Contribution
Good afternoon, my Lords. I think that we are going to be as speedy as we were last week; the Chief Whip will continue to approve.
The amendments tabled by the noble Baroness, Lady Finn, and the noble Viscount, Lord Younger, would create additional burdens for the court system. They would also challenge the future viability of the PSFA and, therefore, its central mission of tackling public sector fraud.
Before I move on, I want to respond directly to a point made by the noble Baroness, Lady Finn. I believe that what is at stake and what is really being contested here is a matter of approach. As I said in Committee last week, being invited in to investigate by a government agency ensures a collaborative approach. We are hoping that, by working with government agencies rather than imposing ourselves on them—this is what we are learning through our current test-and-learn approach—the agencies will engage with us, meaning that we will be more likely to succeed in getting the evidence base that we need to determine the fraud.
On the specifics, the powers in the Bill let the PSFA investigate fraud against the public sector. A key rationale for this must be the deterrent effect. The PSFA must, therefore, be able to recover the money lost so that it can be used for public good and ultimately show fraudsters that their ill-gotten gains will not stay theirs for long. It is only reasonable that an element of costs recovery for the PSFA is part of this process. Amendment 23 would remove the ability of the PSFA potentially to charge for its services in future. The PSFA will act on behalf of other government departments, developing the expertise and capability required effectively to investigate fraud and recover the money lost. Providing the option to keep some of the recovered funds, subject to agreement with the public bodies concerned, will help fund the development of this expertise and will provide value for money for government and the taxpayer.
I reiterate this point to provide a level of clarity on the issue highlighted by the noble Baroness, Lady Finn. The PSFA would seek to recoup its costs and not necessarily to retain all the funds awarded. We will agree a portion with the public agency that we are acting on when the PSFA takes the case. That will be agreed in advance.
Amendment 25 limits how the PSFA can recoup reasonable costs incurred in exercising the Chapter 4 recovery powers, meaning that only a court or tribunal can award them. There is already scope in Clause 13 for courts and tribunals to award costs in relation to a claim brought by the PSFA, as highlighted by the noble Lord, Lord Palmer. However, this amendment would limit the operational flexibility of the PSFA and create extra burdens on the court system if we had to keep going back to the courts for all costs. A key aim of the Bill is to minimise the burden on the courts while ensuring that there are ample safeguards and protections in place. We already stipulate in the Bill that any costs charged have to be reasonable; we will be transparent about how we work out reasonable costs in our published guidance. However, we should always remember that investigating fraud and recovering losses is an expensive business for the Government. It is not fair that these costs are shouldered by law-abiding citizens. If you have committed fraud against the state, you should pay for this.
On how the PSFA wants to charge for its services, it is important that we recognise that, regarding money between departments and the impact on value for money, it is not uncommon for departments to charge each other for their services. The impact assessment sets out how the powers in the Bill will support the PSFA to recover up to £53.7 million over 10 years under current modelling. A significant proportion of this would otherwise have been lost to government. We create value for money by bringing funds lost to fraud or error back to government so that they can be used for public good. I hope that that explanation reassures the noble Baroness, Lady Finn, and that she will therefore not press her amendments.