Georgia Gould MP: speeches

Speeches

• 25 Feb 2025 · Public Authorities (Fraud, Error and Recovery) Bill (Second sitting) · Hansard source

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  Q Concerns were raised earlier that the PSFA would take its eye off the ball on prevention and the wider area of work, and become an agency focused only on enforcement. It would be helpful if you could address and answer those concerns. Mark Cheeseman: The Public Sector Fraud Authority has two elements to it. One is overseeing Government and how individual Departments are doing in dealing with fraud and what they are doing on it; the Bill itself says that Departments would refer cases to the PSFA and ask for them to be dealt with under it. The second is providing some of the services that support Departments around taking action on fraud where it happens. The biggest difference we will make, alongside that, is through prevention. We heard from witnesses earlier about the use of data and analytics. We have a data and analytics service that works with public bodies to use that to find and prevent fraud up-front. We also have a risk service that works with other parts of the public sector to understand the risks they face, in order again to prevent those risks by putting in controls. While there will always be that balance, there will also always be some element of fraud that is still committed. We will not be able to design a system where there is no fraud risk or design out fraud. There will always be cause for an efficient, effective and proportionate part of the machine to take action on those instances of fraud and to investigate them thoroughly and properly.

• 25 Feb 2025 · Public Authorities (Fraud, Error and Recovery) Bill (Second sitting) · Hansard source

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  Thank you very much.

• 25 Feb 2025 · Public Authorities (Fraud, Error and Recovery) Bill (Second sitting) · Hansard source

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  Q I want to build on the earlier line of questioning about Ministers’ sign-off. My under-standing is that the powers will be delegated to authorised officers and there will be no ministerial sign-off on any part of the investigation. That will rightly be separate. I think it would be helpful if you could clarify how that will work in practice. Mark Cheeseman: Yes. Apologies—that was a slip when I answered earlier. Yes, the powers of the Minister—it is written as “the Minister” in the Bill—are delegated to authorised officers, who sit in the PSFA. They would be qualified to the standards of the profession, and they would be taking the decision. What I was referring to earlier is that any review decision, if someone asked for a review, would be taken by a separate authorised officer. There are a number of provisions in the Bill to enable people within the process to make an information-gathering request or to ask for something else to be reviewed.

• 25 Feb 2025 · Public Authorities (Fraud, Error and Recovery) Bill (Second sitting) · Hansard source

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  Q Thank you both for your evidence. First, to Joshua, on the NAO’s reports on fraud, the PSFA measures hopefully build on many of those recommendations. I would welcome your assessment of the PSFA measures in that light and of any areas where you think we should go further. Joshua Reddaway: I think you are referring to the report we did in March 2023, after the PSFA had just been established. We very much wanted it to be a baseline for the challenges it was trying to deal with. We basically said that there needed to be a cultural change across all of Government, that 84% of the resources were in DWP and HMRC, and that covid really exposed that the Government did not have the capability in other Departments. I have to say that, from our point of view, we saw fraud as essentially a welfare and tax issue for many years, so it was a bit of a surprise to start bringing it out to the other Departments a bit more. I would interpret the Bill as being about giving the powers, particularly on the enforcement side, and in the meantime, the PSFA has been doing quite a lot on the prevention side. The prevention side is primarily where I would be focused because that is where the biggest gains are to be had in dealing with the cultural changes that are needed across all of Government. Mind you, I do not read the Bill as being against that; I see it as supplementary. We would be very disappointed if the PSFA became exclusively an investigation and enforcement-type agency. The impact assessment thinks it can get roughly £50 million over 10 years from enforcement. Like I say, every million counts, but that is very tiny compared with the challenge that the PSFA is trying to meet. Is that the sort of thing you are interested in?

