Georgia Gould MP: speeches

Speeches

• 29 Apr 2025 · Parliamentary Commissioner for Administration and Health Service Commissioner for England · Hansard source

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  I beg to move, That an humble Address be presented to His Majesty, praying that His Majesty will appoint Paula Sussex CBE to the offices of Parliamentary Commissioner for Administration and Health Service Commissioner for England. The Parliamentary and Health Service Ombudsman has an important role in holding public service providers to account and achieving justice for complainants. I thank Rebecca Hilsenrath KC, who stepped in as acting ombudsman following Sir Rob Behrens’s departure. She provided leadership and stability for the PHSO, ensuring a continued focus on the experience of its service users, while considering how to maximise the impact of the organisation in improving public services for the long term. On behalf of this House, I praise her for her hard work over the past 12 months, and wish her all the best for her future as the PHSO’s chief executive officer. Following the formation of a new Parliament, the process of recruiting a new ombudsman was relaunched in January. I thank the House and the recruitment panel, particularly the chair, Liam Laurence Smyth, for their speed in conducting the recruitment; they made a recommendation to the Prime Minister in March. The Government support Paula Sussex’s appointment to the role, as we believe that she has the ability and experience to lead the PHSO, bringing insights from her time in the public and private sectors. In accordance with section 1 of the Parliamentary Commissioner Act 1967, and section 1 of the Health Service Commissioners Act 1993, I commend Paula Sussex to the House for the role of Parliamentary Commissioner for Administration and Health Service Commissioner for England.

• 18 Mar 2025 · Public Authorities (Fraud, Error and Recovery) Bill (Twelfth sitting) · Hansard source

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  This is similar to the previous new clause we discussed. We have a lot of sympathy with the points set out. We want to ensure that we recover money, whether it is fraud against the public sector more widely or fraud against the DWP, but we believe that that is already covered in the Bill and I will run through why. Clause 16 clarifies that the PSFA is able to seek alternative civil recovery through the civil courts, in addition to the direct deduction orders and deduction from earnings orders in the Bill. It confirms that the PSFA will be able to apply to the county court for a recovery order. That is an order providing that the payable amount is recoverable “under section 85 of the County Courts Act 1984, or…otherwise as if it were payable under an order of the court.” Section 85 of the County Courts Act also refers to the use of the procedure in schedule 12 to the Tribunals, Courts and Enforcement Act 2007 to recover the money. That would enable the PSFA to seek enforcement of a debt by applying for a warrant of control in the county court, enabling a court enforcement officer to seize and sell goods to satisfy the debt. That ensures that the PSFA is able to pursue recovery through the most appropriate and effective mechanisms. New clause 13 is therefore already provided through the Bill for the PSFA and through existing legislation for the DWP—section 71 and section 71ZE of the Social Security Administration Act 1992 to be specific—allowing them operational flexibility to recover money in the most effective and efficient way to return money to the public purse. An amendment is not required to do that.

• 18 Mar 2025 · Public Authorities (Fraud, Error and Recovery) Bill (Twelfth sitting) · Hansard source

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  We already have effective fraud legislation. The issue that the Bill seeks to address is that we do not currently have the resources or the powers to properly investigate that or to recover money. We believe that the suggestions that are being made would have the unintended consequences of reducing the seriousness of the offence, in the way that I have set out. The proposals also omit the option available in the Fraud Act offences and the common law conspiracy offence for the Crown court to impose an unlimited fine instead of, or as well as, a term of imprisonment. Again, that weakens the response. That is contrary to the Government’s intention with the Bill that strong action should be taken against public sector fraud. New clause 15 seeks to introduce an offence of encouraging or assisting others to commit fraud by adding new subsections to sections 111A and 112 of the Social Security Administration Act 1992. Sections 111A and 112 set out two specific offences related to benefit fraud. Although the intention behind the new clause is commendable, I believe that it is not needed for several reasons, which are similar to those I have set out on new clause 2. First, the existing legal framework already provides sufficient measures to tackle fraud of this nature. The Fraud Act 2006 and the Serious Crime Act 2007 make it a criminal offence to encourage or assist any other offence, including when it relates to fraud. There are also existing laws that serve a similar purpose for Scotland. Those existing laws are robust and comprehensive, ensuring that individuals who provide guidance on how to commit fraud, or encourage others to do so, can be prosecuted effectively. Introducing additional subsections to the 1992 Act would therefore be redundant and unnecessary. Secondly, the new clause could potentially complicate the legal landscape. Adding new subsections to the 1992 Act risks creating overlapping and conflicting provisions that could lead to confusion and inefficiency in enforcement. It is essential to maintain clarity and coherence in our legal system to ensure that justice is served effectively. Moreover, the new clause would mean that those convicted of a new offence would face a less punitive sentence than they would under existing laws. For example, under new clause 15, a conviction related to section 112 would carry a maximum period of custody of three months, compared with a maximum of 10 years under the existing Fraud Act. As a result, and this is similar to what I set out on new clause 2, rather than strengthening our position to respond to such types of fraud, new clause 15 could result in a weakened response. Although new clauses 2 and 15 are well intended, neither new clause is needed as the existing legal framework already provides sufficient measures to address this issue, and introducing additional subsections would only complicate the legal landscape. However, I very much heard the points about the research being done by the hon. Member for South West Devon and the importance of tackling those who set up sites to try to defraud the public sector. I am more than happy to have a further meeting about how we can take action on that. We believe that we can do that using the existing powers, but we would welcome further discussion. The PSFA and DWP will be concentrating on the provisions in the Bill that are intended to effectively address and combat fraud through them. I therefore ask the hon. Member for South West Devon to withdraw the motion.

