Official Report 1177KB pdf
The next item of business is a debate on motion S6M-19275, 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. I would be grateful if members who wish to speak in the debate were to press their request-to-speak buttons now.
16:58
This is an opportunity to speak to the motion in my name on legislative consent in respect of the Public Authorities (Fraud, Error and Recovery) Bill 2025. When I spoke to the previous consent motion in my name on the bill, I was clear that, although I support efforts to reduce fraud and error in public finances, that cannot be done at the expense of treating people with fairness, dignity and respect.
Today’s motion relates to two areas in the bill for which I am happy to recommend legislative consent. I will also cover the overpayment provisions, for which I previously said that I would not recommend legislative consent and which the UK Government has subsequently amended to ensure that they do not apply to any devolved benefits, including those that are administered under agency agreement.
First, in regard to non-benefit payments, the UK Government proposes to use recovery and enforcement powers under the Social Security Administration Act 1992 to recover payments that it makes beyond social security. For example, using that legislation, it might seek to recover grants that it pays out.
I am content to recommend consent because, although the definition of “non-benefit payment” might be broad enough to encompass the recovery of devolved payments, the UK Government has confirmed in writing that it has no intention to recover such payments now or in the future, which renders any potential impacts on devolved matters theoretical only. Furthermore, future devolved payments that could be administered by the secretary of state and might fall within the scope of those powers could themselves require primary legislation and, subsequently, Scottish parliamentary consent, which would ensure due parliamentary process before any introduction.
In the bill as introduced, authorised Department for Work and Pensions staff would have been able to seize evidence relating to the commission of a DWP offence—that is, an offence that relates to a social security fraud. The provisions have been amended and will allow authorised DWP staff to preserve evidence found that relates to any crime should they encounter it when entering or searching premises. There is precedent for that approach: immigration legislation allows immigration officers to seize evidence of non-immigration offences to ensure that it is not lost and can be passed to appropriate law enforcement authorities. Therefore, there is nothing in those provisions that conflicts with the principles that underpin the devolved social security system.
The provisions on overpayment recovery do not appear in the motion because the UK Government amended the bill to ensure that devolved benefits, including those paid under agency agreements, will not be subject to the new recovery powers. However, I know that they will be of interest to members.
I acknowledge that the UK Government has a duty to manage public finances responsibly. The Scottish ministers share that responsibility. However, it cannot be done at the expense of our principles and ethos.
A range of powers is already available to Social Security Scotland to recover overpayments that arise as a result of fraud and error. The agency’s published error control strategy sets out that it already uses routine quality checking, data analysis and claim reviews to detect error and routinely recovers debt. Social Security Scotland’s next set of annual accounts, which are due for publication in November, will set out that more than £9 million of overpayments were identified and corrected in the financial year 2024-25 as a result of fraud or error interventions, with almost £3 million of associated estimated future losses prevented.
Social Security Scotland has a long-established zero-tolerance approach to fraud, which is outlined in its published counter-fraud strategies, and a wide range of investigative tools at its disposal, including intelligence sharing, fraud reporting channels and the use of surveillance where appropriate. All of that is rightly designed to protect the public purse. Therefore, I reassure members that, although it is still maturing, the fraud and error service clearly adds considerable value in protecting the public purse.
Although we are content with many of the measures in the UK bill, the Scottish Government does not support the provisions that would allow the DWP to deduct money directly from a person’s bank account without a court order or to suspend a driving licence. As a result, it will be necessary to adjust the working arrangements between the Governments to ensure that those specific new powers do not apply to the recovery of devolved debt that was accrued while the DWP delivered benefits on our behalf under agency agreements.
However, I want to be clear that that does not mean that the approximately £35 million of historic debt that is covered by those arrangements will not be recovered. Officials are now in discussions with the DWP to identify the debts, the arrangements for transfer and, therefore, the options for recovering the debt in line with the extensive powers and administrative arrangements that are already at Social Security Scotland’s disposal.
I move,
That the Parliament agrees that the relevant provisions of the Public Authorities (Fraud, Error and Recovery) Bill, introduced in the House of Commons on 22 January 2025, and subsequently amended, relating to clauses 78, 90, 98 and 99, and schedule 4, so far as these matters fall within the legislative competence of the Scottish Parliament, should be considered by the UK Parliament.
