The government has committed to reducing and reclaiming public money lost to fraud and error. The Public Authorities (Fraud, Error and Recovery) Bill contains provisions to extend Cabinet Office and Public Sector Fraud Authority powers to tackle fraud and error outside the tax and benefits system, and also expands powers to tackle fraud within the benefits system. The bill is due to have its second reading in the House of Lords on 15 May 2025.
Public Authorities (Fraud, Error and Recovery) Bill briefing (428KB PDF)
Approximate read time: 45 minutes
The bill has 106 clauses, split into three parts. Part 1 of the bill includes provisions which seek to tackle the issue of fraud and error outside the benefits and tax systems. Part 2 of the bill relates to fraud and error within the benefits system, and part 3 includes general provisions (such as extent and commencement).
The National Audit Office (NAO) estimates that at least £3bn of public sector money was lost to fraud or error occurring outside the tax or social security system in 2023/24, while fraud and error in the benefits systems was estimated to have resulted in overpayments of £9.7bn in 2023/24. The Labour Party’s 2024 manifesto included a commitment to tackle fraud and waste involving public money.
Measures to recover public money lost to error and fraud have been welcomed by the Conservative Party, but it said the bill did not go far enough and had “not been sufficiently prepared”. The Liberal Democrats have expressed concerns about some of the powers in the bill, particularly regarding ‘eligibility verification notices’. These would require banks and financial institutions to provide certain information on claimants. The party said the bill presented opportunities for “Orwellian levels of mass surveillance of those who get
means-tested benefits”.
Parts 1 and 2 of the bill both include provisions outlining safeguards, reporting mechanisms and oversight arrangements aimed at ensuring “the appropriate, proportionate, and effective use” of the new powers. No non-government amendments were made at committee or report stage, although several proposals were pushed to a division. These included measures concerning the independence of the appeals and review processes, tackling the rise of “sickfluencers” and payments being taken from people who were overpaid carer’s allowance. The majority of the bill would be commenced by regulations. Part 1 of the bill would extend to England and Wales; part 2 would extend to England and Wales, and Scotland.
Public Authorities (Fraud, Error and Recovery) Bill briefing (428KB PDF)
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