Public Authorities (Fraud, Error and Recovery) Bill

Kirsty Blackman Excerpts

Wednesday 5th November 2025 Commons Chamber

[Andrew Western]

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

[Kirsty Blackman (Aberdeen North) (SNP)]

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

[Andrew Western]

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

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

--- Later in debate ---

[John Milne (Horsham) (LD)]

Everyone accepts that we need to keep a handle on fraud, but the powers being taken in the Bill, including DWP access to people’s private bank accounts, go much further than anything we have seen in the past. Can we trust the DWP to exercise these sweeping new powers in a fair and responsible way? Unfortunately, past DWP errors have had the most tragic consequences.

Philippa Day was 27 years old when she died. She was found unconscious next to a letter from the DWP refusing her request for an at-home assessment. Philippa had agoraphobia and anxiety, making it impossible for her to attend a personal independence payment assessment in person. Those at the DWP knew that—they were told by her sister, and they would have been told by her mental health team if they had bothered to speak to them, but they did not. The letter by her side was the last of a long back-and-forth exchange with the DWP. During their final conversation about the DWP, Philippa said to her sister, “I’m done trying to fight them.” But why was she having to fight them in the first place? Surely this is a system that was designed to help.

The coroner’s report identified 28 separate failings by the DWP and its private assessor, Capita. Errors were made from the very outset: her PIP claim form was lost, her mental health needs were not logged, and no attempts were made to communicate with her mental health team or her GP to ensure that the very system designed to help her would do just that. It is easy to see, with a system riddled with errors and seemingly devoid of compassion, how someone could be driven to just give up the fight. Philippa wrote:

“I’m not dying because I’m suicidal... I’ve been so trapped for so long, and then comes along the government people, who I had assumed are there to help. Since January the 11th 2019 my benefits have been severely cut”.

I also want to share with the House what happened to Kristie Hunt. Kristie was training to become a nurse. She was 31. She had been on PIP and employment and support allowance until she rejoined the workforce after 13 years—admirable, considering her struggles with mental health. She, like Philippa, was basically a strong person.

Kristie informed the DWP about her return to employment, but staff forgot to log her call, so Kristie was hounded by calls and letters from the counter-fraud team. The DWP even sent incorrect information to her local council, resulting in further letters and threats of losing her home. For months, Kristie was subjected to erroneous accusations of fraud and threats of losing her flat and the life she had fought so hard to build back. On her final call with the DWP, she was noted as being confused and tearful, yet no one even asked whether she was okay. No one flagged concerns for her welfare. All they wanted was the money.

Kristie is an example of a person using the system that was designed to support her back into work, but was instead the victim of mistake after mistake. There are many others I could describe: Karen McBride, Stephen Carré, David Holmes, David Clapson, Errol Graham, Kevin Gale, Jodey Whiting, Roy Curtis and James Oliver. All of them were wrongly hounded by the DWP, which at least contributed to their deaths.

It does not reassure me that part of the name of this Bill starts with “Fraud”, when the biggest cause of overpayment is departmental error. The DWP has a long track record of badly handled mistakes. That is a cultural failing, and it is wildly optimistic to assume that everything is suddenly going to be fine going forward. Do the Government really believe that this Bill has enough checks and balances to protect vulnerable claimants? One thing is for sure: there will be more DWP mistakes.

Going forward, I would ask that the Government commit to making coroners’ reports automatically available to the public in every case where there is a link to the DWP’s actions.

[Kirsty Blackman]

It is not easy to follow that excellent speech. I really appreciate the hon. Member for Horsham (John Milne) reading out the names of people who have been failed by the system that was meant to support them—and we should remember that the system is what failed them. As he said, in a number of cases they were incredibly strong people who had fought through adversity but were then failed by the system. A significant number of disabled people have had to fight for so much of what they have. They have had to fight every day just to manage to get to work or get to the shop. They have had to fight for so much, and the system that is meant to support them should not then be another battleground.

I want to talk about a number of different things in the Bill, but I will start with the fact that this is not a happy Bill and the SNP does not support it. We are unhappy with a significant proportion of the Bill’s direction of travel, such as on the eligibility verification, not least because of the potential future risks. I said to the Conservatives when they were in government, and I will say again now that the Labour party is in government, that you will not be in government for ever. At some point, somebody else will be in government, and if it is somebody who shares the authoritarian ideas of some potential future leaders, I am not sure that I want them to have access to everybody’s bank accounts.

We need to look at the proportionality of accessing universal credit claimants’ bank accounts to see if they are committing fraud. I wonder what proportion of universal credit claimants defraud the system, compared with the proportion of billionaires who defraud His Majesty’s Revenue and Customs and do not pay the level of tax that they should be paying. I do not think it is proportionate for us to say that universal credit claimants need to have their bank accounts looked at because they are likely to commit fraud, whereas people who earn millions and millions of pounds and store it in offshore trusts do not have exactly the same constraints put on all the many bank accounts that they may have.