I call Bob Doris on behalf of the Social Justice and Social Security Committee.
17:04
I will be brief, because this concerns a procedural issue.
The Social Justice and Social Security Committee considered a legislative consent memorandum on the Public Authorities (Fraud, Error and Recovery) Bill in June. At that time, the Scottish Government advised us that it had not seen the full provisions of the bill until it was laid on 22 January and was consequently unable to meet the normal timings for lodging an LCM, which is important. Despite that, there was still time for the committee to scrutinise the LCM and come to a view on part of the provisions and we were able to recommend consent on that basis.
The Cabinet Secretary for Social Justice made us aware that, due to the on-going engagement that was required to understand whether the bill and its numerous amendments would impact on Scotland, she expected that there would be a requirement to lodge a supplementary LCM, which we now have before us. The committee was made aware that, as the LCM was lodged on Friday 3 October, there will be no time for the committee to consider it, because a decision on the motion is required ahead of the final amendment stage at Westminster, which is due to commence on 15 October.
That is clearly less than satisfactory. The legislative consent process reflects a key principle that underpins devolution: that the UK Parliament will not normally legislate on devolved matters or on changes to the boundaries of devolution without the Scottish Parliament’s consent. The parliamentary committees play a key role in scrutinising provisions in UK bills that legislate on devolved matters and in coming to a view on whether the Scottish Parliament should recommend consent. It is essential that committees are provided with sufficient time to carry out that scrutiny, irrespective of the merits of any individual LCM.
I very much hope that the Scottish Government will emphasise to the UK Government how important the scrutiny role of Scotland’s parliamentary committees is in considering LCMs in the future, in the hope that such situations do not occur again. However, in this instance, I can confirm that our committee agreed that the LCM should go directly to the chamber.
The Cabinet Secretary for Social Justice made us aware that, due to the on-going engagement that was required to understand whether the bill and its numerous amendments would impact Scotland, she expected that there would be a requirement to lodge a supplementary LCM, which we now have before us. The committee was made aware that, as the LCM was lodged on Friday 3 October, there would be no time for the committee to consider it, because a decision on the motion would be required ahead of the final amendment stage at Westminster, which is due to commence on 15 October. That is clearly less than satisfactory.
The legislative consent process reflects a key principle that underpins devolution: that the UK Parliament will not normally legislate on devolved matters or on changes to the boundaries of devolution without the Scottish Parliament’s consent. The parliamentary committees play a key role in scrutinising provisions in UK bills that legislate on devolved matters and in coming to a view on whether the Scottish Parliament should recommend consent. It is essential that committees are provided with sufficient time to carry out that scrutiny, irrespective of the merits of any individual LCM.
I very much hope that the Scottish Government will emphasise to the UK Government the importance of the scrutiny role of Scotland’s parliamentary committees in considering LCMs, so that such situations do not occur again. However, in this instance, I can confirm that our committee agreed that the LCM should go directly to the chamber.
17:06
The Parliament’s primary duty is to pass effective legislation, which, as members will agree, can be done only if there is effective scrutiny across the chamber and through committees.
The LCM before us relates to an important issue: fraud prevention. The Cabinet Secretary for Social Security and David Wallace attended the Finance and Public Administration Committee back in September. Every penny of public money that is lost to fraud is a penny taken from the hard-working taxpayers of Scotland—money that could be spent on our schools, hospitals or roads. Nurses, teachers and workers across Scotland deserve a Parliament that protects their contributions with unwavering diligence. We do not serve Scots by cutting corners or bypassing domestic processes. Regrettably, the process surrounding this consent motion has done that. For those reasons, the Scottish Conservatives will not support the legislative consent motion.
Fraud in the public sector does not just mean financial loss—it erodes public trust. When fraudsters exploit the system, they undermine the social contract that binds hard-working Scots to the services that they fund. The £36 million fraudulent benefit claim that was highlighted by an article in The Scotsman back in August is a stark reminder of the challenges that are being faced.
