Public Authorities (Fraud, Error and Recovery) Bill (Ninth sitting)

Neil Coyle Excerpts

Committee stage
Tuesday 11th March 2025 Public Bill Committees

[The Parliamentary Under-Secretary of State for Work and Pensions (Andrew Western)]

It is a pleasure to serve under your chairship, Mr Western. With your permission, I will speak to amendment 37 before speaking to amendments 38 to 42. I will then speak to why the unamended clause 75 should stand part of the Bill.

Before I begin, I will respond to a couple of the comments made by the hon. Member for Horsham on the relatively small amounts of fraud and error we see. With this particular measure, as he is aware, we are initially targeting the three benefits with the highest levels of fraud and error. To take universal credit as an example, it is £1 in every £8 spent, which is a tremendously high number and one we must do everything we can to bring down. However, it is worth recognising and explaining to colleagues that the measures in the Bill are part of a broader package to tackle fraud, which reached £8.6 billion across the relevant period. This is not the beginning and end of the Department’s work on fraud across that period, but it is the part of that overall package that requires legislation.

Returning to my substantive notes on the question of a “board” versus a “person”, I think there may be some misunderstanding of definitions here. Amendment 37 seeks to oblige the Secretary of State to consult a relevant Committee of the House of Commons before appointing the independent overseer of the eligibility verification measure. I believe that the amendment is unnecessary and I will be resisting it.

We recognise the importance of appointing the right person or body to oversee the use of the eligibility verification measure. That is why we have made it a requirement that the overseer report annually on the use of the power directly to the Secretary of State, who will then lay the report before Parliament. We have included that key safeguard to ensure the effective and proportionate use of this power and to introduce greater transparency in the use of it. The person or body will be appointed following a fair and public recruitment process, which will be carried out under the guidance of the Commissioner for Public Appointments.

I assure the Committee today that we will abide by the governance code on public appointments throughout the process. Whether this role is subject to pre-appointment scrutiny will be governed by the code, and we will follow its guidance at all times. The final decision on who will oversee this measure will, in all cases, be made by the Secretary of State. That is because the governance code on public appointments points out:

“The ultimate responsibility for appointments and thus the selection of those appointed rests with Ministers who are accountable to Parliament for their decisions and actions.”

We will keep the House informed about the process at all key stages, including when the process is set to begin and on the proposed final appointment.

[Neil Coyle (Bermondsey and Old Southwark) (Lab)]

Am I right in thinking that the Work and Pensions Committee will be entitled to call any witness, including whoever is appointed to this role, to give evidence to it and to be scrutinised by its members?

[Andrew Western]

My hon. Friend is entirely correct. The Select Committee always has that power, and were it to have any concerns whatever, it would look to exercise that power at the earliest opportunity.

I recognise that the amendment has been tabled with good intentions. However, because of our commitment to an open and transparent recruitment process, and because we will be abiding by the requirements of the governance code on public appointments, it is unnecessary and I will resist it.

I will now turn to amendments 38 to 42, which seek to remove the term “person” and insert the term “board” in reference to the appointment of an independent reviewer of the eligibility verification measure, as set out in clause 75. I recognise the intent behind the points raised, but the amendments are unnecessary and I will resist them. It is probably useful to clarify that, legally, the term “person”, as referred to in the clause, can refer to an individual person, a body of people or a board, as per the Interpretation Act 1978. I therefore reassure the Committee that any reference to “person” in the Bill includes a body of persons, corporate or incorporated, that is a natural person, a legal person or, for example, a partnership.

I reassure the Committee that the Secretary of State will appoint the most appropriate and suitable independent oversight for the measure. That might be an individual expert, which is consistent with the approach taken for oversight of the Investigatory Powers Act 2016, or it might be a group of individuals who form a board or committee. As the Cabinet Office’s governance code on public appointments clearly sets out, Ministers

“should act solely in terms of the public interest”

when making appointments, and I can assure the Committee that we will do just that.

To offer further reassurance, I confirm that the appointment process for the independent person or body will be open, fair and transparent, adhering strictly to the governance code on public appointments, which ensures that all appointments are made based on merit, fairness and openness. The Government will of course notify the House of the appointment. I therefore resist these amendments.

I will now turn to clause 75. Independent oversight is one of several safeguards for the eligibility verification measure, and I remind the Committee of the others that we discussed on Thursday. First, we are initially pursuing the measure with just three benefits in scope. Others can be added by regulations, but not, in any circumstances, the state pension, which is specifically excluded from the Bill. Furthermore, limits on the data that can be collected are set out in the Bill. For instance, no transactional data or special category data can be shared. Finally, as we discussed at length on Thursday, a human decision maker will be in place to determine whether any fraud has been committed.

Clause 75 provides a vital safeguard for the eligibility verification power. By inserting proposed new sections 121DC and 121DD into the Social Security Administration Act 1992, it establishes a requirement for independent oversight of the power, to ensure accountability, compliance and effectiveness. We recognise the importance of safe and transparent delivery of the eligibility verification measure, which is why we are legislating to make it a requirement for the Secretary of State to appoint the independent person to carry out annual reviews.

As per proposed new section 121DC(2), the person must prepare a report and submit it to the Secretary of State. And as per new subsection (3), the Secretary of State must then publish the report and lay a copy before Parliament. New subsection (4) outlines that the first review must relate to the first 12 months after the measure comes into force, and new subsection (5) outlines that subsequent reviews must relate to each subsequent period of 12 months thereafter. Those annual reviews and reports will ensure transparency in the use of the measure and its effectiveness.

To ensure that the eligibility verification measure is exercised in a responsible and effective manner, in accordance with the legal framework, new section 121DC further details what each review must consider during the review period. That includes compliance with the legislation and the code of practice, and actions taken by banks and other financial institutions in complying with eligibility verification notices. The review must also cover whether the power has been effective in identifying, or assisting in identifying, incorrect payments of the benefits covered during the review period. In new subsection (7), there is provision for the Government to bring forward regulations to provide relevant functions to the independent reviewer to enable them to perform their duties under the clause.

In order to ensure that the independent reviewer is able to fulfil their duties, clause 75 also provides a legal gateway for the Secretary of State to disclose information to the independent reviewer, or a person acting on the reviewer’s behalf, for the purposes of carrying out the review. That can be found in new section 121DD, which is inserted by clause 75. Data protection provisions in new sections 121DD(2) to (4) make it clear that such sharing must comply with data protection legislation and other restrictions on the disclosure of information.

In conclusion, the clause represents a key safeguard in relation to the new power and confirms a previous commitment to Parliament to establish oversight over it and ensure its proportionate and effective use. On that basis, I propose that clause 75 stand part of the Bill.