or becomes systemic. Timely action minimises losses and creates a departmental culture that stands more firmly against fraud. Not waiting for an external body to point out what has already gone wrong can embed a culture of deterrence and proactive interdepartmental counterfraud measures, which are an opportunity to minimise losses and therefore departmental damage.

Of course, internal investigation must never mean internal cover-up. The answer is not to sideline external oversight but to complement it. We must ensure that departments are equipped with the right skills, resources and authority to carry out investigations properly and that they are held to account when they fall short.

Our Amendment 24 seeks to strike this balance by requiring public authorities to conduct an internal review if they lose £50,000 or more through an overpayment or fraud, and to provide that report to the Minister for the Cabinet Office. This measure seeks to meet the benefits that I have just outlined, while embedding in law that responsibility for fraud cannot be outsourced. Authorities that lose money must take account of why this has happened and, fundamentally, they must also take responsibility for it. Making them accountable to the Minister is a mechanism through which we can achieve this.

I hope that the Government will consider supporting the amendments in this group, which seek to embed departmental accountability for fraud while utilising the resources of the PSFA to create intradepartmental cultures that deter and counteract fraud. I beg to move.

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

My Lords, if we continue at this speed, the Chief Whip will be disappointed that we are doing only seven groups. It is probably unlikely that we will continue at this speed, but I can aspire.

While I appreciate the comments from the noble Baroness, Lady Finn, I want to be clear that Amendment 2 is unnecessary as it is duplicative. It would insert “investigating”, as a way that the Minister can support other public authorities’ actions in response to fraud, separately from the explicit function of investigating if a request is made of the Minister by the public authority, which is earlier in the same clause. It is unnecessary because the word “tackling” in the same line of the clause cited covers any activity to support a public authority dealing with fraud and supporting them in their own investigations too. It is deliberately drawn broadly so, if adopted, this amendment would not change the scope of Part 1.

The Government’s intention with Part 1 is for the PSFA to become one of the ways that public authorities deal with fraud, by requesting that it take on a case for investigation, enforcement or recovery. The PSFA is also happy to support other public authorities in their own fraud investigations, and already does so. Which option is best will depend on the facts of the case.

Amendment 24 would require departments to conduct an internal review if, following a PSFA investigation, it is confirmed that they have lost more than £50,000 to overpayment or fraud. All losses at this scale should already be investigated and reported on. There are established audit, assurance and reporting processes for this.

In addition, the facts of the case would already have been established by the PSFA, and learnings taken from it will be shared on a cross-government basis to aid the prevention of fraud—hence the establishment of the PSFA within the Cabinet Office. This amendment would create an extra burden on each department and replicate the work of the PSFA, and is unnecessary as its core aim will already be addressed through other activities.

I hope that this explanation reassures the noble Baroness, Lady Finn, and that she can therefore withdraw her amendment. I expect that we will discuss more of this in great detail as we continue.

[Baroness Finn (Con)]

My Lords, I thank the Minister for her response. As we draw the debate on this group to a close, I thank all noble Lords who have engaged with the issues—so I thank the Minister. We are clear in our recognition that tackling fraud must go beyond enforcement. It must be a culture embedded across every public authority and government department. Although it is right that the Public Sector Fraud Authority must have the powers and resources it needs to act decisively, with these amendments we highlight that fraud prevention cannot and must not rely on external investigation alone. The work must begin within departments themselves.

Amendment 2 reflects our view that the Minister for the Cabinet Office should have a duty to support public authorities in carrying out their own investigations, and the amendment seeks to use the resources of the PSFA to encourage early intervention, the development of internal counterfraud capability, and ensuring that every public body has the tools to act on fraud swiftly and effectively to counter fraud at home.

Our Amendment 24, which would require internal reviews for significant losses, is a proportionate and reasonable step towards building a culture of accountability across the public sector. If a public authority loses £50,000 or more through fraud or overpayment, it is right that the public body must work to understand what went wrong, and it is right that it must explain this to the Minister. Without our amendment, we risk allowing the same mistakes to recur, with no mechanism for learning or redress within the public body itself.

