Whistleblowing, Raising the Bar and Reducing the Risk

22 Apr

When it comes to whistleblowing everyone says that whistleblowers are the single most important factor in identifying crimes, corruption and cover ups. This is evidenced by the impact of whistleblowers in cases like Wirecard, VW Emissions, NHS Maternity Mortality Scandals, PPE fraud, Grenfell Tower, Infected blood, Vinfast Motor Cars, and Post Office Horizon. By the end of 2025 many more will have entered the list because what these cases show us is that despite the rhetoric whistleblowing is still largely unwelcome and organisations invest more time suppressing whistleblowers than embracing them. In ignoring them companies ignore the information they unlock.

Whistleblowers are awash with compliments and commiserations from those in Parliament and the press who thrive on the information they expose. But for the whistleblowers who are subjected to appalling retaliation referring to them as "Brave" or "courageous" is little comfort. Compliments, however genuinely meant do not pay the ongoing bills including huge legal fees faced by whistleblowers who have no choice but to walk away or seek compensation in the Employment Tribunal.

This Government could change things overnight by introducing the Office of the Whistleblower Bill enabling everyone to 'do the right thing' assured that they can get on with their lives unscathed afterwards and safe in the knowledge that action is being taken to protect the public from harm.

It has been an open secret for years that putting Whistleblowing into employment law was a forgone disaster. Sir John Mummery famously criticised the law, as head of the EAT, from the outset. Perhaps if recommendations by leading politicians in 1995/96 for the inclusion of a "Protected Information Disclosure Agency" had been introduced many scandals and disasters might have been averted?

Whistleblowers have waited 30 years for a government to review the whistleblowing framework but unsurprisingly it is the economy that is driving a new era which recognised the benefits of incentivising whistleblowers. WhistleblowersUK is optimistic that this is the first step into a new whistleblowing framework to include the introduction of an Independent Office of the Whistleblower alongside Hillsborough Law.

Incentives are not new

His Majesties Revenue and Customs and the Competition and Markets Authority have been incentivising whistleblowing and offering rewards for years. Last year HMRC paid out almost £1m between an unspecified number of 'whistleblowers'. Conversely, the Government has stood by the outdated rhetoric that rewards are simply "not British" and encourage malicious and vexatious allegations. Last year the CMA increased its reward to £250k in an attempt to improve uptake of its scheme as the US saw record numbers of UK citizens turn to US whistleblower programmes which offer (on the face of it) rewards that have the power to offset the personal financial risk and protection against retaliation.

But the tide is turning in the UK, at least in the case of fraud and financial corruption, HMRC is upping its game in an attempt to lure whistleblowers back to the UK as they are a key to filling the 'Black Hole' in our economy. The change started last month with when HM Treasury announced a new reward scheme coming into effect in the autumn 2025. It is targeting informants/whistleblowers to come forward to HMRC about tax fraud. This initiative is inspired by the whistleblower models in the US and Canada, notably the US where UK whistleblowers consistently make up the largest number of applications to the scheme across the EU and received 20% of the awards paid last year. This scheme is part of the Government’s broader strategy designed to enhance tax compliance and preventing tax avoidance currently in excess of £39.8bn. (2022/23 figures).

What will a US/Canadian style whistleblowing programme do for us?

It will drive down fraud and dirty money, making the UK a safer place to do business.

It will return £billions to the UK government coffers - more than enough to meet the cost of improving public services.

It will change attitudes and understanding of whistleblowing as a force for good.

Why did existing UK reward schemes fail?

There are many reasons that the UK reward schemes failed to attract whistleblowers but mostly it was about a failure to accept that the people responsible for handling inquiries were just not whistleblower whisperers. They have failed to recognise that people skills are the single most important skill to successfully working with whistleblowers. The schemes as they stand do not value people they see them as purely a means to an end, and in addition leave the whistleblowers will all the risk. Who in their right mind thinks that this is a good idea? But there are other more basic failings:

whistleblowing and whistleblower are not defined in law and protection only extends to 'workers',
an absence of public awareness or the schemes,
difficulty accessing the schemes,
risks to the informant (interchanged with whistleblower) including legal and financial,
slow response,
poor communication and whistleblower handling,
insignificant rewards,
rewards criteria being digressionary and insufficient to incentivise whistleblowers to take what can be big risks, life changing risks.