• 18 Mar 2025 · Public Authorities (Fraud, Error and Recovery) Bill (Twelfth sitting) · Hansard source

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  It is a pleasure to serve under your chairmanship, Mr Western. I appreciate the intention of the hon. Member for South West Devon in tabling the new clause—that is, to take fraud against the public sector seriously—but the Government plan to resist it, because we believe that the proposals are already covered and that it could lead to unintended consequences that do the opposite of what she wants. As the hon. Member said, new clause 2 would create a new offence of fraud against a public authority. We believe that that could have a detrimental effect and is unnecessary, because fraud is already an offence, and this is clearly defined in clause 70 as offences under the Fraud Act 2006 and the common law offence of conspiracy to defraud. The Bill uses those offences—they do not need to be written into it to have effect—and we have given assurances on that during a previous debate. Consequently, there does not need to be a specific fraud offence for public authorities. Assisting and encouraging fraud against a public authority, as is mentioned in the new clause, is already an offence. The offences of “encouraging or assisting”, as set out in sections 44 to 46 of the Serious Crime Act 2007, apply to fraud offences as they do to other crimes. Again, that does not need to be written into the Bill to have effect. The Public Sector Fraud Authority will be able to investigate cases in which it appears that someone has encouraged someone else to commit fraud. If we discover encouragement, that would likely form part of the PSFA’s investigation into a fraud case, and the Crown Prosecution Service could pursue that offence using the evidence collected. Whether action can be taken will depend on the facts of the case, the evidence available and whether the necessary standard of proof can be met. Crucially, new clause 2 would reduce the maximum sentence available for Fraud Act and conspiracy offences from 10 years to seven years, for fraud against public authorities only.

• 6 Mar 2025 · Public Authorities (Fraud, Error and Recovery) Bill (Seventh sitting) · Hansard source

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  The clause is an important part of the Bill because the code of practice will set out how and why civil penalties will be calculated and imposed. This will help to ensure that those powers are used transparently and reasonably. I made a commitment as we went through the previous clauses to go into detail about what will be in the code of practice, which I plan to do now. The code of practice will set clear guidance and standards for authorised officers when using the powers. It will also help the general public to understand how those powers are exercised. To encourage co-operation with our investigations, allowing the PSFA to recover more from fraudsters in the most efficient way possible, it may be appropriate to offer discounted penalties to those who co-operate. We will consult on the code of practice and publish it ahead of the first use of the civil penalty powers to ensure sufficient time for Members to familiarise themselves with the measures. In the spirit of being helpful to the Committee, I want to give as much detail as I can on what the code of practice will contain so that the House has the opportunity to understand it, as well as the other place in due course. This will of course be subject to change if either House amends the Bill. The code of practice will set out the statutory obligation under which it is published, who the intended audience is, and how it should be used. It will set out the rights of anyone who is penalised, which will include appointing legal advisers or other representatives, and how to access legal aid, if entitled to do so. It will set out how the civil penalty system will be overseen by senior officials and set out the roles of the oversight function and the “independent person” under clauses 64 and 65. The code will explain the scope of the power and how individuals, companies and other organisations will be treated. It will also set out the various kinds of penalties in the Bill, and that penalties may be applied to fraud that occurred before the Bill is enacted. It will cover the training that authorised officers will have undertaken before being authorised to issue civil penalties and the standards used by the Government’s counter-fraud profession. The code will inform the public about the investigative process in enough detail to give a fair understanding of how cases will be proven to the civil standard, without giving so much information that it would enable a fraudster to game the system. This will include how cases are referred to the PSFA, how authorised officers will be trained to assess individual vulnerability and how that will be assessed during the initial case assessment. The code will explain how the information powers in the Bill work, how they will be used, the safeguards for their use and how reviews may be requested. It will include how authorised officers will establish a claim, including in court, and how authorised officers will assess whether a case meets the civil burden of proof required to issue a fraud penalty. It will also test that assessment with others, including subject matter experts, specialists and legal advisers. It will explain the decision-making process, including who will make the decision about penalty calculation and imposition. The code will also set out the circumstances in which the PSFA will not apply a penalty, such as where there has been an error rather than fraud. Importantly, it will also make it clear that civil penalties will not be applied as an alternative to criminal prosecution but as a separate response to fraud. The code will set out how fraud penalty levels will be calculated. Penalties will be bespoke to the case they relate to, based on the individual facts. Penalties imposed will be reasonable and proportionate, and the code will set out what that means in practice. Penalty levels will be decided by reference to a variety of factors, based on the circumstances of each case. Those include, but are not limited to: the financial loss to the public authority; the time period and frequency of the offence, whether it is a one-off or a sustained fraud; the harm done to a public authority; the impact of the offence; the offender’s behaviour; whether the offender has acted alone or as part of a group; whether a position of trust held by those committing fraud has been abused. Separately, the code will set out how the penalties in the Bill for non-compliance will work, along with information powers and debt recovery powers, and the safeguards that will be in place. It will set out the criteria by which the PSFA may offer to discount a penalty for fully co-operating and disclosing fraud. It is beneficial to the Government to seek early resolution to investigation and enforcement action, and that kind of discount is used elsewhere to incentivise that. However, the code will also explain that there can be no discount without full co-operation. The code will set out the practical steps of issuing a penalty in accordance with the clauses in the Bill. That will include the issuing of notices of intent; how a person can access their right to make representations on any relevant matters; how penalty decision notices will be issued; and how to access the rights of internal review and of appeal to the tribunals. On that last point, the code will also help a person to understand what a tribunal is and how to appeal. It will not replicate the existing published guidance on the tribunals, which it will instead signpost people to. The code will set out when a penalty becomes payable, how to pay it and what will happen if it is not paid. That will include setting out how the debt recovery powers in the Bill will work, if their use is required, and other potential routes of debt recovery action. Finally, the code will make it clear how the PSFA will process, hold and share data, as set out in the Bill and with reference to the Data Protection Act 2018. The content of the code of practice, as I have set out, will give anyone affected by these powers a clear understanding of what will happen and why, their rights and responsibilities, and how the PSFA will act throughout the process. Having explained that, I commend clause 62 to the Committee.

