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

Debate between Neil Coyle and Mike Wood

Committee stage
Tuesday 25th February 2025 Public Bill Committees

[Mike Wood]

Q The Government’s impact assessment recognises that some will change their behaviours to circumvent checks. How easy do you think it would be to close the loopholes that allow some to get around the checks? Would that be a proportionate response?

Professor Button: With any kind of initiative like this, you will always get a degree of displacement. The clever fraudsters will find new means to get around the rules. Obviously, a lot of these measures are directed at the more opportunistic individuals who are not as well organised and probably do not invest as much time in looking for means to get around some of those measures. For that client group of offenders, the Bill will be quite effective. However, for the more organised offenders, particularly the more organised crime elements, they will find ways to get around some of these measures.

Professor Levi: I am not clear about the provisions for international linkages in the Bill. Perhaps that is something that just needs to be sorted out afterwards, but people need to be able to chase money overseas. The question about who does that, and what they need to do before they are able to do that, is pretty important. This is not so much in covid-19 frauds, because that has already happened, but a lot of these things are time critical. The asset-freezing orders that were granted to the police in 2017 have proven very effective, so we need to think about what processes there are for dealing with stuff rapidly.

Dr Kassem: I have one final point. I raised the issue of differentiating between fraud committed by individuals and by organisations. I think that needs to be sorted in the Bill, not afterwards. For example, from a governance perspective, the Bill says that you can access banks accounts and freeze assets, but whose? Are you going to take the assets from the organisation, the directors running the organisation or the fraud perpetrators inside the organisation? This has to be sorted, because you will face another issue, at least in courts, about who is the controlling mind in the organisation. The organisation has a mind of its own legally, and therefore cannot be treated in the same way as when you deal directly with individuals. If that is sorted, there will hopefully be a higher probability of recovery and fewer loopholes in the Bill.

Professor Levi: There is also the question of legal aid for those suspected or accused who have to take some measures to appeal. I was not clear about that, although it may be my fault.

[Neil Coyle]

Q Can I come back in on the point about fraud and error, and the differentiation between organised fraud and fraud by individuals? Are you saying that needs to be more clearly defined? There is potentially a slight difference on the panel: Dr Kassem, you were saying that there needs to be greater clarity in the Bill, and Professor Levi, you were saying that some bits do not need to be in the Bill. Are you saying that they need to be in the guidance? I was a bit confused.

Professor Levi: I am not sure that it needs to be in the Bill. Definitions of what we mean by “organised” are typically vague. An act committed by three or more people for the pursuit of profit is a very low bar for organised crime. A fraud by one person can be perfectly well organised, but they are not part of an organised crime group. In policing, we talk about organised crime activity and people normally think about organised crime groups. That is a definitional problem that may be too much for the Bill in its present form, and indeed for Governments. They certainly need to think about what conditions apply to which people, and I am sure they have. I am not sure whether that constraint needs to be in the Bill, but Dr Rasha may have a different view.

Dr Kassem: For me, when I talk about fraud committed by organisations, it does not have to be organised crime. It could be a legitimate organisation defrauding the public sector. Again, the Bill mentions things around recovery, such as accessing bank accounts and seizing assets—how would they apply in cases of organisation versus individual? That needs to be thought about carefully in the Bill. Again, when you think about the nature of fraud and who is committing it, you are talking about different powers and different motives for individuals versus organisations. There are different assets and different ways of recovery. They are not the same, and therefore that has to be clarified in the Bill.

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

Debate between Neil Coyle and Mike Wood

Committee stage
Tuesday 25th February 2025 Public Bill Committees

[Mike Wood]

Q This is looking a lot like the King Henry VIII powers that the Government railed against in opposition for many years.

Andrew Western: I would not accept that and I do not think that that is the case. I would say that we require that flexibility. Even with the six weeks, if there are problems in the process, we would potentially need to act more swiftly than that, based on feedback from stakeholders. As I said, colleagues are very welcome to table amendments if they want to secure any changes in that regard.

[Neil Coyle]

Q Can I ask you a procedural question, Chair? Is it possible to furnish Committee members, through the Clerks, with instances in the last Parliament where codes of practice were missing from legislation? I certainly sat on Bill Committees where we did not even have the costings for Government plans. There seems to be a suggestion that this is not routine or is somehow abnormal. I wonder whether we could have that.