Session 2013 - 14
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Other Bills before Parliament


 
 

1421

 

House of Commons

 
 

Tuesday 17 December 2013

 

Consideration of Bill

 

Local Audit and Accountability Bill [Lords]


 

New Clauses

 

Integrated audit

 

Andy Sawford

 

John McDonnell

 

NC1

 

To move the following Clause:—

 

‘(1)    

Before section 1 of this Act is brought into force, the Secretary of State shall, by

 

regulations, put into effect arrangements for integrated audit which enables

 

auditors to work across authorities and with the National Audit Office, where

 

national and local funding is being used jointly.’.

 


 

Transparency of audit

 

Andy Sawford

 

John McDonnell

 

Alex Cunningham

 

NC2

 

To move the following Clause:—

 

‘(1)    

A local auditor has a right of access at all reasonable times to audit documents

 

from private companies to whom the local authority has contracted significant

 

services during the last financial year.

 

(2)    

Local auditors only have a right of access to audit documents from private

 

companies, under subsection (1), that relate to the service provided to the local

 

authority by that company.

 

(3)    

A local auditor must make available on request any audit documents, obtained

 

under subsection (1), subject to the provisions of the Freedom of Information Act

 

2000.

 

(4)    

In this section “private company” shall be interpreted to mean any legal entity,

 

including joint ventures, not-for-profit organisations, mutually-held

 

organisations and charities.


 
 

Consideration of Bill: 17 December 2013                  

1422

 

Local Audit and Accountability Bill-[Lords], continued

 
 

(5)    

Five years after the coming into force of this section, the Secretary of State must

 

commission and publish a review of the effectiveness of subsections (1) to (3) and

 

of the costs to local auditors, private companies and local authorities arising from

 

it.

 

(6)    

The meaning of “significant” and “terms of qualification” shall be set out by

 

regulations.’.

 


 

Confidential proceedings

 

John McDonnell

 

NC3

 

To move the following Clause:—

 

‘Before section 1 of this Act is brought into force, the Secretary of State shall

 

prepare and lay before each House of Parliament a report into the appropriateness

 

of—

 

(a)    

use made of the power conferred by regulation 4 (relating to the

 

exclusion of the public from meetings for certain items of business), and

 

(b)    

compliance with the requirements of regulation 5 (relating to procedures

 

prior to private meetings),

 

by relevant local authorities under Part 2 of the Local Authorities (Executive

 

Arrangements) (Meetings and Access to Information) (England) Regulations

 

2012, No. 2089.’.

 


 

Scrutiny

 

John McDonnell

 

NC4

 

To move the following Clause:—

 

‘Before section 1 of this Act is brought into force, the Secretary of State shall

 

prepare and lay before each House of Parliament a report on the effectiveness,

 

efficiency and economy of the structures and procedures put in place by relevant

 

local authorities, under section 21 of the Local Government Act 2000 (Overview

 

and scrutiny committees), to review the decisions made, or other action taken, by

 

the executives of such local authorities.’.

 



 
 

Consideration of Bill: 17 December 2013                  

1423

 

Local Audit and Accountability Bill-[Lords], continued

 
 

Fraud investigation

 

John McDonnell

 

NC5

 

To move the following Clause:—

 

‘Before section 1 of this Act is brought into force, the Secretary of State shall

 

prepare and lay before each House of Parliament a report on the adequacy of the

 

resources, staffing, structures and procedures put in place by authorities to detect

 

and investigate fraud within the authority effectively.’.

 


 

Compromise agreements

 

John McDonnell

 

NC6

 

To move the following Clause:—

 

‘Before section 1 of this Act is brought into force, the Secretary of State shall

 

prepare and lay before each House of Parliament a report into the extent and

 

appropriateness of the use of compromise agreements, incorporating

 

confidentiality clauses, as provided for by section 203 of the Employment Rights

 

Act 1996, to effect the exit of members of staff from employment by local

 

authorities.’.

 


 

Secretary Eric Pickles

 

1

 

Clause  8,  page  6,  line  43,  at end insert—

 

‘(ba)    

specifies the period for which the local auditor has been appointed,’.

 


 

Andy Sawford

 

John McDonnell

 

13

 

Clause  20,  page  15,  line  24,  at end insert—

 

‘(7)    

A person providing commercial or consultancy services to an authority may not

 

audit those services.

 

(8)    

The audit of any commercial or consultancy services provided by a person

 

appointed as a local auditor must be subcontracted to a different local auditor.’.