• 6 Mar 2025 · Public Authorities (Fraud, Error and Recovery) Bill (Seventh sitting) · Hansard source

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  I will start by talking about clauses 64 and 65, and then I will address the amendment. It is absolutely necessary that there is appropriate independent oversight to ensure the powers in the Bill are used appropriately, and we welcome debate on that. That is why we have introduced the power to appoint an independent person, which might be one person—an independent reviewer—or an organisation such as His Majesty’s inspectorate of constabulary and fire and rescue services. They will augment the existing oversight structures laid out elsewhere in the Bill, such as the role of the Independent Office for Police Conduct, set out in clause 9, which will investigate the most serious complaints into the PSFA’s use of entry, search and seizure powers. Clause 64 mandates that an independent person appointed by the Minister undertakes reviews of the use of powers in the Bill. The independent reviewer will conduct reviews to consider whether the exercise of the powers is in keeping with the legislation, codes of practice and relevant guidance. They will produce a report of their findings for the Minister, including any recommendations they deem appropriate. The Minister is then required to publish the report and lay it before Parliament. That ensures there is both public and parliamentary accountability in the role of the independent person outlined in the Bill. As we state in the explanatory notes, we intend to make the duty imposed by the clause in two ways. First, the Government will commission His Majesty’s inspectorate of constabulary and fire and rescue services to inspect the PSFA’s use of the new investigative powers, which can include the end-to-end investigative process and decision making. HMICFRS has a long-standing history, going back to 1856, and it independently assesses and reports on the performance of police and fire and rescue services in the UK, as well as other public bodies with investigatory powers, such as His Majesty’s Revenue and Customs. HMICFRS reports are already made available publicly, and are an efficient way to hold bodies accountable for their investigative practices. Secondly, the Government are creating a new position for an independent reviewer to whom the PSFA’s oversight team will report. The independent reviewer will assess how the PSFA exercises the powers given to it in the Bill. The independent reviewer will carry out reviews and report on whether the use of the powers is in keeping with the legislation, codes of practice and relevant guidance, as well as considering areas where HMICFRS or other oversight bodies have not already reported. The independent reviewer could, for instance, consider live case reviews or conduct supplementary reviews between those undertaken by other bodies, or look specifically at how the PSFA has taken forward recommendations from past reviews. The independent chair will have discretion in determining where to focus their resources. We do not believe it is necessary to legislate in the manner proposed by the amendment to ensure parliamentary scrutiny. Parliament will scrutinise the independent person’s report, which the Minister is obliged to lay in Parliament. There is also an established process for agreeing posts that should be subject to pre-appointment scrutiny by Select Committees without the need for legislative provision. That process is to reach agreement on posts suitable for pre-appointment scrutiny between my Department and the Chair of the relevant Select Committee. We will be following that process for the appointment of the independent chair. We hope that offers assurance to the hon. Member for Torbay. The appointment of the independent reviewer will also fully comply with the governance code on public appointments which is overseen by the Commissioner of Public Appointments.

• 6 Mar 2025 · Public Authorities (Fraud, Error and Recovery) Bill (Seventh sitting) · Hansard source

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  The powers in the Bill are conferred on the Minister, but they will be exercised by officials specifically authorised by the Minister and termed “authorised officers”. The clause is an essential element of the legislation. It sets out the decisions that, if not made by the Minister personally, may be undertaken by an authorised officer only: deciding to give an information notice; deciding to give a recovery notice; deciding to make or vary a direct deduction order; deciding to make or vary a deduction from earnings; deciding to give a notice of intent to impose a civil penalty; and imposing a civil penalty. Furthermore, the clause details some fundamental safeguards on the use of the powers. First, to be appointed as an authorised officer, the individual must be employed in the civil service within the Cabinet Office. That is to ensure strict control over who may use the powers. The clause also defines who may conduct internal reviews, a protection offered widely in the Bill. Any internal reviews must be undertaken by an authorised officer at least one grade senior to the officer involved in the initial decision, or by the Minister. That ensures that officers cannot review their own decisions when challenged for an internal review. Authorised officers form the backbone of the Government’s approach to taking the powers. The officers will need to complete a rigorous bespoke training programme, which will cover all aspects of investigative practice, including the relevant powers under the Police and Criminal Evidence Act 1984 for authorised investigators. That will be to the same standard as for other public bodies using the same powers. Only after the training conditions have been met will an individual be put forward to the Minister for authorisation to act as an authorised officer and then may use the powers. Their use of the powers must follow strict processes, guidance and codes of practice. They will be subject to internal and external independent oversight of their use of the powers. The clause is essential, as it provides a statutory gateway for PSFA officials to use the powers under the Bill. Without the clause, the Government’s intention to improve counter-fraud enforcement would either be impractical, or the powers would be given to more individuals than is absolutely required. I commend the clause to the Committee.

• 6 Mar 2025 · Public Authorities (Fraud, Error and Recovery) Bill (Seventh sitting) · Hansard source