The Finance and Public Administration Committee recently sought answers from David Wallace from Social Security Scotland during his appearance before the committee on 16 September. His testimony was essential to members understanding our recovery of those funds. It was alarming to find that only 10 per cent of the funds lost to fraud in 2024-25 have been recovered. That is why the Scottish Conservatives agree with the principle of recovering wrongfully claimed funds and believe that the fraud-fighting toolkit must be modernised and strengthened.
I am aware that members are finding this difficult to follow, but I think that they sometimes underestimate how clearly their voices are carrying. Mr Stewart, please continue.
An LCM relating to the Public Authorities (Fraud, Error and Recovery) Bill was considered by the Finance and Public Administration Committee in spring 2025, but that LCM only considered limited provisions in the bill. The Parliament then voted to give consent on 25 June 2025 in relation to clauses 72, 75, 78, 81, 83, 87 and 98. The LCM did not give a consent steer on the other clauses—namely clauses 89, 90, 92, 94 and 95—so the committee did not scrutinise them properly. The Scottish Government finally lodged a supplementary memorandum of consent on 3 October for the remaining bits of the bill, but the committee did not get the chance to scrutinise them at all.
We accept that, in this instance, there have been issues about the timescales for deliberation at Westminster and in Holyrood, and the October recess has an impact on that. However, we wish to put on record our belief that there should be the fullest scrutiny of all aspects of all legislation. For those reasons, we shall not support the LCM this evening.
17:09
Scottish Labour will support the legislative consent motion. It is absolutely right to say that the UK Government is seeking to update the welfare system and deliver value for money for taxpayers. The legislation will give the DWP the ability to gather necessary information and to fully investigate fraud and error. Those are sensible updates that will improve the system and bring it into the 21st century.
The main reason why the legislative consent motion is needed is that the Scottish Government is continuing agency agreements for severe disablement allowance and industrial injuries disablement benefit. The latter benefit was devolved to Scotland nearly a decade ago, yet the SNP Government has sat on its hands. Two and a half years ago, when I launched the injury time campaign alongside GMB and the Professional Footballers Association Scotland, calling for repeated head injuries in football to be classified as industrial injuries, the cabinet secretary told me that the benefit could not be transferred because the records were on paper and case transfer would take too long.
Just last month, the same SNP Government extended its agency agreement with the DWP until 2027—a decision that was rightly condemned by Amanda Kopel, widow of Dundee United legend Frank Kopel, who tragically lost his life to dementia. It begs the question: what on earth has the SNP Government been doing for the past two years? If you do not start a process, there is no hope of ever finishing it. The First Minister’s statement yesterday that devolution has reached its limits is rather ridiculous when the SNP Government has not even bothered to enact the full powers that are currently at its disposal.
The Cabinet Secretary for Social Justice makes much of the different approach that she wants to take in Scotland. That different approach means, reportedly, having no plan to recover the £36 million in fraudulent benefit claims in Scotland. In her speech, she made reference to some belated moves to develop a plan.
Last month, it was revealed that the SNP Government has a 10 per cent recovery rate for benefit fraud and error, which means that £9 in every £10 is lost. When I asked the cabinet secretary at the Finance and Public Administration Committee whether she thought that that was good enough, she refused to say. I know what I think, and I believe that most Scots would agree with me. Just last month, Audit Scotland confirmed that position in its report on adult disability payment, noting:
“there is no timescale for when Social Security Scotland can consider incorrect payments due to client error or fraud.”
It is no wonder that Scotland’s finances are in such a mess when that is the approach taken by this incompetent, knackered SNP Government.
17:12
The Scottish Greens have serious concerns about the Public Authorities (Fraud, Error and Recovery) Bill. The bill provides sweeping powers to investigate the bank accounts of those who claim social security, yet the DWP already has powers to tackle fraud. Concerns have been raised by disabled people’s organisations, Citizens Advice Scotland and even the banks themselves that people’s privacy rights will be further intruded on as a result of the changes. There has been no clear justification that the currently held powers are insufficient and that further change is needed.