Our amendments seek to promote a culture of responsibility. They seek to ensure that no department or authority sees fraud as someone else’s problem or as a matter that will simply be dealt with elsewhere. The message that these amendments send is clear: tackling fraud must begin at home. These proposals are balanced, targeted and grounded in practical experience. I hope the Government will reflect carefully on these points and consider working with us to embed this into the Bill. I beg to withdraw the amendment.

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

The noble Lord raises a very interesting point. It is in the guidance, but I will write to him so that he has a written record.

[Baroness Finn (Con)]

My Lords, I thank the Minister and repeat that to spend her honeymoon in this way is truly admirable.

Our proposal in this group is straightforward: that Clause 7 and the corresponding Schedule 1 do not stand part of the Bill. The powers set out in them are neither minor nor administrative; they are both sweeping and consequential, as the noble Lord, Lord Vaux, pointed out. They are powers to enter private premises, to search them in the absence of the owner, to seize property and to retain it indefinitely if deemed necessary.

Clause 7 permits junior civil servants in the Cabinet Office to apply for search warrants in connection with indictable offences. These officials, who are under no legal obligation to possess police-level investigative training or operational experience, would be empowered to enter someone’s property and seize anything they believe is linked to a criminal offence. They may seize computerised information. They may retain this property for as long as they consider necessary. These are serious powers. They are, in every meaningful sense, police powers, and we believe that it should be the police who exercise them.

That is not a theoretical objection; it is a practical one. If the Government believe that the investigation of fraud against the state demands this level of intervention, they should work with law enforcement to build capacity, not attempt to bypass it—as I said previously. The public expect these duties to be undertaken by the police, not officials from within the Cabinet Office.

We are not proposing an end to investigations by the PSFA—far from it. We recognise the importance of this work, and the Government’s own framing of this clause makes it clear that investigations can proceed substantially without the need for these powers. If that is the case, transferring this responsibility to trained police officers, rather than allowing civil servants to exercise it, would not hinder the PSFA’s ability to investigate fraud. It would ensure that intrusive state powers are exercised by those who are properly equipped to wield them.

This is a matter of constitutional balance and operational integrity. Clause 7 and Schedule 1 confer powers that go beyond the traditional remit of the Civil Service. They risk blurring the lines between executive authority and law enforcement. We therefore hope that noble Lords across the Committee, and the Government, will consider supporting this proposal as a measured change, keeping powers in the remit of those who are best placed to exercise them, while ensuring that PSFA investigations can continue in the pursuit of the objectives we all support.

Improving Cyber Resilience

Debate between Baroness Finn and Baroness Anderson of Stoke-on-Trent

Wednesday 21st May 2025 Lords Chamber

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

The noble Lord raises an important point. The NAO report was clear in its criticisms of our structures, and we accept every recommendation of the report. We are working our way through them, which is why we will be bringing forward a government cybersecurity strategy this year—building on the work of the previous Government—to make sure that we are fit for purpose. On the updating of IT, I have just lived through the updating of the printer system in the Cabinet Office. I would suggest that we take a bit of time with the next one.

[Baroness Finn (Con)]

My Lords, in November last year, media reports confirmed that the GOV.UK One Login service had been adopted by 50 government services, and that was expected to reach 100 within the year. However, Computer Weekly has since reported on serious cybersecurity vulnerabilities. Given that One Login processes biometric data from millions of citizens, why have the Government refused to publish their data protection impact assessment, and can the Minister confirm whether the rollout will continue on that timescale?

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

The noble Baroness raises a series of important questions. Given the detail of them, I will write to her, and make sure that I speak to relevant officials, so that she gets the answers that she seeks. On One Login, over 5 million people are currently using it to prove their identity, and the ID Check app has over 6.5 million downloads, and a 4.7 rating on all app stores. If there are questions to answer, I will make sure that we get her the answers.

Arm’s-length Bodies

Debate between Baroness Finn and Baroness Anderson of Stoke-on-Trent

Thursday 1st May 2025 Lords Chamber

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

My noble friend makes an excellent point. I assure your Lordships’ House that there is no way we will engage in this process with that approach. We want to make sure that we can deliver an agile Government, fit for purpose in the 21st century, with the people in the right places and the appropriate accountability to government departments. We want to do this in a way that respects and values the people who deliver our public services day in, day out. I put on record my thanks to the civil servants and public services doing everything to deliver for our country.