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  Clause 68 sets out how the powers in part 1 of the Bill variously apply or do not apply to the Crown, to Parliament and to the King and his estates, and in circumstances of grounds of national security. The clause sets important boundaries on the scope of part 1. As such, it is essential that it stands part of the Bill. The clause ensures that the Crown is bound by specific powers and provisions in the Bill. It applies in relation to premises used or held on behalf of the Crown —for example, a building owned by a Government Department—in the same way as any other premises. For instance, an authorised investigator could, if necessary, apply to a court for a warrant to enter, search and seize evidence from Crown premises. However, it does not bind the Crown in respect of some powers, specifically those in clauses 16 to 37, relating to recovery orders and recovery from bank accounts, and chapter 5, relating to civil penalties. If it did, the effect would be the Crown recovering money from itself or imposing a penalty on itself that it would pay to itself, simply moving money within its own accounts. Subsection (4) creates a power for the Minister to certify that it appears appropriate in the interests of national security that the powers of entry conferred by this part should not be exercised on Crown premises specified in the certificate. Authorised investigators could not seek a warrant to enter those premises to search for evidence. This carve-out exists because there are certain Crown premises where searching may compromise national security. It is important that this is respected. In that event, the PSFA would discuss with the relevant Department or agency what alternative approach may be possible. Finally, the clause states that the power of entry conferred by this part cannot be exercised on His Majesty’s private estates or premises occupied for the purposes of either House of Parliament. The King’s private estates are those held by His Majesty as a private person. This does not mean the Crown Estate—the sovereign’s public estates, which are managed by the Crown Estate commissioners on behalf of the Crown. In the incredibly unlikely event that evidence suggested that it was necessary to search the King’s private estates or either House of Parliament, the PSFA would request to be invited by the appropriate authority, which would be the Speaker or the Lord Speaker in the case of this House and the other place, respecting the privileges of Parliament. Clause 70 is the interpretation clause, which sets out the meaning of terms used in part 1. I do not propose to run through the whole list of terms. Many of them are straightforward and refer back to previous clauses we have debated, but some are important to understand the scope of this part or are used in a novel way. I will say a few words about them so that the Committee can understand them in the correct context. The first term is “authorised officer”, which we covered in clause 66. In this part, authorised officer has the meaning given in clause 66, which as we have already seen says that they must be employed in the civil service in the Minister’s Department. This means that other types of public sector workers, such as consultants or contractors, cannot be authorised officers, which is a safeguard on the use of the powers. The clause defines “fraud” as including “the offences in sections 1 and 11 of the Fraud Act 2006…and…the offence at common law of conspiracy to defraud.” The Committee will recall that we discussed this in the debate on clauses 1 and 2, and I can repeat the assurances that I gave then. The definition sets the scope of fraud in relation to the core functions of a Minister in clause 1, and it covers the three main fraud offences: fraud by false representation, fraud by failing to disclose information and fraud by abuse of position. It also covers the common-law offence of conspiracy, which requires that two or more individuals dishonestly conspire to commit a fraud against a victim. Together, these give the scope needed to tackle the key forms of public sector fraud. The clause defines “public authority” as “a person with functions of a public nature so far as acting in the exercise of those functions”. This sets out the scope of the Departments, bodies and agencies that the PSFA would be able to work with and on behalf of. The definition is deliberately wide to enable the PSFA to tackle public sector fraud wherever it may arise. It will allow the use of powers to investigate fraud against all central Government Departments and agencies—except HMRC and the DWP, because they already have existing powers—as well as local government and any arm’s length delivery mechanisms that deliver functions of a public nature. The clause defines “suspected fraud” as “conduct which the Minister has reasonable grounds to suspect may constitute fraud”. We discussed this definition in the debate on clause 3. Reasonable grounds to suspect is an objective test meaning a belief based on specific evidence that a reasonable person would hold. It is not just based on the investigator’s own subjective opinion. It is a reasonable test that asks, “Would an ordinary, reasonable person”—like you or me, Sir Desmond—“being in possession of the same facts as the investigator, agree that it was reasonable to suspect that fraud had occurred?” This is a common standard to initiate an investigation. Finally, beyond the definitions, the clause clarifies references to “giving a notice or other document” and sets out how court proceedings are considered to be finally determined. The clause is essential to ensure the correct understanding and interpretation of key terms used throughout part 1 of the Bill. Clause 71 states that all regulations under this part should be made using statutory instruments. This ensures a structured approach to the regulatory framework. The clause allows for the creation of different types of provisions, such as consequential, supplementary, incidental, transitional or saving measures. This flexibility helps to adapt regulations to various circumstances. The affirmative procedure requires that the regulations be approved by both Houses of Parliament, which ensures that there is oversight and accountability. The negative procedure allows regulations to be implemented promptly, but they can still be annulled by either House of Parliament if necessary. The option to convert regulations from the negative to the affirmative procedure ensures flexibility in response to the significance of particular regulatory provisions. Clause 71 is essential for establishing a coherent and responsive regulatory framework in the legislation. By mandating the use of statutory instruments, it promotes a structured process that enhances accountability and keeps the regulatory system transparent.

• 6 Mar 2025 · Public Authorities (Fraud, Error and Recovery) Bill (Seventh sitting) · Hansard source

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  This legislation is underpinned by robust oversight and layers of protection for individuals and businesses. Safeguards have been put in place to ensure that there are sufficient opportunities for individuals and businesses to make representations, request internal reviews of decisions and appeal to the relevant courts. Every opportunity will be provided to ensure that no one is penalised unfairly or in error. Clause 60 is an important final safeguard that ensures that everyone has the right to appeal to an independent court or tribunal should they disagree with the PSFA’s final determination. Per clause 14(b), once an appeal is made, recovery measures may not be exercised until after the appeal is heard and completed. The clause includes a delegated power that allows the Minister, by regulation, to make further provisions about appeals. The regulations are subject to the negative procedure. Crucially, the Minister is not given the power to remove the right of appeal; instead, the Minister may amend the clause simply to make the appeal process more efficient—for example, by allowing an appeal against a penalty or debt to be heard at the same time.

• 6 Mar 2025 · Public Authorities (Fraud, Error and Recovery) Bill (Seventh sitting) · Hansard source

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  It is a pleasure to continue to serve under your chairmanship, Sir Desmond. A priority when designing the Bill was that its powers be sufficiently balanced by strong oversight and transparent safeguards to protect the vulnerable and guard against human error. Rightly, a large number of the questions from the Committee have probed that. Clause 56 is a key part of that design. It ensures that certain steps must be taken and assured before a penalty may be issued; these steps cannot be rushed, skipped or subverted. As I have confirmed, the application of these powers will be strictly limited to specifically authorised officers within the Public Sector Fraud Authority, as set out in clause 66. To exercise the powers, these officials will be required to comply with the relevant training and qualifications, as set out in the relevant codes. They will be subject to both internal and external oversight, including scrutiny of training. Further safeguards are embedded throughout the legislation for civil penalties. These include the right to make representations in clause 56, the ability to request an internal review in clause 57, and the ability to request an appeal to an appropriate court in clause 60. Additional details of the safeguards will be set out in a code of practice published before the first use of the civil penalty powers. I will give some detail of what will be in that code of practice when we discuss the later clauses. Clause 56 is essential because it holds the PSFA and this Government accountable, ensuring that the safeguards are not only explained to the public but maintained and reviewed by independent oversight. Clause 57 ensures that a penalty decision notice must be issued before a penalty is imposed, and provides an essential safeguard by giving individuals access to a review and sufficient time for it to be carried out. Powers of review will be available only to authorised officers within the PSFA who are appropriately trained. Penalties are a key part of the deterrent message that this Government wish to send by delivering the Bill. Fraud will not be tolerated, but it is not enough to simply recover money lost to fraud and error. A clear message must be sent that fraudulent actions have consequences. Clause 58 is essential to ensure that the PSFA enforcement unit acts with transparency and is held accountable for its decisions. It is also an essential safeguard for the individuals and businesses that it will deal with, as it provides a right of review and a chance for decisions to be challenged. As part of the process, the penalised person will have the opportunity to request a review of the penalty and state why it should not be imposed; a person may contest the level of the penalty. During review, a penalty will not be imposed, per clause 57(3). If a person is not satisfied with the result of a review, they will have the opportunity to appeal the outcome to an appropriate court, per clause 60. Reviews will be carried out by an authorised officer of higher grade than the authorising officer who made the original penalty decision, as stated in clause 66(3). This is yet another safeguard that ensures a fair review of the penalty.