It is disproportionate for us to assume that social security claimants are more likely to defraud the system than anyone else, especially given that we have significant levels of proof that other people do defraud the system and that a significant number of the errors made—through overpayments, for example—are made by DWP itself, rather than by the claimants. The hon. Member for Poole (Neil Duncan-Jordan) talked about elements of Lords amendment 43 and vulnerable individuals who may be disadvantaged. If we could trust that DWP never or very rarely makes mistakes, I could understand the Government putting forward this Bill. From the written-down facts in coroner’s reports, and from all our constituency casework, we know that DWP makes mistakes. I am not blaming individuals at DWP for making those mistakes; there are sometimes systemic failures and sometimes individual failures. Mistakes are made at DWP, and adding both another layer of places where it can make mistakes and a further ability to sanction people—for example, by taking their car away or looking at their bank accounts—will not be proportionate until DWP is much less likely to make mistakes and to greatly overpay carers, for example, and then attempt to claw back the money. The Government need to get the Department in order before taking action against individuals. I understand that there are people who defraud the system—I am not doubting for a second that that is the case—but, as the hon. Member for Horsham said, putting the word “error” first might have been helpful, given that a significant proportion of the money that is overpaid is due to error.

I turn to the costs and savings mentioned in Lords amendment 43, on how much it costs to recoup money and to undertake an investigation in order to see whether somebody is defrauding the system. We know that a school meal debt system was set up, and we have had bailiffs at people’s doors looking for under £10 of school meal debt. Sending a bailiff to somebody’s door for under £10 involves a disproportionate cost, and I hope that everybody in this room thinks that we should not be spending so much money, and upsetting somebody’s life that much, for the sake of £10. If a person cannot afford to pay £10 of school meal debt, they have pretty significant problems, and sending a bailiff to their door is not going to help. We only know about some of these bailiff situations because they have been brought to MPs, or because they have been reported by various organisations. Aberlour Children’s Charity has done a huge amount of amazing work on public sector debt and some of the methods that are used to recoup that money. The Government should have to report whether it costs a disproportionate amount for us to ensure that we are not paying out a very small amount. I think it is completely reasonable for that question to be asked.

I think it is completely reasonable as well—the hon. Member for Poole talked about this—to think about vulnerable groups and whether they are overly disadvantaged by the system being put in place. Will people with learning difficulties, specific mental conditions and physical disabilities, and those from certain minority communities that are already marginalised, for example Gypsy Travellers, be specifically disadvantaged by the changes? All Lords amendment 43 asks is for reporting to ensure that those vulnerabilities, if there is an entrenchment of inequality and an increase in the disadvantage faced by people, are reported on, so we aware of it and there is transparency, and so we can see that it is creating a significant additional disadvantage on an already vulnerable and marginalised community. I would therefore really appreciate it if the Government agreed, rather than disagreed, with Lords amendment 43.

Finally on Lords amendment 43, the amount of money proposed to be saved by the Bill in its entirety—the total amount of savings—is, I understand, £1.5 billion. Governments of all colours are monumentally bad at reporting back on how much savings have been achieved by any of the measures they put in place on just about anything. Unless a tax is hypothecated, for example, we do not see exactly how much money is saved or exactly how much money is spent, and whether it delivered what was promised by the Government. Again, it is Governments of all colours who do not do post-implementation reviews in the right amount of time, and when there is a change of Government they sometimes just forget that post-implementation reviews exist. We will not know with any level of accuracy, unless we get proper reports on costs and savings, exactly how much money is saved and whether the Government have met their target or expected amount of £1.5 billion, so I have significant concerns.

I appreciate the Minister’s answer to me on Lords amendment 84. I had not understood what he had said originally on his position on Lords amendment 84 and the answer he gave me in response did clarify his position. I do not agree with his position, but I now understand why the Government hold that position. I still think it would be important to ensure there are things in place other than the EVM. I understand the Government want a little bit more flexibility and that they are saying they have to look at all the other information they hold. It is possible that the DWP may not hold any more information or may hold very little more information. Therefore, the decision to initiate a fraud investigation could be taken almost entirely, if not completely entirely, on the EVM. That is why I still disagree with the Minister’s position.

I would like a requirement for the DWP to have more than just that one piece of information. My understanding is that that was what Lords amendment 84 intended to do in the first place, but I appreciate that other amendments in lieu have been tabled by the Government to provide a little more clarity on what is expected. I would expect them to look at all the information provided, as the Minister said. I am just concerned that they may not hold lots of information, and a requirement to look at all the information they hold when they only hold one piece of information gets us back to the situation we were in at the beginning, where it could hinge on one thing rather than looking at a wider suite of things.

Generally speaking, Madam Deputy Speaker—I will sit down in just a moment—the SNP is not in favour of the Bill. We have significant concerns. If the Minister, when he responds, confirmed that the Government will do as much as they can on transparency, and that they will report back on the level of costs and savings that are created by the Bill, that would give me a measure of comfort. I still will not support the Bill, and I might still vote against some of the amendments tabled today, but I think it would make Members from across the House a bit more comfortable to have a better understanding of what is happening and whether the Bill is working as the Government intend.

[Madam Deputy Speaker (Judith Cummins)]

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