The bill fails to distinguish between overpayment due to error on the part of the DWP or on the part of the recipient and overpayment due to fraud. Although some overpayments cannot reasonably be noticed by the recipient, the bill would allow unjust investigations and could result in the money that claimants depend on being withdrawn. It appears that the DWP has not learned its lesson from those who have been pushed into poverty by universal credit deductions.
Today’s LCM relates to clause 78 of and schedule 4 to the bill, as well as to clauses 90, 98 and 99, on non-benefit payments. With regard to clauses 90, 98 and 99, the memorandum notes:
“the UK Government has confirmed that there is no intent to use these powers in relation to devolved payments”
and that
“the provisions are not intended to interact with devolved functions and would relate to payments for which UK Government has responsibility.”
Although the current Government might not intend to do so, we are not comfortable simply taking the UK Government’s word for it, and who knows what a future UK Government may make of the powers? The Government could have explicitly exempted Scotland from the provisions, as it has from other parts of the bill, but it did not.
In bringing non-benefit payment into scope, the intent appears to be to apply investigatory powers to grants as well as to social security payments. However, the definition of non-benefit payment is extremely broad—a concern that is also noted in the memorandum.
For those reasons, as well as the wider concerns raised by the third sector, the Scottish Greens suggest that we do not grant legislative consent.
17:14
I thank members for their contributions and point out that the motion that we are discussing could not be lodged until the UK Government tabled its amendments, which was not done until last week. I share the Parliament’s frustration about the timetabling of the LCM and the fact that the Social Justice and Social Security Committee was not able to scrutinise it in the proper manner. That is a reflection of the timetable followed by the UK Government for amendments at the House of Lords report stage and the third reading of the bill in the Lords. I appreciate that that is frustrating for the Parliament; it is also frustrating for the Government.
I gently point out to members of that committee that, some time ago, I made it clear that I was not willing to accept some aspects of the bill. I am not aware of the committee inviting me back for further discussion of the principles behind the stance that I took, even before an LCM was in place.
I am happy to put on the record that the Social Justice and Social Security Committee recommended the various provisions in the LCM to the chamber, based on the evidence that the cabinet secretary gave when she came to the committee. There is a more general point in relation to process, irrespective of the merits of the subsequent LCM, which is that the Scottish Parliament committee should have time to scrutinise the bill more generally.
The deputy convener makes a fair point about the time that the committee needs to scrutinise the legislation.
Michael Marra touched on the industrial injuries disablement benefit. I gently say to him that, if he thinks that the Scottish Government has sat on its hands, I wonder what he thinks about consecutive UK Governments—Tory and Labour—that have not changed that benefit for literally decades upon decades. If they had done something, the records would not be sitting archived in a paper format in warehouses down south. That is one of the challenges that we are facing. From the consultation that the Scottish Government undertook, it came out that stakeholders wished us to do a full review of a benefit that had not been looked at for many a decade rather than to make small changes at this point. I am happy to carry out the work that reflects the consultation’s recommendations.
In my opening remarks, I said that the Parliament has already provided Social Security Scotland with a range of powers to recover benefit overpayments. We have not chosen to include powers to make deductions directly from bank accounts or to disqualify people from driving. I reflect on some of the evidence that the UK Government received when it looked at the issue. For example, concerns were raised by the Child Poverty Action Group, which said:
“Direct deduction orders do not come with sufficient safeguards, meaning more risk of hardship and unfairness for families. ... This measure risks dragging these families into further hardship and even destitution by giving the DWP more capacity to deduct from a bank account whatever income or capital they do have.”
Citizens Advice across Warwickshire raised specific concerns about the impact of taking away driving licences from those in rural or semi-rural areas, which “seems like unfair treatment.” Citizens Advice said:
“New powers allowing the DWP to directly recover debts from people’s bank accounts are likely to affect people in the most vulnerable circumstances.”
Because of those types of stakeholder engagement, we are not supportive of the UK Government’s proposals. However, as I have said, that does not mean that payments will not be recovered. That is a matter of the how, rather than the if. Members of the committees will receive correspondence from David Wallace and me on fraud and error. In due course, I will be happy to discuss the further details in those letters with committees, should they wish me to do so.
That concludes the debate on the legislative consent motion for the Public Authorities (Fraud, Error and Recovery) Bill, which is United Kingdom legislation.