• 6 Mar 2025 · Public Authorities (Fraud, Error and Recovery) Bill (Seventh sitting) · Hansard source

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  I would indeed have been disappointed if the shadow Minister had not had lots of detailed questions for me on the operation of the powers. I agree wholeheartedly about the importance of safeguards. To take the questions in turn, we are confident of the legal robustness of the Carltona principle. It is how Government routinely works, and we are confident that the powers can be exercised by highly trained authorised officers. As the shadow Minister says, 28 days is a minimum. There are no plans at the moment to introduce a maximum, but the intention is for the team to work as quickly as possible to recoup public money. As we have discussed, there might be exceptional circumstances where people need more time, and the authorised officers will be able to provide that time on a case-by-case basis, always bearing in mind the need to return money that is owed because of fraud. We will talk shortly about the oversight and review process, but we want a separate team outside the PSFA that is answerable to an independent reviewer. It could look at the wide range of cases and ensure there is consistency and that powers are used proportionately. It could report to Parliament, so there would be ongoing scrutiny of the exercise of the powers. It is important to remember what will have taken place by the time we get to a penalty. In order to establish the recovery of a debt, if the individual did not agree, the matter will have gone to court. An authorised officer will have reviewed the case and submitted to a senior member of the team the rationale for a penalty to be imposed. There are a number of routes of review. The first is a review by another authorised officer of a higher grade in the PSFA team. If the individual is not satisfied with that, they will, as the shadow Minister set out, have the ability to apply to a court or a tribunal to have that reviewed. There are robust safeguards built in within the PSFA and outside the PSFA. Question put and agreed to . Clause 56 accordingly ordered to stand part of the Bill. Clauses 57 to 59 ordered to stand part of the Bill. Clause 60 Appeals

• 6 Mar 2025 · Public Procurement: Support for SMEs · Hansard source

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  I wholeheartedly agree. My hon. Friend the Member for Great Grimsby and Cleethorpes (Melanie Onn) took me to a similar farm in her constituency that had been set up by an ex-prison officer. I have to say that it was one of the most enjoyable visits I have had—it was great for my mental health to feed some alpacas and goats. I have heard powerful stories about how social prescribing has changed lives, from ending chronic loneliness to helping individuals such as a man I met recently, who had found his first stable home in his 50s. The new NPPS specifically asks contracting authorities to maximise spend with voluntary sector organisations, and we will be introducing targets for Government on spend with voluntary sector organisations and social enterprises. The Government have listened to concerns from local authorities and are working to implement changes to allow them to reserve competitions for low-value contracts for local organisations.

• 4 Mar 2025 · Public Authorities (Fraud, Error and Recovery) Bill (Fifth sitting) · Hansard source

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  We have published an impact assessment. That says that with the current size of the enforcement unit, we expect there to be about eight cases, so a small number, but of course if the powers work well and we expand the unit, that will increase. As the hon. Member would expect, we have engaged heavily across Government on all these questions. The critical thing is that there is significant deterrence to having to go through a court process—in terms of the interest that is going to grow on the debt, and the fees that would be accompanied by the legal costs and other costs associated with that process. Our hope is that the majority of people will go through a voluntary process—that will be both easier and less expensive for them—and that these powers will be used primarily as a deterrent. Question put and agreed to . Clause 15 accordingly ordered to stand part of the Bill . Clause 16 ordered to stand part of the Bill. Clause 17 Direct deduction orders Question proposed, That the clause stand part of the Bill.

• 4 Mar 2025 · Public Authorities (Fraud, Error and Recovery) Bill (Fifth sitting) · Hansard source

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  I welcome the support for the clause. To clarify, the operational costs of running PSFA operations and investigations will not be included in reasonable costs. There is work being done through the test and learn period by the enforcement unit to inform those costs, and guidance will be published in due course. As I have set out previously, there will be independent oversight of the full use of these powers, by a team that will answer to an independent chair. They will report to Parliament and will look at all aspects of the use of these powers, including the cost. If it is not established by agreement, we will have to apply to a court or tribunal to determine what the debt is, so there will be that added aspect of independence. For asset seizing, we can apply for orders through the courts. In evidence we heard from the financial industry, there were questions about how the powers will work together, and there is work going on to respond to some of those questions. Our teams are working very closely with those financial bodies. Question put and agreed to. Clause 13 accordingly ordered to stand part of the Bill. Clause 14 ordered to stand part of the Bill. Clause 15 Payable amounts Question proposed, That the clause stand part of the Bill.

• 4 Mar 2025 · Public Authorities (Fraud, Error and Recovery) Bill (Fifth sitting) · Hansard source

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  It is a pleasure to serve under your chairship, Mrs Lewell-Buck. Clause 13 allows the Government to use the proposed recovery powers to recover late penalty payments and associated interest deriving from the civil penalty regime that is introduced in chapter 5 and any additional relevant costs, either awarded by a court or tribunal or incurred in exercising the recovery powers. In all of these cases, money will be owed to the public purse. Once it has been recovered, it can be used for public good. If these sums were to remain unrecovered, it would not have this positive impact. We are building strong safeguards and appeal routes into all our measures, including on the application of penalties. Decisions to impose a penalty will be taken by authorised officers, and we have discussed the training that they will have. It is also intended that the debt recovery powers will be overseen by the independent oversight mechanisms, which we will turn to later in the session. Where we are justified in using the proposed recovery powers to seek payments directly from bank accounts and pay-as-you-earn earnings, we want to be able to use them. The penalties and costs will all derive from the fraud investigations that the Public Sector Fraud Authority will carry out. Clause 14 restricts when chapter 4 recovery powers can be used to recover penalties. They can only be used when the timeframe for appealing a penalty has passed without any appeal being bought or any appeal against the penalty has been finally determined by a tribunal. Penalties are issued for important reasons to encourage compliance and to help make the whole Bill work effectively, and to help make the PSFA effective in its efforts to tackle fraud against the public sector. Penalties are not something that can be put into the back of a drawer and forgotten about. Fraud is an expensive business for Government. It costs us money when people defraud us. It costs us money to investigate, to take proceedings through courts and to pursue recovery. It is not fair that these costs are shouldered by law-abiding citizens. It is right that those who do not follow correct procedures are penalised and have to pay. Clauses 13 and 14 enable us to hold debtors to account, driving up recovery of what is owed by letting us use the recovery powers in a wider but proportionate manner and with the appropriate safeguards and appeal routes in place. However, this has to be done with respect of due and proper process, which is exactly what this clause mandates. These clauses are important safeguards that rightly prioritise the liable person’s right to appeal a penalty decision over the recovery of the penalty. It provides us with operational flexibility to recover a range of debts, driving up the value for money of our operations. I commend clauses 13 and 14 to the Committee.

