Public Authorities (Fraud, Error and Recovery) Bill

Lord Bishop of Leicester Excerpts

Report stage
Tuesday 21st October 2025 Lords Chamber

I hope that my noble friend the Minister can give us some assurances along the lines suggested by the noble Lord, which would mean that he does not feel it necessary to press the amendment.

[The Lord Bishop of Leicester]

My Lords, I am pleased to have added my name to this amendment. As this is the first time that I have spoken at this stage, I want to thank the Ministers for their careful consideration of the concerns raised by noble Lords, as well as all those who have engaged with such diligence on this matter. For the record, this is an important Bill. Attempts to commit fraud will not stop as a result of this Bill—that will never be possible—but it will be far harder for those making these attempts, and that is absolutely right, as is the ability to recover overpayments.

The principles behind this amendment are fairness in the face of the various reasons for an overpayment being made, including error by the department, and affordability, ensuring that those already in poverty are not pushed further into it. Let us remember who will bear the brunt of these new powers: people who are reliant on benefits, which independent research suggests are already insufficient to meet people’s basic needs. With the requirement to pay off their debts via universal credit deductions of up to 15% of the standard allowance, there is a real risk that many will, I fear, be pushed even deeper into poverty.

It is not a trivial number of people who will be affected. According to a DWP Freedom of Information Act response in 2023-24, nearly 900,000 new overpayment debts were entered on DWP’s debt management system, nearly 80% of which were recorded as caused by official error. The amendment before us offers a constructive path to stop people being pushed into even more precarious circumstances. By introducing a clear limit on how far back overpayment recovery can go, it would bring predictability and restraint to the process. People should not live in fear that an administrative slip-up made a decade ago will suddenly resurface as a bill they cannot hope to pay. Other areas of law recognise the principle of limitation periods and so should we here. Equally, by requiring an affordability assessment, the amendment would ensure that any repayment plans are fair, sustainable and consistent with human dignity. This is for the good of the individuals but also of the Government. If the state appears heavy-handed then confidence in the integrity of our welfare system, which is the thrust of this whole Bill, is undermined.

The amendment would not weaken the fight against fraud. It does not seek to excuse dishonesty or to diminish accountability. It seeks to uphold the Government’s stated objective of ensuring that recovery of overpayments is done in a fair and affordable way. I urge the Minister to take these concerns into account, in particular the suggestions of the noble Lord, Lord Verdirame, on how these concerns can be addressed practically. I, like others, will not be pushing for a Division on this matter, but I seek real reassurance from the Government.

[Baroness Finn (Con)]

My Lords, I speak in strong support of this amendment, so ably tabled by the noble Lord, Lord Verdirame, and supported by the noble Baroness, Lady Lister, and the right reverend Prelate the Bishop of Leicester, and to which I am pleased to have added my name.

The amendment speaks across so many of the principles that have underpinned our debates and the position that we on these Benches have adopted throughout Committee and Report—fairness, proportionality, transparency and responsibility. This amendment is about finding this balance and ensuring that the recovery of overpaid public funds is carried out in a way that is both effective and humane.

We have been clear from the outset that we support the core objectives of this Bill. Public money that has been wrongly paid out, whether through error or fraud, must be recovered. We owe that duty to the taxpayer and the integrity of our public finances. Equally, it is a duty of government to ensure that such recovery is done in a way that is fair, measured and responsible, does not impose unnecessary hardship, recognises the realities of individual circumstances and upholds confidence in the system.

This amendment embodies precisely that balance. It would establish clear and necessary safeguards before deductions are made from a person’s benefits. It would require that the liable person be notified of the rate and the basis of deduction, and, crucially, that they be given the opportunity to make representations about affordability. It would insist that deductions should proceed only where the Secretary of State is satisfied that recovery will not cause hardship in meeting essential living expenses and that the process is fair in all circumstances, including where the overpayment may have arisen through official delay or error. Sensibly, it seeks to sets a six-year limit for recovery, in line with the limitation period that applies through the courts. In other words, this amendment would ensure that the state exercises its right to recover the money in a way that is just, proportionate and accountable, and would align the recovery of overpayments through benefit deductions with the very same principles of fairness and restraint that we have already built into Schedule 5 in relation to deductions from bank accounts.

Throughout our scrutiny of this legislation, we have repeatedly emphasised that good governance is not simply about having the power to act but about exercising that power responsibly. This amendment reflects that philosophy perfectly. It strikes the right equilibrium between fiscal responsibility and social justice and between protecting the taxpayer and those who may already be in vulnerable situations. I thank the noble Lord, Lord Verdirame, for bringing forward this thoughtful and well-crafted proposal. It would strengthen the Bill, give legislative effect to the principles of transparency, fairness and proportionality, and ensure that, in pursuing the legitimate goal of recovering public funds, we do so in a manner that remains worthy of public trust. This is a measured, sensible and responsible amendment and we are very pleased to support it. I hope the Minister will give welcome assurances on it.