• 25 Feb 2025 · Public Authorities (Fraud, Error and Recovery) Bill (Second sitting) · Hansard source

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  Q As an adviser to the PSFA, you have seen the organisation grow. What is your assessment of where the PSFA is in tackling public sector frauds, and how the Bill moves us on? John Smart: That is a big question. I have been involved with the Cabinet Office for over 12 years, so the inception of the PSFA came about while I was working there. In the 18 months since it was formed, the PSFA has gone a long way to reach a better understanding of where the issues sit across Government. Clearly, it plays best outside the DWP and HMRC. My passion has been identifying where fraud is taking place, which I have worked on for the past 10 years, and trying to quantify the fraud occurring within Government. As you all know, that is very hard to quantify because it is hidden and therefore unknown. The PSFA has gone a long way and is continuing to flush out where resources should be committed to preventing, investigating and deterring fraud across Government outside HMRC and the DWP. That is critical. When I first started asking Departments where frauds were within the Departments, they replied, “There’s nothing to see here.” At least now, particularly because of the work the PSFA has been doing, there is recognition that there is a real issue to be addressed, and that it is not just expenses fraud, or whatever they used to think it was.

• 25 Feb 2025 · Public Authorities (Fraud, Error and Recovery) Bill (Second sitting) · Hansard source

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  Q Thank you. It would be helpful to hear from you about the work that the PSFA has been doing more broadly to consult, and to talk to other parts of the public sector and other experts, in developing this package and the thinking behind it. Mark Cheeseman: Absolutely. First, the PSFA has been brought together from experts across the system. We have brought in experts not just from within the public sector, but from other sectors, and we also work with other countries to understand what they do on this. We have been consulting very widely with the public sector, and a number of the people who have come to look at this have looked at it from the point of view of what they could not achieve in their own public bodies and therefore how they could take more action and what that power would look like. We have also brought together other investigators and asked them what they think the optimal powers are and what the proportionality aspect and the safeguards should be, and considered that. We have done quite broad consultation within the public sector, but we have also asked local authorities what their views are on other aspects such as that.

• 25 Feb 2025 · Public Authorities (Fraud, Error and Recovery) Bill (Second sitting) · Hansard source

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  That is a very helpful challenge. Joshua Reddaway: That is my understanding of this. Our one concern is, please don’t let this be the tail that’s wagging the dog.

• 25 Feb 2025 · Public Authorities (Fraud, Error and Recovery) Bill (Second sitting) · Hansard source

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  Q Yes, and I wholeheartedly agree with that. A massive role in prevention, professionalisation and raising the profile of fraud sits within that, but what is your analysis of how much the deterrent measures in the Bill will support that prevention agenda? Joshua Reddaway: It is not rare to find what we call audited bodies, Government organisations, that have found a fraud, have taken it as far as they can through their internal services, and have tried to hand it over to the police to make an arrest—this is the point where it is outside audit—but have not been able to find anyone who will pick up that file, which has been fairly developed. The point that we raised in the 2023 report and that the PSFA was trying to deal with was: how can you get an organisation that fills the gap to help defend the Government when they get attacked? The police are basically going to say that Government are big enough and ugly enough to look after themselves on this. When we looked at fraud more widely across society in a report that we did later in 2023, we found that at that time it was 40% of all crime and 1% of police resources. That is what you are trying to tackle here. You are trying to have an organisation that fills the gap on enforcement. How important is that? I think it is about having a deterrent, and if you get it right it should also be about root cause analysis. By that I mean, if you have an investigation and you are able to fully investigate it, it is not just about prosecuting that person, but about properly understanding why that happened in the first place, and improving it. So if you are an organisation that is outsourcing an investigation to another party, I always wonder a bit whether they will do that bit of the loop. I am hopeful that the PSFA will develop the capability to do that.

• 25 Feb 2025 · Public Authorities (Fraud, Error and Recovery) Bill (Second sitting) · Hansard source

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  Q And those authorised officers would make the decision about the timing to allow for information gathering; that would not be a ministerial decision. Mark Cheeseman: Absolutely. That decision is made by the authorised officers, based on their experience of weighing up both proportionality and how they can engage with the organisation or individual they are asking for that information, and that individual or organisation can request a review of that request.