• 4 Mar 2025 · Public Authorities (Fraud, Error and Recovery) Bill (Fifth sitting) · Hansard source

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  It is important to set out again that these powers will be used in the last instance and, in many cases we hope they will be a deterrent. In the majority of cases, we expect people to engage with the authorised officers and come to a voluntary agreement. If people do not agree, the powers will be used only after an application to a court to determine the ability to recover that debt. In the first instance, we expect these powers to be used in a very limited fashion; the impact assessment talks about fewer than 10 cases a year. There is ample time to work through with banks how these powers are used and ensure that it is proportionate. The shadow Minister raised concerns that the powers are too harsh in some cases and that they will leave people vulnerable in others, which shows the balance involved. The measures have been carefully thought through, and they include safeguards for vulnerability but also the ability to step in if people are deliberately frustrating the process. We will issue guidance to banks on how the three months of bank statements will be determined, and authorised officers will work with banks to ensure that this works effectively. The shadow Minister asked about the penalty. It will be a £300 fixed penalty notice for failing to comply. As with every part of this, people will be able to request a review and, ultimately, to appeal. Question put and agreed to. Clause 26 accordingly ordered to stand part of the Bill. Clause 27 ordered to stand part of the Bill. Ordered, That further consideration be now adjourned. — (Gerald Jones.)

• 4 Mar 2025 · Public Authorities (Fraud, Error and Recovery) Bill (Sixth sitting) · Hansard source

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  As the hon. Member set out, these are significant powers and it is essential that safeguards are in place. I assure him that the Public Sector Fraud Authority is committed to safeguards around vulnerability assessments, which will have to happen before any decision is made; maximum deduction amounts, as we have discussed; opportunities for representation, reviews and appeals, with a requirement to consider all representations; and the ability to notify a change of circumstances. The PSFA might decide not to make a deduction from earnings order if it becomes apparent that the deduction might cause a person significant hardship in meeting their ordinary living expenses. As with the other powers we have discussed, if the individual does not agree with paying back the money voluntarily and refuses, the PSFA authorised officer will have to apply to court or tribunal to recover it. So there is an independent process in place to ensure that the ability to recover the debt and all the different processes that I have run through are safeguarded, and that circumstances of vulnerability and hardship are taken into account in the initial decision making. It is made explicit in the Bill, as it will be in the training for authorised officers, that the intention is to ensure that nobody is left in hardship by repayment of debt. That will be the intention of both the voluntary agreement and these powers if a court application is made in the event of a disagreement. There are similar routes of appeal. There is the ability to have a decision reviewed by an authorised officer of a higher grade and to go to a first-tier tribunal if an individual wants to challenge it, so there are significant safeguards in place for the operation of these powers. It will give the hon. Member for Kingswinford and South Staffordshire some reassurance to know that they have been built from existing powers and good practice already in operation in government. Question put and agreed to. Clause 38 accordingly ordered to stand part of the Bill. Clauses 39 and 40 ordered to stand part of the Bill.

• 4 Mar 2025 · Public Authorities (Fraud, Error and Recovery) Bill (Sixth sitting) · Hansard source

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  I thank the hon. Gentleman for the range of questions, which give me the opportunity to clarify a number of points. First, what happens if a liable person sadly passes away before paying the specified amount? The PSFA will still seek to recover the money owed to the state through the people acting on the estate’s behalf, and it will be recovered using the normal processes. Although there are not specific measures in this Bill, the PSFA will be able to use other existing debt recovery measures. As for the decisions being made, who will be making them and the capacity of the Minister, as I set out, the decisions will be made by authorised officers under the Carltona principle, and the review will be done by a more senior officer than the officer making the original decision. Critically, on any of these measures, it will be possible to appeal to the first-tier tribunal, so an independent appeal route is built into the system. We do not think that there needs to be a separate independent route, but it is important to come back to the fact that this entire system will be overseen in two ways. First, that will be done by a team outside the PSFA, working with an independent chair who will review the use of all of these powers. Secondly, as we have said, there is provision in the Bill for independent scrutiny, which we expect to be delivered by His Majesty’s inspectorate of constabulary and fire and rescue services. The ability to suspend and restart direct deduction orders gives flexibility to the authorised officers who lead the cases. Such circumstances might involve somebody being hospitalised and the orders needing to be stopped and restarted, or somebody agreeing to move to a voluntary repayment. Indeed, as the shadow Minister mentioned, they might bring forward information about their financial circumstances. As for going back to ask for further information from the banks, somebody might set out information about their vulnerability, financial circumstances or living standards, and there might be a need to check that with the bank—“The circumstances have changed, so we need to get more information from the banks.” So there is a provision to continue to gather that information. We will go through the appeals process on later clauses. It is possible that payments might be suspended as part of that appeals process, but critically, in changing and varying the order, a person will be informed of that and they can appeal the variation—the amount and the existence of the order will have already been set through a court process. The impact assessment goes through PSFA resourcing. As I have said, the savings are modest, and we have deliberately kept them modest because of the resourcing available to the team and the officers who are in place. There is resourcing to carry out 40 cases a year under the powers, and that is the expectation. These are new powers for the wider public sector. We hope that they will be effective, generate more income and recover fraud, and there is a strong evidence base for that as these powers are used elsewhere. If that is the case, it will then be possible to grow the operation of the team and increase the resourcing, but we are confident that the resourcing to deliver what is in the impact assessment and in the Bill already exists. Question put and agreed to. Clause 28 accordingly ordered to stand part of the Bill. Clauses 29 to 33 ordered to stand part of the Bill. Clause 34 Reviews

