The next item of business is a debate on motion S6M-18079, in the name of Shirley-Anne Somerville, on the legislative consent motion for the Public Authorities (Fraud, Error and Recovery) Bill, which is United Kingdom legislation.
20:56
I am pleased to come to the chamber today to debate this LCM. As I recently noted to the Social Justice and Social Security Committee, I have a responsibility to ensure that legislation impacting on the devolved social security system is fully compatible with our principles and ethos. I am also mindful of the practical implications of any legislative changes and how they might impact on the safe and secure transition of benefits. I have scrutinised the bill and the ramifications carefully, and have engaged with the UK Government. I now recommend consent in a number of areas.
On entry, search and seizure, the provisions will allow the Department for Work and Pensions to apply to a sheriff for a warrant to enter premises and to search for and seize items when investigating serious cases of fraud. Currently, the DWP requires the police to undertake that action on its behalf. I am content that nothing in those provisions runs contrary to the ethos and principles underpinning our devolved social security system.
Regarding the provisions on data gathering, the UK Government has broadly mirrored the approach that was pioneered in our devolved social security system, and because of that, and because the provisions in the bill contain similar safeguards and exemptions in respect of third sector organisations, I am content to recommend consent.
On eligibility verification measures, the provisions in the bill will allow the DWP to require organisations such as banks and financial institutions to provide data to establish an individual’s entitlement to benefits and to identify incorrect payments. It will be of reassurance to the Parliament today, I hope, to know that the UK Government has confirmed in writing that there is no intention to include devolved benefits within the scope of that measure, now or in the future.
On changes to administrative penalties, there is no equivalent to administrative penalties within the devolved system, so I am therefore content to recommend consent.
Overpayment recovery is an important aspect of the bill. Although the provisions on that were referred to in the memorandum accompanying the motion, the Scottish Government did not take a position on consent. That was to allow for due consideration of the impact of those provisions on Scottish clients and for on-going discussions with the UK Government.
I fully recognise the duty of Governments to ensure that overpayments are recovered, wherever it is reasonable to do so, but that cannot be at the expense of our values and ethos. As I confirmed to the Social Justice and Social Security Committee, I have concluded that it would not be appropriate to recommend consent for the overpayment recovery provisions. Those provisions allow for the direct recovery from bank accounts with no need for a court order and for the potential suspension of driving licences. No such provisions exist within the devolved system, and I do not consider them compatible with the ethos of fairness, dignity and respect. I have confirmed that position in writing to UK ministers, who have confirmed that they will seek to amend the bill such that devolved benefits are removed from the scope of those provisions.
The Scottish Government did not see the full provisions of the bill until it was introduced on 22 January 2025, which meant that normal timeframes for lodging this legislative consent memorandum could not be met. As a result, and due to the on-going engagement that is still required to understand where the bill and its numerous amendments will impact on Scotland, I confirm that there will be a requirement to lodge a supplementary LCM for the bill in due course. I will, at that time, be happy to provide a fuller update on the overpayment recovery provisions as part of that supplementary LCM.
I move,
That the Parliament agrees that clauses 72, 73, 74, 75, 77 to 81, 83 to 87 and 98, and schedules 3-4 of the Public Authorities (Fraud, Error And Recovery) Bill 2025, introduced in the House of Commons on 22 January 2025, so far as these matters fall within the legislative competence of the Scottish Parliament and alter the executive competence of the Scottish Ministers, should be considered by the UK Parliament.
I call Collette Stevenson on behalf of the Social Justice and Social Security Committee.
21:00
I am grateful for the opportunity to contribute to the debate on behalf of the Social Justice and Social Security Committee.
According to the UK Government, the overarching policy objective of the Public Authorities (Fraud, Error and Recovery) Bill is to safeguard the public purse against fraud and error. The bill seeks to help the UK Government to address losses due to fraud and error occurring outside the tax and benefit systems. It will also introduce new powers to help the Department for Work and Pensions to address fraud and error in the social security system and to recover overpayment debt.
The LCM sets out the aspects of the bill that apply to the devolved benefits that are delivered under agency agreement with the DWP. The Scottish Government has established agency agreements to enable the DWP to continue to administer benefits on the Scottish Government’s behalf until Social Security Scotland’s equivalent benefits have been created and until those in receipt of benefits administered by the DWP have been transferred to Social Security Scotland.
The Scottish Government expects to complete the transfer of benefits by the end of this year, except for two benefits—the severe disablement allowance and the industrial injuries disablement benefits. The committee welcomed confirmation from the Cabinet Secretary for Social Justice that the transfer of cases for devolved benefits would be completed prior to the provisions of the UK bill coming into force.