• 25 Feb 2025 · Public Authorities (Fraud, Error and Recovery) Bill (Second sitting) · Hansard source

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  Q So it is about being explicit that that is a minimum and it can be extended, based on those conversations? John Smart: Exactly. That is the reason for the starting point.

• 25 Feb 2025 · Public Authorities (Fraud, Error and Recovery) Bill (Second sitting) · Hansard source

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  Q I echo the points made by my hon. Friend the Member for Stretford and Urmston about the really strong level of engagement. I welcome the conversations that we have had and that I know are ongoing with our teams. On the PSFA side of the Bill, I heard what you said about potential exemptions, but are there any other areas that you would like us to work on in detail as we move forward? Daniel Cichocki: The key thing for us now, as I said in relation to the DWP measures, is to start to look at the detail of the draft regulations and the code of practice that sit behind the powers, which we look forward to engaging on. Our broader observations are more on the DWP side. Across both elements of the Bill we welcome very strongly the independent review processes that have been built into the powers. We think the scope of those reviews could just consider some of the other factors that we know have been raised as questions around these powers. For instance, could there be more direct scope for that independent reviewer to consider the impact of some of the unintended consequences on vulnerable customers and the cost of compliance? Those are just some broader points on the independent review, but I think the principle of having one across both elements of the Bill is important.

• 25 Feb 2025 · Public Authorities (Fraud, Error and Recovery) Bill (Second sitting) · Hansard source

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  Q I have a question about the information-gathering powers and timings that builds on previous questions. The current proposal is that there will be a minimum of 10 days to gather information, but that that timeframe can be made longer in discussion with the business, and be made proportionate to its size. The business or organisation will be able to request a review of the timeframe if they feel it is too onerous. Is that a proportionate position in terms of information-gathering powers and safeguards? John Smart: As we said earlier, the larger organisations will be geared up to provide the information within the timeframe required. Some of the smaller organisations might struggle to meet that 10-day requirement, but I still think it is a reasonable starting point. If you do not start with a reasonable starting point, for the larger organisations you end up deferring decision making and action being taken. I think 10 days is reasonable.

• 25 Feb 2025 · Public Authorities (Fraud, Error and Recovery) Bill (First sitting) · Hansard source

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  Q In your experience of researching fraud, how does this Bill compare to international best practice? Should we be considering anything else that you have seen that particularly works in other places? Professor Levi: The Americans used to be better at this than may have been the case in the past few weeks. The General Accounting Office and some of the inspectorates general in the US have been pretty active, but the US still had a huge amount of covid-19 fraud. Australia is getting better. Clearly, the head of the Public Sector Fraud Authority is part of this group of people trying to improve things, but I would say we are starting at a pretty modest level, in terms of numbers of people. In terms of the DWP, it is a struggle for everyone. We have to look at it in relation to general welfare. I remember going to a meeting and talking to some French delegates who said to me that it was about—

• 25 Feb 2025 · Public Authorities (Fraud, Error and Recovery) Bill (First sitting) · Hansard source

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  Q I am interested in the point you made about future-proofing against future pandemics or crises. Can you both give us your reflections on what you learned from the covid pandemic? Do you feel the Bill addresses what we need to do to ensure that we do not end up with the level of fraud we saw during the pandemic? Kristin Jones: We have to plan for emergencies—they will, inevitably, occur—and the work on that should be kept up to date so that you can refer back to one you prepared earlier. That is so important because when there is an emergency, everybody is doing their best to get through it as fast as they can, and that is not the time for slow consideration, whereas having been through that experience, now is the time to reflect and document what we are going to do in future. Alex Rothwell: Fundamentally it is about the loosening of controls, our understanding of the impact of the loosening of controls, and the friction that is or is not introduced when you are addressing an emergency. We also now have a much better understanding of how that can manifest itself. But I am confident that the Bill would enable an effective response.