• 4 Mar 2025 · Public Authorities (Fraud, Error and Recovery) Bill (Sixth sitting) · Hansard source

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  I thank the Committee for all those questions. Both the hon. Members for Kingswinford and South Staffordshire and for Torbay will be pleased to know that my notes are very similar: it is critical that we future-proof these powers as financial circumstances change and there is innovation in the sector. Clause 37 will go into some detail about the future ability to lay additional regulations, including regulations expanding the remit of direct deduction orders to cover cryptoassets. I hope that provides some reassurance. More broadly, we discussed at the start of this process the range of information-gathering powers in an investigation. As part of that process, investigators will want to follow the money and get a wide picture of the assets that a person or organisation holds, the different accounts they might have and where their money is as part of an investigation. As the investigation moves to debt recovery, investigators will bear all that in mind. If they are not able to recover money through the direct deduction order process, there are other avenues available, although not within this Bill. As I said earlier, they could apply to the courts to seize wider assets; in a criminal case, they could use the Proceeds of Crime Act 2002, and I can give assurance that they will of course work with law enforcement where necessary. If it is not possible to recover money through the banks, there is also the ability to put that deduction on earnings. There is a wide range of options available to investigators, but the critical thing is that these are circumstances where the Government have been defrauded, and the investigators will use every avenue to recover that money for the taxpayer. On the question of where the direct deduction order sits in terms of priorities, it is a non-priority order, so secured priority debts would take precedence. Non-priority orders go by date order, and further guidance will be published on that point. Question put and agreed to. Clause 36 accordingly ordered to stand part of the Bill. Clause 37 Regulations Question proposed , That the clause stand part of the Bill.

• 4 Mar 2025 · Public Authorities (Fraud, Error and Recovery) Bill (Sixth sitting) · Hansard source

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  I thank the Committee for the range of questions and the opportunity to provide clarification. The decision on the set-up of the system was made on the basis of existing best practice in Government, particularly in His Majesty’s Revenue and Customs, so there is precedent for its working. The intention of the PSFA is to recover debt as quickly as possible, but in a way that is proportionate and does not leave anyone in financial hardship. If an individual applies to vary the amount they are paying back, the internal review and the more senior officer will look to resolve that matter in a proportionate way, and to avoid things needing to go to a tribunal. However, it is important to have independent safeguards in place. We expect cases to be resolved successfully by teams that are well trained, have all the information available to them and can take a case-by-case approach that is fair and proportionate, but in the event that an individual is unhappy with the outcome of the initial review, they can appeal to the tribunal. We expect the initial impact to be very small: our expectation is that we will be dealing with four DDOs, so even if they all go to tribunal, it is a small number, and this is an established process. We have deliberately chosen the first-tier tribunal because it is the most accessible and fastest part of the justice system. We hope that these powers are successful and can be grown, and I think we will learn a lot from the first phase of working in this way. We think the powers will be particularly focused on high-value and severe cases of fraud, and the team will work to ensure that we prioritise those cases. This feels like a proportionate use of resources, and we have consulted the Ministry of Justice, which has agreed that the first-tier tribunal is the most appropriate forum to hear DDO appeals. On the 28-day point, I said in my previous answer that we want to recover fraud as quickly as possible and are keen to not have undue delays, but the points about exceptional circumstances are well made. I appreciate the questions and I am happy to take them away and ensure that there is appropriate flexibility. On the wider point about exceptional circumstances, the important thing about these powers is that they will be exercised by authorised officers, highly trained in investigation and debt recovery, who will have due regard to the best practice on debt within Government and the wider system and will take a case-by-case approach to individual circumstances and respond to exceptional circumstances. That is why we have multiple and independent points of review. Again, I have referred repeatedly to the independent oversight that will look at all those processes and report into Parliament. Question put and agreed to. Clause 35 accordingly ordered to stand part of the Bill. Clause 36 Meaning of “bank” etc Question proposed, That the clause stand part of the Bill.

• 4 Mar 2025 · Public Authorities (Fraud, Error and Recovery) Bill (Sixth sitting) · Hansard source

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  This is a large grouping of clauses that cover the heart of this part’s new civil penalties, so the Committee will understand if I cover these issues in some depth. Clause 50 grants essential civil powers to give the PSFA a range of options with which to tackle fraud cases. These powers may be used against individuals in England and Wales. Having access to both criminal and civil powers will allow the PSFA to be more flexible and take on a broader range of cases. This access also removes unnecessary pressure from our already overburdened courts, as criminal cases are often complex and time-consuming. That means that the PSFA can deal with more cases and in a more cost-effective and efficient manner. Penalties are a key part of the deterrent message that this Government wish to send by delivering the Bill: that fraud will not be tolerated. It is not enough to simply recover money lost to fraud and error. A clear message must be sent that fraudulent actions have consequences. That is why the Bill allows penalties of up to 100% of the fraud loss. That power reflects the broad range of fraud the unit will encounter. There is a well-established precedent of the effectiveness of civil penalties across Government—for example, in HMRC, the Treasury and the Environment Agency. The introduction of a robust civil penalties regime shows that there are meaningful consequences for breaking the law, even when prosecution is not appropriate or achievable. Aligning with other Departments—for example, HMRC and Treasury—the PSFA will issue civil penalties to the civil burden of proof. The PSFA will not offer offenders a choice between a civil penalty and a criminal prosecution. Criminal prosecution and civil penalties will be two distinct options for dealing with fraud cases. An authorised officer must prove an offence to the civil standard of proof—that on the balance of probabilities, evidence shows it is more likely than not that fraud occurred. The test will be informed by the professional experience, expertise, judgment and objectivity of an investigator and will be tested against legal expertise. Final determinations will be cleared by senior experienced investigators within the PSFA. This strong power is justified by the type of fraudsters we are pursuing. The PSFA can also pursue the recovery of incorrect payments as a result of genuine error via its debt recovery powers. However, we will not be penalising individuals and businesses who make genuine errors. We are targeting those who deliberately seek to defraud the public purse. The unit will also not be issuing penalties for payment resulting from official error. This key power is underpinned by robust oversight and layers of protection for individuals and businesses. We will be talking shortly about the safeguards that have been put in place to ensure there are sufficient opportunities for individuals and businesses to make representations, request internal reviews of decisions and appeal to the relevant courts. Every opportunity has been given to ensure that no one will be penalised in error or unfairly. I turn to clause 51. We know that there is a broad range of fraud attacks against the Government, from one-off cases by individuals to complex and organised attacks from supposedly legitimate businesses. It is therefore essential that the PSFA has the necessary powers to issue a civil penalty not only to any individual who commits fraud, but to any business that does so. There is precedent for this power being successfully used across Government, for example in HMRC and the Home Office, which penalise businesses in relation to tax matters and for employing illegal workers. Having the power to impose a penalty on an individual on behalf of a business, in addition to on the business itself, is essential to ensure that businesses and employees may be held accountable for their actions.