The Scottish Government is asking Parliament to consent only to the relevant provisions that are included in the LCM. Clauses 88 to 95 and schedule 5 relate to overpayment, debt recovery and enforcement. The Scottish Government is not seeking legislative consent for those provisions.
The bill contains provisions in relation to the eligibility verification measure. If consent was granted, those provisions would allow the DWP to request large data sets from organisations such as banks in order to identify those in receipt of benefits who do not meet the relevant eligibility criteria. The cabinet secretary confirmed that there is no intention from either the Scottish ministers or the UK Government to add devolved benefits to the scope of those powers.
The bill also contains provisions in relation to overpayment recovery. If consent was granted, those provisions would provide the DWP with new options for enforcing recovery of overpayments when other routes of recovery have failed. That would include recovering direct from an individual bank account. Individuals could also be disqualified from driving for a period of up to two years if they have an outstanding overpayment and all other recovery attempts have failed.
The cabinet secretary told the committee that the UK Government had confirmed its intention to amend the bill to exempt Scottish devolved benefits from the scope of the new overpayment recovery powers. It would be helpful to know when those amendments might be expected. It would also be helpful if the cabinet secretary was able to confirm whether the Scottish Government intends to lodge a supplementary LCM and, if so, the provisions that that would relate to.
Following the evidence that was received, the Social Justice and Social Security Committee was content to recommend to the Parliament that consent be given for the relevant provisions that are covered by LCM-S6-55.
21:04
Every penny of public money lost to fraud or error is a penny taken from the Scottish taxpayer and, in turn, from school, hospitals and other services that we rely on. The Government has a responsibility to ensure that every penny that is raised is used effectively. That is why the Scottish Conservatives support the legislative consent motion before Parliament today.
Fraud in the public sector undermines public trust. Such financial loss corrodes the public’s confidence in the payment system. It weakens the social contract when people pay their taxes but see the system failing. Fraudsters exploiting the system puts at risk the support for genuine, vulnerable individuals. That is why we welcome the action to modernise and strengthen the toolkit to fight fraud. The measures that are outlined in the bill will ensure that there will be a fair system, including for benefit recipients.
We recognise that a number of the clauses falls within the competence of this Parliament, particularly in relation to benefits that are delivered under the agency agreements.
We also support the provisions that are being supported by the Scottish Government and the DWP to ensure that the way in which benefits are administered on behalf of the Scottish ministers might also be a tool to tackle fraud, and we support looking at what is happening across the rest of the United Kingdom in that regard.
The eligibility verification measures will allow the Government to ask commonsense, practical questions and simplify the criteria. The powers that are outlined are significant. At the same time, what is proposed is not overburdensome, and the DWP will have access in order to provide support. We believe that a reasonable balance will be struck to ensure that relevant organisations are involved.
The provisions on recovery and asset seizure in the bill are also very positive. Law enforcement agencies must be able to recover fraudulently obtained funds and seize high-value items that are bought with stolen money. It is simply wrong that individuals who defraud are allowed to purchase, for example, luxury items, simply because they have spent the money quickly. If we are to deter such actions, there must be consequences. The measures give law enforcement agencies legal powers to ensure that they can take swift and effective action. To be clear, strong safeguards and independent oversight mechanisms accompany the introduction of those powers. That is fair and that is right for Scotland.
The provisions will ensure that the Scottish Government and the UK Government will retain powers. We hope that any issues can be resolved. We also look forward to the DWP working with Social Security Scotland, which will focus on any disruption that might take place.
The bill will support honest, hard-working individuals. It will also ensure that, when errors happen—many errors happen across the system—those are sorted. The Scottish Conservatives want to ensure that every penny supports front-line workers.
The bill strikes the right balance between fairness and firmness. It will ensure that the Parliament has the powers to deal with these matters. Let us send a clear message that we are on the side of the taxpayer by supporting the bill.
21:07
It is a pleasure to contribute to the short debate on the Public Authorities (Fraud, Error and Recovery) Bill and the accompanying legislative consent motion.
I thank the cabinet secretary for the clearly articulated explanation of the position with regard to the LCM, and the fact that a supplementary LCM may well be required when other areas are identified and settled on.
To draw on Alexander Stewart’s contribution, it is right to remember that the intention behind the bill is to prevent and deter fraud and error. The aim is also to facilitate the recovery of funds where, through fraud and error, money has been lost from—as Alexander Stewart so rightly put it—the taxpayer. The bill is also about a focus on the DWP. On top of that, the bill will establish the public sector fraud authority, which will deal with such matters going forward.