• 25 Feb 2025 · Public Authorities (Fraud, Error and Recovery) Bill (First sitting) · Hansard source

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  Q Obviously, the provision in the Bill is to move the PSFA to be a statutory body, but as we were discussing earlier, built in for the current period is the oversight of an independent chair. Does that offer reassurance of that oversight in the meantime? Helena Wood: There is a question of “Who guards the guards?” in some respect. This Bill has significantly built in oversight; I think at every step we see that. However, it depends who the independent chair is, and a question would be whether that individual could be subject to a parliamentary approval process, as other oversight positions are—particularly if we look at the National Audit Office model, for example. It might be good to build in a parliamentary approval process for the individual who will take that role.

• 25 Feb 2025 · Public Authorities (Fraud, Error and Recovery) Bill (First sitting) · Hansard source

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  Q On the PSFA side, in order to recover debt, you would have to apply to a court. Does that answer that point or is there more to be done? Professor Button: Yes, I think that does. That is fine. Professor Levi: His Majesty’s inspectorate of constabulary and fire and rescue services has been pretty tough on fraud policing by the police, so I am personally encouraged by the proposal for accountability and review by them. It is reasonably rigorous and scientific, and there is the National Audit Office as well. Following on from Professor Button’s comments, sampling behaviours at all levels is a good methodology for testing. The question that Dr Kassem was raising earlier about the internal stuff and the supervision of that is a more complex example. Dr Kassem: My suggestion was more about having an independent oversight board—independent from the PSFA—to review the work and also perhaps to support an independent audit of the operation and see whether the Bill is actually working in terms of recovery and of transparency and fairness. Someone might say, “Okay, we need someone from the PSFA on the board to feed back about operational tasks and challenges and so on.” That is fair enough, but that could slightly reduce the independence that we are talking about. It can still produce a report to describe the work, the performance and the challenges that it met, and a completely independent board can then oversee the work and challenge and scrutinise it if needed.

• 25 Feb 2025 · Public Authorities (Fraud, Error and Recovery) Bill (First sitting) · Hansard source

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  Q You mentioned that the PSFA powers are used generally, but they have not been available to tackle fraud in the public sector outside of tax and welfare. What is your assessment of bringing those powers into this space? How effective will they be at tackling public sector fraud? Helena Wood: This is a really necessary approach. However, I would caution that we are holding off from establishing the PSFA as a statutory body for now, and I completely understand the reasons for that: we are in a very tight fiscal environment, the cost of setting up a new agency is substantial, and we need to test the competence of the PSFA in doing so. However, I think in due course we need a more fixed timeline to move the PSFA off into a statutory body, to at least remove any perception—if not actual political interference—in investigations. That is really important—we need a stronger timetable. I know that will happen when the time is right, but I would like to see a stronger timetable towards it. I think there will be at least a perceived risk of Executive overreach if the PSFA does not move in that direction more quickly.

• 25 Feb 2025 · Public Authorities (Fraud, Error and Recovery) Bill (First sitting) · Hansard source

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  So the other half—the prevention side—has to accompany this. Alex Rothwell: Absolutely.

• 25 Feb 2025 · Public Authorities (Fraud, Error and Recovery) Bill (First sitting) · Hansard source

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  Q The proposal is to have an independent chair that is completely independent of the PSFA and reports into Parliament. Do you think that answers that point? Dr Kassem: Yes.

• 25 Feb 2025 · Public Authorities (Fraud, Error and Recovery) Bill (First sitting) · Hansard source

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  Q Is the partnership with the PSFA that already exists working well? Alex Rothwell: Yes, it is. As I mentioned, the professionalisation of fraud specialists has made huge inroads in terms of the acceptability of fraud professionals, particularly in a finance environment—we deal with audit committees and so on—and there is also the recognition that the Government are taking fraud seriously. That is not just this Government but the previous one as well. The direction we have had from the Cabinet Office—

• 25 Feb 2025 · Public Authorities (Fraud, Error and Recovery) Bill (First sitting) · Hansard source

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  It is really reassuring to hear that because oversight is incredibly important to us. I have one more question, but I am happy to give way to others.