 



 
 

Consideration of Bill: 17 December 2013                  

1424

 

Local Audit and Accountability Bill-[Lords], continued

 
 

Andy Sawford

 

John McDonnell

 

14

 

Clause  39,  page  26,  line  11,  leave out ‘one or more specified local authorities’ and

 

insert ‘a local authority’.

 

Andy Sawford

 

John McDonnell

 

Alex Cunningham

 

15

 

Clause  39,  page  26,  line  25,  leave out subsection (4) and insert—

 

‘(4)    

A direction can only be made by the Secretary of State if—

 

(a)    

evidence of a breach of a code has been published by the Secretary of

 

State to the local authority;

 

(b)    

a local authority, on receipt of a letter from the Secretary of State

 

notifying them of evidence which purports to demonstrate a breach of the

 

code has made a response to the Secretary of State within 28 days; and

 

(c)    

upon receiving any response the Secretary of State has published a report

 

detailing his conclusions.’.

 

Andy Sawford

 

John McDonnell

 

16

 

Clause  39,  page  27,  leave out lines 1 to 29.

 


 

Stephen Barclay

 

17

 

Clause  41,  page  30,  line  18,  at end add—

 

‘(c)    

save that any amount levied to provide for the activity of an internal

 

drainage board shall be disregarded for the purposes of calculating an

 

excessive council tax rise.’.

 

Secretary Eric Pickles

 

6

 

Clause  41,  page  30,  line  32,  at end insert—

 

‘(13A)    

Subsections (14) to (16) apply (and subsections (18) to (20) do not apply) if, in

 

accordance with section 49(2A), this section comes into force on the day on

 

which this Act is passed.’.

 

Secretary Eric Pickles

 

7

 

Clause  41,  page  30,  line  37,  after ‘may’, insert ‘, in particular,’.

 

Secretary Eric Pickles

 

8

 

Clause  41,  page  31,  line  2,  at end insert—

 

‘(17)    

Subsections (18) to (20) apply (and subsections (14) to (16) do not apply) if this

 

section comes into force on a day appointed by the Secretary of State by order

 

under section 49(2A).


 
 

Consideration of Bill: 17 December 2013                  

1425

 

Local Audit and Accountability Bill-[Lords], continued

 
 

(18)    

Section 52ZC of the Local Government Finance Act 1992 applies with the

 

following modifications to the determination of a set of principles for the

 

financial year beginning with 1 April 2015.

 

(19)    

The Secretary of State may, in particular, determine categories of authority for

 

that financial year—

 

(a)    

on the basis of whether an authority’s relevant basic amount of council

 

tax for the financial year beginning with 1 April 2013 would have been

 

excessive if that amount for that year and for the immediately preceding

 

financial year had been determined under section 52ZX of the Local

 

Government Finance Act 1992 as amended by this section,

 

(b)    

on the basis of whether an authority’s relevant basic amount of council

 

tax for the financial year beginning with 1 April 2014 would have been

 

excessive if that amount for that year and for the immediately preceding

 

financial year had been determined under that section as so amended, or

 

(c)    

on the basis set out in paragraph (a) and on the basis set out in paragraph

 

(b).

 

(20)    

In subsection (3)(b) of section 52ZC the reference to an authority’s relevant basic

 

amount of council tax for the financial year immediately preceding the year under

 

consideration is to the amount that would have been calculated by the authority

 

for that year under section 52ZX of the Local Government Finance Act 1992 if

 

the amendments made to it by this section had been in force for that year.’.

 

Andy Sawford

 

John McDonnell

 

18

 

Clause  41,  page  31,  line  2,  at end insert—

 

‘(17)    

The Secretary of State may, by Order, exempt from the calculation of an

 

authority’s basic amount of council tax any levies agreed as part of a City Deal

 

signed prior to this Act receiving Royal Assent.’.

 


 

Secretary Eric Pickles

 

2

 

Clause  44,  page  34,  line  19,  at end insert—

 

‘(2A)    

References in this Act to provision made under it include provision made under

 

Part 42 of the Companies Act 2006 as it has effect by virtue of Schedule 5.’.

 


 

Secretary Eric Pickles

 

9

 

Clause  49,  page  36,  line  3,  leave out ‘and’ and insert ‘to’.

 

Secretary Eric Pickles

 

10

 

Clause  49,  page  36,  line  5,  at end insert—

 

‘(2A)    

If this Act is passed before 5 February 2014, section 41 comes into force on the

 

day on which this Act is passed; otherwise that section comes into force on such

 

day as the Secretary of State may by order appoint.’.