In respect of today’s LCM, I thank both the committees in this Parliament that have worked on it, and the Scottish Government for the work that it has put into discussing with the UK Government the outstanding matters. In many ways, they can be simplified, but that does not detract from the importance of the fact that those benefits that are awarded in Scotland through devolved powers will be exempt from the recovery described in the bill. The UK Government has confirmed and amended the bill, and it has also given undertakings to ensure that those are not covered.
To the embarrassment, I hope, of Alexander Stewart, I will echo his final words on the matter. Let us send a clear message that those who are entitled to benefits are entitled to them, and that those who through fraud and, on occasions, error, receive funds should seek to return those funds. However, I note that, because of the difference in approach that we have here in Scotland, those benefits under Social Security Scotland are specifically excluded by the bill.
21:09
The Scottish Greens cannot agree to this LCM this evening. Part 2 of the Public Authorities (Fraud, Error and Recovery) Bill
“assumes that all recipients of benefits have criminal tendencies and must therefore be denied financial privacy.”—[Official Report, House of Lords, 15 May 2025; c 2372.]
Those are not my words, but the words of Labour’s Lord Sikka, speaking in the House of Lords about the bill just last month. The Scottish Greens reject the bill’s assumption outright and so cannot support the LCM. In addition, we cannot agree to any legislation that gives snooping rights to banks and other companies in the way that is enabled by the bill, even if not all those powers would be explicitly allowed in Scotland.
No court order would be needed for that unrestrained surveillance and individuals would not be told that they were being surveilled. There would be no right of appeal by those who were affected, and it is not clear what information would actually be identified by the surveillance or how fraud would be determined on the basis of that information. Because individuals would not even know that the surveillance was happening, they would have no chance to provide any explanation of their situation.
What if the algorithm that is used to identify that information makes a mistake? The Post Office scandal has surely taught us that computer systems are not infallible. Even a 1 per cent error rate could result in more than 1,000 people losing universal credit. How would they be compensated? How would they challenge that, given the widespread and on-going issues with lack of access to legal aid?
While the legislation initially allows for snooping on recipients of universal credit, recipients of pension credit and others, it is likely to be extended to recipients of other benefits, even if they are not specifically devolved and under the control of Social Security Scotland.
All of that is to tackle fraud, which we know accounts for only around a couple of per cent of annual welfare spending. Powers to snoop on all claimants on the basis of that tiny rate cannot be justified. The DWP already has powers to compel information holders to share data on individuals who are suspected of fraud, so, like Lord Sikka, I question whether the powers in the bill are necessary.
In short, the bill removes financial privacy from the poor, the old, the sick and the disabled. It is discriminatory. It turns on its head our normal presumption that people are innocent until proven guilty, and it makes a mockery of our equality and human rights laws. As such, we in the Greens cannot support this LCM this evening.
I call the cabinet secretary to wind up the debate.
21:12
I thank the committee for its deliberations when we initially discussed the matter some weeks ago, and I thank the members who have taken part in the debate.
Several members have pointed out that the bill is about the prevention and deterrence of fraud and error, and that is a very important part of any social security system. Maggie Chapman is quite right to point out that only a very, very small minority of people abuse the social security system, and we must always appreciate and understand that context.
However, it is important that, for those who abuse, or even think about abusing, the system that we hold most dear, we take a zero-tolerance approach to fraud, as long as we ensure that, in taking that approach, the system has dignity, fairness and respect at its heart. We can do both—we can have a system with dignity, fairness and respect, but we must also ensure that we tackle fraud and error as we do so.
I appreciate the remarks that members have made about specific technical aspects of the powers under the bill. It is important to point out how those will be used—or indeed, for some of them, not used—in Scotland and I appreciate the UK Government’s continued discussions in that regard. Those discussions have been difficult and complex, given the fact that the Scottish Government did not see the full provisions before the bill was introduced. That makes it challenging for this Government and this Parliament to be able to discuss and debate the issues, in particular where they are of such a technical nature.
Collette Stevenson, the convener of the Social Justice and Social Security Committee, pointed out that the Government will require to lodge a supplementary LCM for the bill. In response to the other points that she made, I say that we expect amendments relating to overpayment recovery to be made at the report stage in the House of Lords, but we do not have a public date for that yet. I will ensure that the committee is kept up to date with any information that we have, and I thank members for their time this evening.
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