• 4 Mar 2025 · Public Authorities (Fraud, Error and Recovery) Bill (Sixth sitting) · Hansard source

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  I thank hon. Members for the range of questions and comments. Before I go into the detail of their points, it will be helpful to take a step back and talk about why were are introducing these powers for the Public Sector Fraud Authority in this way. At the moment, the powers do not exist for serious cases of fraud that sit outside tax and welfare, and the powers we are discussing as part of the PSFA element actively exclude tax and welfare, which are dealt with elsewhere. There is a real gap: there are currently no civil powers to investigate very serious cases of fraud against Government, often led by organisations, in relation to procurement and grants. As we heard in oral evidence, the extreme pressure on the police means that such cases are often not a priority. To get a case investigated by the PSFA team, in almost all cases a different public sector organisation would have to refer into the team, so a threshold would be met at that point. The team looks at the cases in front of it and decides which to pursue after considering things like the value and the harm to the wider public sector. We are talking about really serious instances of fraud. The majority will involve organisations, not individuals, but there are instances where individuals, both within organisations and separately, will have committed serious fraud and will be covered by the legislation.

• 4 Mar 2025 · Public Authorities (Fraud, Error and Recovery) Bill (Sixth sitting) · Hansard source

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  I thank the shadow Minister for those questions. The circumstances in which someone might request a review include the ones that you set out. Primarily, it will be around affordability. There are clear provisions in the Bill on affordability and living expenses for individuals and their dependants. In terms of why the review by an internal officer can only focus on variation, it is important to remember that in these circumstances, a court will have determined the amount owed—there will already have been an independent process that has determined that. This is about the affordability of those payments. There might be other debts, and there are established processes to deal with that. If people are unhappy with the internal review, they can still appeal to the first-tier tribunal, which has wider powers to vary than the initial review. I think that answers your question. In terms of the 28-day limit, it is important to remember that the money we are seeking to recover is from people who have been proved to have defrauded the state. It is really important that we get that money back, but I am happy to look at whether there is flexibility and to keep that under review. I think those were the main questions you asked.

• 4 Mar 2025 · Public Authorities (Fraud, Error and Recovery) Bill (Sixth sitting) · Hansard source

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  Clause 35 establishes the process to lodge an appeal of review decisions around direct deduction orders. Appeals will be heard at the first-tier tribunal. Appeals can be lodged only following an internal review by an authorised officer of a higher grade than the original decision maker. The liable person, or other account holders in the case of a joint account—the shadow Minister asked about that, and it is important to clarify that a joint account holder can also request a review and an appeal—will have 28 days from being notified of an internal review decision to lodge an appeal. They cannot use the appeal to challenge the amount owed; that will already have been settled by agreement or in court or tribunal proceedings. During an appeal, the tribunal may instruct the bank to pause the effect of a direct deduction order. The tribunal judge may decide to uphold the appeal and vary or revoke the direct deduction order accordingly. They could also decide to throw out the appeal. We are developing strong, effective oversight of all our measures in the Bill. It is important that there is the opportunity for independent tribunal oversight of these powers. Tribunals provide accessible justice and will be able to provide additional review where necessary. Ultimately, this is about being fair to the taxpayer, ensuring that money lost to fraud and error is returned, but it is also about being fair to those who have received that money and ensuring that proper and due process is followed throughout.

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

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  Some points of clarity: the hon. Member for Kingswinford and South Staffordshire asked who would do the reviewing. A more senior officer from within the PSFA would complete that review, not the Minister themselves. The entire process would be overseen by a separate team who are accountable to an independent chair, and critically, who will report into Parliament to provide that level of independence. The other important context is that the Bill also—we will come to this later—provides for the PSFA to become a statutory body, fully independent from the Minister. In the meantime, it is incredibly important that we have this process of oversight and the independent chair, as we discussed. All these issues are important for balance. We have to avoid giving fraudsters the ability to abuse the review process and frustrate investigations. As John Smart told the Committee on Tuesday, months is far too long, and adding a further route to appeal to the tribunal at that very early stage would add months, if not years, to our investigations into suspected frauds. We have tried to balance this very carefully to ensure that there are appropriate routes to review that sit within a system that is independently overseen. I believe that we have found the right balance in the Bill, and I have explained those layers of review. They include internal review, which is the appropriate route that strikes the right balance between fairness and avoiding fraudsters frustrating the process. As I said, the internal reviewer will be a separate authorised officer, who will be—this is a requirement in clause 66—an authorised officer of a higher grade than the original decision maker. The way that these reviews are performed will be subject to oversight/ We will talk later in more detail about the oversight in the Bill, but it will include the inspections by HMICFRS and the day-to-day oversight by an independent chair, which could include live cases. I explained in the previous debate—I did not go through the detail, but I can do so—the stages of an information notice going through if someone still does not agree that they should provide the information. Ultimately, it is really important that if a penalty is issued for non-compliance, the information provider can appeal to the relevant court against that penalty, so there is a formal appeal to a court at the end of the information-gathering process if it gets to that place. However, the intention of the powers—as I said, this will be written into the code of practice—is very much to work alongside those organisations that are gathering information, and to be proportionate to their size and the requests put forward, so I believe we have found the right balance.