• 25 Feb 2025 · Public Authorities (Fraud, Error and Recovery) Bill (First sitting) · Hansard source

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  Q What do you see as the biggest current threats in terms of fraud against the public sector and—if we have time—how does the Bill address them? Alex Rothwell: From my perspective it is the digital footprint that is left and our ability to analyse that at scale. Very few transactions, if any, take place that do not have a digital or electronic footprint of some kind. The data sharing and our capability to analyse that data is the most important factor. The Bill goes some way to addressing that, but obviously elements of the Bill are about responding to fraud once it has happened. That, for me, is the biggest challenge. But on top of that are the safeguards that we put in place to ensure that our interpretation of that analysis is also correct.

• 25 Feb 2025 · Public Authorities (Fraud, Error and Recovery) Bill (First sitting) · Hansard source

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  Q Thanks for bringing your significant experience to this discussion. My question builds on Dr Rasha Kassem’s point about the importance of oversight. That is something that we have taken very seriously in drafting the Bill and trying to ensure that independent oversight is built into every part. I am interested in the assessment of all the witnesses of the level of oversight that is built in. As we develop further work, guidance and training, is there anything we need to think about to continue to strengthen that? Professor Button: If you look at this in the broader context of hybrid policing bodies, which is one of my areas of study—non-police bodies that engage in a whole range of enforcement functions—what is being proposed in terms of the accountability of this body compared with, say, the Health and Safety Executive, the Gangmasters and Labour Abuse Authority and some of the many other different types of enforcement bodies is certainly on a par with, if not better, than some of those organisations, with the inspection, the complaints body that people have access to and the additional measures in place. One of the crucial areas is obviously when you get to prosecutions. With the Post Office scandal, we have seen the challenges if you have too much control over prosecution as well. The Department for Work and Pensions does use the Crown Prosecution Service, but with the lesser sanctions, it might be an issue to have more accountability, where you have that situation, to avoid excessive use of those penalties in a very negative way. That is possibly the only area where I would see an issue. Otherwise, the accountability measures are very similar to the many other hybrid enforcement bodies that central Government have.

• 25 Feb 2025 · Public Authorities (Fraud, Error and Recovery) Bill (First sitting) · Hansard source

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  Q You have talked a little about the kind of police pressures that exist. I would be interested in both of your assessments, given your experience, of the police’s capacity and ability to investigate public sector fraud, and whether that means there is more of a need for civil powers. Alex Rothwell: If we look across other international jurisdictions, we see that law enforcement agencies often have quite distinctive public sector fraud or crime functions—for example, the FBI has an extensive healthcare fraud capacity. The way policing has evolved over the last 20 or 30 years, particularly with an emphasis on drug supply, knife crime and firearms, has meant there is little capacity in policing to tackle public sector fraud, and of course there is an ever-present terrorism threat, which is changing rapidly. There is also safeguarding, with the National Crime Agency having quoted publicly the figures in terms of people who are a risk to children, for example. One of the challenges is that even if you invest more in fraud capability, when a crisis happens, whether that is because of public order or some other form of crisis, policing has to flex more than other investigations. Inevitably, crimes like fraud are perhaps easier to put on hold for a time. Certainly since 2018 we have seen a gradual professionalisation and an increasing capability in the public sector, which I endorse. We could invest more in the police, but my concern is that there will continue to be crises that affect policing that will impact the ability of policing to support the public sector in the way that is required. Kristin Jones: I agree with everything that Alex just said. The same applies to prosecution: if you have specialist prosecutors, where the resource is ringfenced, they do not get dragged away, but if you have them in with other prosecutors, it depends on what the pressure is at any particular time as to what resource is going to be given to fraud prosecutions.

• 25 Feb 2025 · Public Authorities (Fraud, Error and Recovery) Bill (First sitting) · Hansard source

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  I very much agree. Kristin Jones: Increasingly in society today knowing what the truth is, with the amount of data and false information out there, can be the problem.