The devil will be in the detail and WhistleblowersUK will continue to offer its support and proposals to ensure that whistleblowing in the UK will include protections as well as incentives.

Realisation that whistleblowing works

The US has no problem incentivising whistleblowers and has benefited hugely from cooperation with international whistleblowers including British Whistleblowers like Howard Wilkinson who exposed a $230billion money laundering scheme while working at Danske Bank in Estonia. He tried to get the UK regulators to take notice but in sheer frustration he turned to the US which ultimately benefited US taxpayers to a sum in excess of $2billion - the UK missed out on the recovery - something that this Chancellor has taken seriously. https://kkc.com/whistleblower-case-archive/howard-wilkinson/

Facts not fiction

The US Internal Revenue Service (IRS) award whistleblowers 15-30% of the additional tax collected. For the period 1st October 2022 to 30 September 2023, the IRS paid whistleblowers 121 awards totalling $88.8m. Whistleblowers were the key to the collection of $338m in unpaid tax. During this period 6,455 whistleblowers submitted information to the IRS.

The Canadian Revenue Agency (CRA) rewards to individuals who provide information about major incidents of international tax non-compliance. To be eligible for an award, the tax collected must exceed CAD$100,000. Rewards range between 5% and 15% of the additional tax collected.

The HMRC rewards scheme will target serious non-compliance and like the US schemes is likely to set a minimum recovery before a whistleblower qualifies for a financial award. The level of award is rumoured to be up to 25%, although 5-30% have also been suggested. We wait and see...

Like the US and Canada we are looking forward to provisions that protect whistleblowers from retaliation including the use of NDA's. The new whistleblower programmes should be the catalyst for root and branch reform of the UK whistleblowing framework, outstanding since March 2023. Our proposals contained in the Office of the Whistleblower bill drafted by WhistleblowersUK include an Office of the Whistleblower. This would enhance the performance of the Duty of Candour that will come into effect when Hillsborough Law is finally enacted.

What about the rest?

Over recent years regulators have started to lean towards supporting not only the proposals in the Office of the Whistleblowers Bill but also incentivising whistleblowers. WhistleblowersUK have previously reported that the UK might not be ready for a full scale incentives programme but there can be no doubt that we are heading that way after the excellent results in the US and Canada brought to life by the excellent work of Eliza Lockhart at RUSI. https://static1.squarespace.com/static/63e4aef3ae07ad445eed03b5/t/6756cfd024f33859fb718888/1733742545613/SOC-ACE-RP31_Whistleblowing-Dec+24.pdf

There can be no doubt that the Serious Fraud Office (SFO) led by Nick Ephgrave QPM has adopted an increasingly enthusiastic approach to incentives. As a former police officer he is no stranger to working with informants and appreciates that whistleblowers are so much better. They are citizens, informed insiders, who take a great personal risk to prevent harm and deserve to be properly protected and acknowledged.

Where does this leave whistleblowers and organisations?

These moves signal the start of sensible rethinking about the UK Whistleblowing Framework and the ethical imperative for shielding those who act in the public interest by taking the risks that keep us all safe. There can be no doubt that some will make the argument to keep the public sector out of this but once the recoveries start filling the coffers of the treasury attitudes will change. Afterall fraud in the Public Sector is running into £billions too, so it will be sensible to close all doors to all criminals - public or private sector - a criminal is a criminal!

Businesses may initially find the thought of incentives for whistleblowers onerous but the law of unintended consequences is likely to dispel this idea very quickly. Incentives will provide safety to the organisations as criminals go elsewhere or go to jail leaving the business to be more productive.

Rewards could be life-changing amounts of money for whistleblowers. It will undoubtedly create an incentive for them to come forward and will create the need for the development of legal skills that support the submission of claims. Over all the only real downside to the success of incentivisation will be a failure to address the safety and security of whistleblowers because for many no amount of cash will get them to risk of losing their livelihood.

Conclusion

The government could solve many of its problems and secure the wellbeing of the UK, not just from a tax recovery perspective but by incentivising good (compliant) behaviour more widely, but it needs to demonstrate leadership and some of the bravery it attributes to whistleblowers. It needs to combine the aspirations of rewards into a single body the Office of the Whistleblower, giving it statutory powers to protect those who speak up, investigate wrongdoing and prosecute those responsible.

And finally folks, I am happy to discuss!

Georgina Halford-Hall

CEO WhistleblowersUK

April 15th 2025

Ali Kazmi