[Baroness Finn (Con)]

My Lords, the abolition of NHS England was a rare decisive move from this Government, but the Government’s actions on quangos do not match the rhetoric. The Government have admitted to being in the process of setting up 29 new bodies, as per the last Written Question, and these are the ones the Government are currently admitting to. Can the Minister explain how this is in line with the so-called bonfire of the quangos?

Government Supply Chains: Cotton

Debate between Baroness Finn and Baroness Anderson of Stoke-on-Trent

Thursday 24th April 2025 Lords Chamber

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

The noble Lord makes an excellent point on how we do it. It is about making sure that modern-day slavery is part of every conversation that is had when we discuss trade deals. I checked to make sure where my clothes came from before I came here today to make sure I was wearing clothes that came from areas that are not subject to modern slavery. Although I was genuinely worried about China, there were other countries on the safety list that I also needed to check. For the record, my clothes are from Turkey and Indonesia—I am fine.

[Baroness Finn (Con)]

My Lords, this side of the House supported the excellent amendment from the noble Lord, Lord Alton of Liverpool, to the Great British Energy Bill. We welcomed the Government’s decision to listen to the noble Lord and to commit to amending the Bill. Does the Minister agree that this sets a direction for Ministers across government to follow?

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

I absolutely do.

House of Lords (Hereditary Peers) Bill

Debate between Baroness Finn and Baroness Anderson of Stoke-on-Trent

Committee stage
Tuesday 25th March 2025 Lords Chamber

[Baroness Finn (Con)]

My Lords, I start by making it clear that we value the contributions of all noble Lords in this House, regardless of whether they have served as Members in the other place or as special advisers in government. I say this with a smidgen of self-interest, as a former special adviser myself, and in full awareness that my noble friend Lord Parkinson of Whitley Bay served as special adviser to my noble friend Lady May of Maidenhead, who, of course, is not only a former Member of Parliament but a former Prime Minister. Your Lordships’ House benefits a great deal from their service, as it does from many others who have come from the other place or through government.

None the less, these amendments raise the interesting question of what this House is for. It is reasonable to consider the broader experience that we need to fulfil our responsibilities. It is important that this House remains a distinct second Chamber and that we do not blur the lines between the two Houses.

Your Lordships’ House benefits from a large membership with broad experience and expertise, whether from former Members of Parliament or otherwise. The House of Lords Library has produced useful research in this area, which tells us that 21% of noble Lords have previously served as MPs in the House of Commons; that is 181 former MPs. Unfortunately—or perhaps fortunately—the House of Lords Library does not readily provide information on the number of former special advisers, but, as we know, there are at least three of us in the Chamber this evening. I understand why some noble Lords might consider a cap on the number or proportion of ex-MPs and special advisers, as proposed by my noble friend Lord Parkinson of Whitley Bay’s amendments, to be beneficial and to ensure a balance of perspective and experience in your Lordships’ House.

The expulsion of our hereditary colleagues would deprive us of a huge amount of private sector experience, which cannot easily be replaced. The Bill stands to exclude chartered accountants and surveyors, the former president of the Heavy Transport Association and a former managing director of Paperchase. They are among many more examples of businessmen, entrepreneurs and industry titans whose perspectives we will greatly miss. We should not take their experience and expertise for granted; it is vital for the scrutiny of legislation that affects businesses, markets, industry, workers and employers alike, and our wider economy, that our private sector is properly represented by those who know and understand its operation.

Of course, having a background in politics does not preclude one from having other types of experience. Indeed, it is valuable experience in itself. Some of our most effective Members are those who have been here the longest and who have learned over the years how to get things done within Parliament and across government—critical skills in a legislative Chamber.

The other suggestion that we have discussed is what I consider a cooling-off period, as proposed by my noble friend Lord Parkinson’s Amendment 87. It is an interesting suggestion that might alleviate an external perception of political patronage and perhaps lighten the pressure on Prime Ministers to confer such patronage. However, I do not believe that it would be right for this House to limit the ability of a democratically elected Prime Minister to make the appointments that they wish.

