“(1) The Secretary of State must, within one year of the passing of this Act, conduct a review of whistleblowing processes in relation to fraud in the public sector.

(2) A review conducted under this section must consider—

(a) the appropriateness and efficacy of existing whistleblowing processes;

(b) barriers to reporting fraud and reasons for underreporting of fraud; and

(c) recommendations for change.

(3) The Secretary of State must publish a report containing—

(a) the findings and conclusions of the review, and

(b) a timetable for the delivery of any recommendations for changewithin six months of the completion of the review.”—

Brought up, and read the First time.

I beg to move, That the clause be read a Second time.

New clause 16 would require the Secretary of State to conduct a review of whistleblowing processes in relation to fraud in the public sector within one year of the Bill passing. The Opposition would like the review to include the appropriateness and efficacy of existing whistleblowing processes, the barriers to reporting fraud, the reasons for the under-reporting of fraud, and recommendations for change.

The Committee has previously discussed the 2023 National Audit Office report that highlighted the difficulties with whistleblowing within the public sector, particularly in respect of whistleblowing on senior colleagues. The NAO also highlighted that of the public sector whistleblowing disclosures it received in 2023-24, 12% related to fraud. I did not get a particularly clear answer from the Minister about the safeguards that have been put in place to ensure that junior civil servants are able to raise concerns about more senior members of staff, so I am interested to see if there is more to be said.

It is a serious issue. One of the reasons I was interested in tabling this new clause is that, as a junior member of staff at a local authority, I saw this happen. I was in a situation where two colleagues were defrauding the local housing authority, and at that stage as a 21-year-old I did not feel able to do anything about it. That is one of the biggest regrets of my life. Having worked significantly in housing since, the fact that I was not able to call them out for essentially purchasing a council house that they were no longer living in, makes me feel that this safeguard —ensuring that Government Departments’ houses are in order as the legislation goes forward—is particularly vital.

John Smart, who sits on the PSFA’s advisory panel, raised the example of the US, which has whistleblower reward legislation in place that is effective at flushing out issues affecting payments made by the Government. The legislation flushes out fraud by incentivising whistleblowers to blow the whistle, so to speak. He recommended that the Government consider such legislation, so could the Minister inform the Committee whether the Government have looked into that option? Would it be possible for us to learn from that legislation? Could the Government consider such legislation in the future, and if not, why not?

I thank the hon. Lady for raising the critical issue of whistleblowing. I assure her of how seriously the Under-Secretary of State for Work and Pensions—my hon. Friend the Member for Stretford and Urmston—myself, and both Secretaries of State take the issue of whistleblowing. I hope, as I set out our responses to the NAO report and our wider work, to offer the reassurance that the Opposition are looking for.

When it comes to internal and external fraud against the public sector, Government Departments are responsible for their own whistleblowing arrangements and for overseeing arrangements in their arm’s length bodies. For example, the Department for Business and Trade publishes and regularly updates its guidance, “Whistleblowing: list of prescribed people and bodies”, which details who individuals can raise a concern with. The list comprises bodies and individuals to whom making a disclosure qualifies the individual who makes the disclosure for legal protections under the Employment Rights Act 1996—for instance, protection against being dismissed by their employer for the disclosure.

Whistleblowers can report concerns about public sector fraud to bodies such as the NAO’s Comptroller and Auditor General, the director of the Serious Fraud Office, the Auditors General for Wales and for Scotland, the NHS Counter Fraud Authority and various other bodies listed on gov.uk. The NAO report that the hon. Lady referred to set out that between 2019 and 2022 fraud one of the most common concerns raised—I think it accounted for 40% of concerns.

On the review of the existing processes, the key findings of the recent NAO publication related to the need to increase awareness of the channels for whistleblowing, to improve the experience of whistleblowers and to ensure that lessons are learned, as the hon. Lady set out. In the light of the NAO report, and with the intention of opening up as many avenues as possible for the reporting of public sector fraud, the PSFA will explore with the Department for Business and Trade whether it would be appropriate to add the PSFA to the list of prescribed organisations. That would go alongside the existing ability to raise fraud within a public sector body or Department. We will also use the findings of the report, as well as the NAO’s good practice guide to whistleblowing in the civil service, to inform our approach.

The DWP has established processes by which members of the public and staff can report suspected benefit fraud. Members of the public can report fraud online at gov.uk, by phone or by post, while DWP staff follow clear internal guidance and processes. Given the intent to maintain the focus of this legislation, the recent work by the National Audit Office, the existing DWP processes and the steps the PSFA is taking to continue to improve the whistleblowing offer for public sector fraud, I will resist new clause 16.

I appreciate the Minister’s response. We will withdraw the new clause, but I urge her to go back and look at what more can be done. I appreciate that the PSFA might come in as a prescribed organisation, but I am particularly concerned about how we bridge the gap and enable more junior civil servants to blow the whistle in relation to senior colleagues. Ultimately, that was the focus of the NAO report. If there is a way to look at that ahead of Report stage, I would be grateful. I beg to ask leave to withdraw the motion.

Clause, by leave, withdrawn.