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Louise Haigh, a convicted fraudster, is being stripped of responsibility for tackling public sector fraud in her new Cabinet role.
Ms Haigh, the new Chancellor of the Duchy of Lancaster, was appointed to Andy Burnham’s top team on Monday.
She admitted misleading police more than a decade ago after wrongly telling officers her work phone had been stolen when she was “mugged while on a night out” in 2013.
She claimed she initially believed the phone had been taken but later found the handset at home.
The following year, six months before she became an MP, Ms Haigh pleaded guilty to making a false report to police and was handed a conditional discharge by magistrates. It is understood that the conviction is now classified as “spent”.
As the minister in charge of the Cabinet Office, she inherited responsibility for the Public Sector Fraud Authority (PSFA), the Government’s centre of expertise on scams involving public money.
However, within hours of her taking office, that brief was handed to Pat McFadden, the Work and Pensions Secretary, instead.
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The Cabinet Office said the decision to move the PSFA was made before Ms Haigh’s appointment and had nothing to do with her fraud conviction.
In 2024, Ms Haigh was forced to resign as Sir Keir Starmer’s transport secretary after it emerged that she had a historical conviction for fraud.
The case caused a headache for Sir Keir when Ms Haigh claimed she had informed him about the conviction when he put her in the shadow cabinet in 2020.
In her resignation letter, she said she was “sorry to leave under these circumstances” but was best placed to support him “from outside government”.
The PSFA – currently shared between the Cabinet Office and the Treasury – will become part of the Department for Work and Pensions.
In a statement on Tuesday, the Government said: “As part of this overall restructuring, several functions will move out of the Cabinet Office to slim down the centre of government and align them with departments suited to their purpose.
“The Office for Equality and Opportunity will move to the Ministry of Housing, Communities and Local Government; the Office for Impact Economy and responsibility for policy on digital identity will move to DCMS [Department for Culture, Media and Sport]; the Public Sector Fraud Authority will move to the Department for Work and Pensions with continued central sponsorship from HM Treasury; and the Investment Security Unit will move to DBIST [Department for Business, Innovation, Science and Trade].”
The statement said the changes would take “practical effect” from Tuesday, where possible.
The Cabinet Office insisted that the move was planned before Ms Haigh’s appointment and did not relate to her fraud conviction.
A spokesman said: “Changes to departmental structures were agreed ahead of ministerial appointments.
“Several functions are being moved out of the Cabinet Office to slim down the centre of government. This includes the Public Sector Fraud Authority moving to the DWP because most work tackling fraud happens in that department.
“Claiming otherwise is completely inaccurate.”
On its official website, the PSFA is described as the Government’s “centre of expertise on the management of public sector fraud”.
Its responsibilities include “being the authoritative voice within Government” on the problem and “providing expert-led services” to ministerial departments and public bodies.