As my noble friend pointed out, these amendments cause us to consider the House of Lords as our second Chamber. We fulfil a role that is very different from that of the other place. We have the time and ability to scrutinise and revise legislation in a way that the House of Commons does not, while respecting the will of the elected House. This House is one of the highest-quality revising Chambers in any democracy, and it is a role that the House rightly takes very seriously.

Your Lordships’ House has a constructive, consensual way of doing things. It should desist from becoming more party political and more like Punch and Judy than noble Lords are used to. We should be wary of any such trends. Your Lordships’ House works best when we treat each other with respect, making revisions and posing questions constructively. One of the many negative effects of losing our hereditary Peers is that we will lose a great number of those who act as the custodians of the conventions and manners of this House.

To conclude, I do not support the literal interpretation of the amendments in the name of my noble friend Lord Parkinson of Whitley Bay, but I understand and sympathise with the intention with which they were tabled. We welcome the contributions and experience of all noble Lords, but it is right that we should reflect on what we will lose with the removal of our hereditary colleagues. It is also right that we reflect on the unique role that your Lordships’ House has in our parliamentary democracy and the need for us to uphold our distinct customs and conventions to continue that role. I thank my noble friend for giving us the opportunity to reflect on and debate these thoughtful proposals.

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

My Lords, this is an intriguing set of amendments, particularly given the professional experience of the noble Lord, Lord Parkinson of Whitley Bay. I declare my interest as a former Member of Parliament myself. I hope, as far as the noble Earl, Lord Attlee, is concerned, that it would be my stratospheric reputation that earned my place here—

Public Sector: Working From Home

Debate between Baroness Finn and Baroness Anderson of Stoke-on-Trent

Thursday 20th March 2025 Lords Chamber

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

The noble Lord raises an important point. I think most of us in your Lordships’ House benefited from being in workplaces so that we could be mentored and learn from people who are more experienced—I definitely do every day in your Lordships’ House. In terms of making sure that people are working in the office, the easiest example for me to give is the Civil Service. Civil servants are now required, as the previous Government established, to work 60% of their time in office environments to ensure that institutional knowledge is passed on from new starters to those more experienced but also for those more experienced to learn from new approaches to the world in which we live.

[Baroness Finn (Con)]

We heard what the Minister said about working with the unions. Last month the FDA Civil Service union published its findings that almost two-thirds of the staff it surveyed felt that having to work in the office three days a week decreased their productivity. Will the Minister confirm whether the FDA’s findings tally with the Government’s own official analysis of the impact of the three-day in-office rule?

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

My right honourable friend in the other place Pat McFadden has been clear that we want to ensure that people are working in the office. We genuinely believe that there is social capital developed from having office-based approaches, and we are committed to retaining 60% of staff in the office during their contracts. We should also reflect on the fact that one of the opportunities that this has given the state is that we have been able to consolidate the estate, one example of which is 1 Victoria Street, which was recently sold, leading to annual savings of £30 million. This gives us an opportunity in terms of hybrid working but also to ensure that we are getting value for money for the public purse.

Council of the Nations and Regions

Debate between Baroness Finn and Baroness Anderson of Stoke-on-Trent

Wednesday 27th November 2024 Lords Chamber

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

I thank the noble Baroness for her question. Work is under way. This is about how devolution works, and therefore there will not be one person who announces that. We are working with each devolved authority to make sure that any changes and updates to the MoU on the Sewel convention work for all devolved Governments and will report in due course.

[Baroness Finn (Con)]

My Lords, can the Minister assure the House that the council’s activities do not duplicate existing structures or initiatives, particularly in relation to devolution agreements and inter- governmental relations? Is clear value for money therefore provided by the council for taxpayers across the United Kingdom?

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

My Lords, I think it is fair to suggest that, for the last 14 years, there have been challenges in conversations between devolved Governments and mayors and the Government. That has not benefited economic growth in any corner of our country. This is to fix that and is therefore value for money. On the substantive question of where the Council of the Nations and Regions fits into intergovernmental relations and bodies that already exist, all those bodies exist because of conversations that have happened with the devolved Governments, so we are working with them to make sure that this structure, and future structures, will work for them to deliver for the people of every corner of our country.