 
 

Consideration of Bill: 17 December 2013                  

1426

 

Local Audit and Accountability Bill-[Lords], continued

 
 

Secretary Eric Pickles

 

11

 

Clause  49,  page  36,  line  8,  leave out paragraph (a).

 


 

Secretary Eric Pickles

 

3

 

Schedule  2,  page  42,  line  36,  leave out paragraphs (a) and (b) and insert ‘that is

 

wholly in England’.

 

Andy Sawford

 

John McDonnell

 

12

 

Schedule  2,  page  43,  line  8,  at end insert—

 

‘30      

A Local Enterprise Partnership.’.

 


 

Secretary Eric Pickles

 

4

 

Schedule  4,  page  47,  line  5,  after ‘authority’, insert ‘other than a health service

 

body’.

 


 

Secretary Eric Pickles

 

5

 

Schedule  5,  page  58,  line  3,  leave out sub-paragraph (3) and insert—

 

    ‘(3)  

For paragraph 6 (holding of appropriate qualification) substitute—

 

“Holding of appropriate qualification

 

6    (1)  

The body must have rules to the effect that an individual is not

 

eligible for appointment as a local auditor unless the individual—

 

(a)    

holds an appropriate qualification,

 

(b)    

is an EEA auditor who has passed an aptitude test in

 

accordance with sub-paragraph (3), unless an aptitude test

 

is not required (see sub-paragraphs (4) and (5)), or

 

(c)    

has been authorised to act as a local auditor by the body

 

pursuant to the European Communities (Recognition of

 

Professional Qualifications) Regulations 2007 (SI 2007/

 

2781), and complies with the requirements of those

 

Regulations that apply to a person acting as a local auditor.

 

      (2)  

The body must have rules to the effect that a firm is not eligible for

 

appointment as a local auditor unless—

 

(a)    

each individual responsible for local audit work on behalf

 

of the firm is eligible for appointment as a local auditor, and


 
 

Consideration of Bill: 17 December 2013                  

1427

 

Local Audit and Accountability Bill-[Lords], continued

 
 

(b)    

the firm is controlled by qualified persons (see paragraph 7

 

below).

 

      (3)  

The aptitude test—

 

(a)    

must test the individual’s knowledge of subjects—

 

(i)    

that are covered by a recognised professional

 

qualification,

 

(ii)    

that are not covered by the professional

 

qualification already held by that individual, and

 

(iii)    

the knowledge of which is essential for the pursuit

 

of the profession of local auditor;

 

(b)    

may test the individual’s knowledge of rules of

 

professional conduct;

 

(c)    

must not test the individual’s knowledge of any other

 

matters.

 

      (4)  

No aptitude test is required if—

 

(a)    

the individual is to provide services consisting of local

 

audit work on a temporary and occasional basis, or

 

(b)    

the subjects that are covered by a recognised professional

 

qualification and the knowledge of which is essential for

 

the pursuit of the profession of local auditor are covered by

 

the professional qualification already held by the

 

individual.

 

      (5)  

Whether the provision of services is on a temporary and occasional

 

basis is to be assessed on a case by case basis and in particular by

 

reference to its duration, its frequency, its regularity and its

 

continuity.

 

      (6)  

A firm which has ceased to comply with the conditions mentioned

 

in sub-paragraph (2) may be permitted to remain eligible for

 

appointment as a local auditor for a period of not more than three

 

months.”

 

    (3A)  

In paragraph 7 (meaning of control by qualified persons)—

 

(a)    

in sub-paragraph (1) (introductory), for “paragraph 6(1)(b)” substitute

 

“paragraph 6(2)(b)”, and

 

(b)    

in sub-paragraph (2)(b)(i), (requirement for firm to be eligible for

 

appointment as statutory auditor), for “statutory auditor” substitute

 

“local auditor, or as a statutory auditor in accordance with this Part of

 

this Act as it has effect apart from its application by virtue of Schedule

 

5 to the Local Audit and Accountability Act 2013.”’.

 

 

Order of the House [28 October 2013]

 

That the following provisions shall apply to the Local Audit and Accountability Bill

 

[Lords]:

 

Committal

 

1.    

The Bill shall be committed to a Public Bill Committee.

 

Proceedings in Public Bill Committee

 

2.    

Proceedings in the Public Bill Committee shall (so far as not previously


 
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Revised 17 December 2013