Public Authorities (Fraud, Error and Recovery) Bill

Baroness Spielman Excerpts

2nd reading
Thursday 15th May 2025 Lords Chamber

[Baroness Spielman (Con) (Maiden Speech)]

My Lords, like so many who have stood up here for the first time, I am profoundly aware of the privilege it is to speak here and of the importance of using that privilege responsibly and well, for the public good. I have much to learn from all noble Lords.

I am especially grateful to my supporters and my mentor—the noble Baroness, Lady Wolf of Dulwich, and my noble friends Lord Finkelstein and Lady Bloomfield of Hinton Waldrist—and many other noble friends. I am beginning to understand the strength of collegiality and mutual support that characterises this House, and I hope that I will succeed in upholding this.

I sound very English, and I bear a German surname, but I come here with connections to many parts of the UK. My father was English, from the Midlands, and my mother is Irish. I was brought up in Glasgow, though I lost my childhood accent when I came south to study. I also came to know something of Wales over seven fascinating years on the board of the Wales Millennium Centre.

I am here because I have spent over 20 years working in the interests of children and young people. After some years in investment banking, I recognised—slightly belatedly—that my real interests lay in education above all else. I spent seven years as part of the founding management team at Ark Schools, an excellent academy trust, then nearly seven years as chair of Ofqual, the exam regulator, overseeing a full programme of qualification reforms. Most recently, I served for seven years as Ofsted chief inspector, where we made an inspection model based on professional dialogue, grounded in evidence and emphasising educational substance and integrity.

It may be a surprise that I am making my maiden speech on this Bill, but Ofsted inspects many services for children and young people and, in some cases, regulates them too. In its work, Ofsted sees many excellent things: often great services run by principled and highly skilled people, but also things that we would all wish did not happen and tend to avoid talking about, including fraud. More generally, Ofsted does sometimes have to report findings that are profoundly uncomfortable for those whose failings are exposed.

Incompetence is one dimension; ethical slippage is another. I use that term because fraud, which is the main focus of this Bill, sits at one end of an ethical spectrum. Some behaviour can be considered unethical to a greater or lesser extent. For example, it is worrying when the interests of children are subordinated to those of adults, contrary to the principles that underlie the policies of successive Governments. It is not criminal, but it can harm children. It is shocking that there are a few people in control of children’s education and welfare who choose to operate outside the law, sometimes even after a criminal conviction for the same offence. When ethical slippage is normalised, it becomes harder for other adults to sustain their own purpose and integrity. Cultures are corroded, and actual fraud becomes more likely.

To spell it out, when people see others around them successfully cheating a system, at least three bad things happen. First, and most immediately, it gives people an incentive to join the cheaters. This costs the public purse and the taxpayers who fund it.

Secondly, it corrodes mutual trust in communities. A sense of community derives in large part from a social contract founded in reciprocity: if we no longer believe that those around us will contribute to mutual support when they are able and draw on support only when they need it, we lose some of our sense of community. My noble friend Lord Finkelstein wrote very well about the importance of reciprocity in the Times this week.

Thirdly, we become cynical about public authorities if we see them as incompetent and ineffective at preventing, detecting or sanctioning the behaviours that are undermining our sense of community. A loss of confidence in public authorities is destabilising for government and hard to redress. Low mutual trust in communities and in government is not conducive to individual happiness.

All this makes it important to address fraud and error promptly and effectively, and I welcome the efforts of successive Governments to strengthen this work. Deterring fraud requires a high likelihood of detection, as well as meaningful sanctions where fraud is found.

I will not repeat what has been said by others today, but important points have been made. I will make a few observations from my own experience, having had ultimate responsibility for the regulatory sanctioning process in a range of cases.

The protections for individuals are, of course, very important, but they must be proportionate and properly balanced with a legitimate public interest of deterring and sanctioning fraud. Where protections are extensive and elaborate, the complexity and cost of taking a case of suspected fraud through to its conclusion are high. This can contribute to the creeping inertia highlighted by my noble friend Lady Finn.

For individuals, those strong protections can mean longer processes, and protracted processes are in themselves more stressful at the receiving end. If it becomes even more expensive to investigate a case, public authorities are forced to prioritise the most blatant and expensive cases over lesser and more marginal cases. For example, where the total loss from a fraud is small in absolute terms and where any meaningful recovery is unlikely, it is harder for a public body to justify the cost of investigation and lesser cases are pushed down the queue. Yet inaction in the lesser cases—the broken windows, if you like—still triggers the undesirable social and economic consequences that I have already talked about.

The aggregate benefits and costs of embedding strong individual protections must therefore be regularly reviewed and weighed against the wider public interest, not just in financial terms. This should, of course, include regular system-level sense-checking, and swift adjustment of schemes and processes where needed.

The agencies and bodies that do this difficult work have to be well supported. Among the millions of decisions made by public authorities, there will always be difficult and borderline cases. Where, say, a claim in such a case is properly refused, it can be easy for a disappointed claimant to paint the public body and the individual decision-makers as soulless and unfair. Yet that authority and its staff should not be casually vilified. True fairness to all citizens, young and old, and maintaining that all-important social contract, depends on those people having the skills and confidence to make those difficult calls—humanely but without partiality.

I emphasise to noble Lords that the success of these well-intended reforms depends on collective support for the people who carry them through. Without this, the reforms could come to little.

To end, I thank your Lordships for listening to me. My watchwords in my previous life were “substance and integrity”, and they will continue to be my watchwords here.