Local Audit and Accountability Bill (HC Bill 129)

27 Right to make objections at audit

(1) This section applies if, at an audit of accounts under this Act other than an
audit of accounts of a health service body, a local government elector for an
area to which the accounts relate makes an objection to the local auditor which
5meets the requirements in subsection (2) and which—

(a) concerns a matter in respect of which the auditor could make a public
interest report, or

(b) concerns a matter in respect of which the auditor could apply for a
declaration under section 28.

(2) 10The requirements are that—

(a) the objection is made in writing, and

(b) a copy of the objection is sent to the relevant authority whose accounts
are being audited.

(3) The local auditor must decide—

(a) 15whether to consider the objection, and

(b) if the auditor does so, whether to take action within paragraph (a) or (b)
of subsection (1) in response.

(4) The local auditor may decide not to consider the objection if, in particular, the
auditor thinks that—

(a) 20the objection is frivolous or vexatious,

(b) the cost of the auditor considering the objection would be
disproportionate to the sums to which the objection relates, or

(c) the objection repeats an objection already considered—

(i) under this section by a local auditor of the authority’s accounts,
25or

(ii) under section 16 of the Audit Commission Act 1998 by an
auditor appointed under that Act in relation to those accounts.

(5) Subsection (4)(b) does not entitle the local auditor to refuse to consider an
objection which the auditor thinks might disclose serious concerns about how
30the relevant authority is managed or led.

(6) If the local auditor decides not to take action within paragraph (a) or (b) of
subsection (1), the auditor may recommend that the relevant authority should
instead take action in response to the objection.

(7) The local auditor’s reasonable costs of exercising functions under this section
35are recoverable from the relevant authority.

28 Declaration that item of account is unlawful

(1) If a local auditor carrying out an audit of accounts under this Act, other than
an audit of accounts of a health service body, thinks that an item of account is
contrary to law, the auditor may apply to the court for a declaration to that
40effect.

(2) On an application under this section, the court—

(a) may make or refuse to make the declaration, and

(b) if it makes the declaration, may also order rectification of the statement
of accounts or accounting records.

(3) A person who has objected under section 27(1)(b) and is aggrieved by a
decision of the local auditor not to consider the objection or not to apply for a
declaration under this section may—

(a) within the period of 6 weeks beginning with the day after that on which
5the person is notified of the decision, require the auditor to provide
written reasons for the decision, and

(b) within the period of 21 days beginning with the day after that on which
the person receives those written reasons, appeal against the decision
to the court.

(4) 10On an appeal under subsection (3), the court has the same powers in relation
to the item of account to which the objection relates as it would have on an
application by the local auditor for the declaration.

(5) On an application or appeal under this section, the court may make an order
for the payment by the relevant authority to which the application or appeal
15relates of expenses incurred in connection with it by the local auditor or the
person by whom the appeal is brought.

(6) Subsection (7) applies if a local auditor of the accounts of a relevant authority
incurs costs in determining whether to make an application under this section
in relation to the authority, but the application is not in fact made.

(7) 20The local auditor may recover the reasonable costs so incurred from the
relevant authority.

(8) The High Court and the county court have jurisdiction for the purposes of this
section.

(9) In this Act “item of account”, in relation to a relevant authority, means an item
25in the authority’s accounting records or statement of accounts.

Prevention of unlawful expenditure etc

29 Advisory notices

Schedule 8 (advisory notices) has effect.

30 Unlawful expenditure or activity of health service bodies

(1) 30A local auditor of the accounts of a health service body must take the steps set
out in subsection (2) if the auditor believes that the body or an officer of the
body—

(a) is about to make, or has made, a decision which involves or would
involve the body incurring unlawful expenditure, or

(b) 35is about to take or has begun to take a course of action which, if
followed to its conclusion, would be unlawful and likely to cause a loss
or deficiency.

(2) The local auditor must, as soon as reasonably practicable—

(a) refer the matter to the Secretary of State, and

(b) 40if the health service body is a clinical commissioning group, notify the
National Health Service Commissioning Board of the matter.

31 Power of auditor to apply for judicial review

(1) A local auditor appointed to audit the accounts of a relevant authority other
than a health service body may make an application for judicial review of a
decision of that authority, or of a failure by that authority to act, which it is
5reasonable to believe would have an effect on the accounts of that body.

(2) Subsection (1) does not affect the requirement in section 31(3) of the Senior
Courts Act 1981 to obtain the leave of the High Court to make the application.

(3) The existence of the powers conferred on a local auditor under this Act is not a
ground for refusing an application within subsection (1) (or an application for
10leave to make the application).

(4) On an application for judicial review made as mentioned in subsection (1), the
court may make such order as it thinks fit for the payment by the relevant
authority of expenses incurred by the local auditor in connection with the
application.

(5) 15Subsection (6) applies if a local auditor of the accounts of a relevant authority
incurs costs in determining whether to make an application under this section
in relation to the authority, but the application is not in fact made.

(6) The local auditor may recover the reasonable costs so incurred from the
relevant authority.

20Accounts and audit regulations

32 Accounts and audit regulations

(1) The Secretary of State may by regulations applying to relevant authorities
other than health service bodies make provision about—

(a) the form and contents of accounting records;

(b) 25the form, contents, preparation and approval of statements of accounts;

(c) the preservation of accounting records or statements of accounts;

(d) the publication of accounting records, statements of accounts or other
information;

(e) the exercise of any rights of objection or inspection conferred by section
3025, 26 or 27 and the steps to be taken by any authority to enable those
rights to be exercised;

(f) the financial management of relevant authorities;

(g) the maintenance by relevant authorities of systems of internal control
(including arrangements for the management of risk).

(2) 35Regulations under subsection (1)(b) may, in particular, make provision about
any information to be provided by way of notes to the accounts.

(3) Before making regulations under this section, the Secretary of State must
consult—

(a) the Comptroller and Auditor General,

(b) 40such representatives of relevant authorities as the Secretary of State
thinks appropriate, and

(c) the recognised supervisory bodies.

(4) Section 14(1)(a) of the Transport Act 1968 (accounts and other records of
Passenger Transport Executives) is subject to regulations under this section.

Part 6 Data matching

33 Data matching

Schedule 9 (data matching) has effect.

5Part 7 Miscellaneous and supplementary

Miscellaneous

34 Best value inspections

Schedule 10 (best value inspections) has effect.

35 10Examinations by the Comptroller and Auditor General

(1) After section 7 of the National Audit Act 1983 insert—

“7ZA Relevant authorities

(1) The Comptroller and Auditor General may carry out examinations into
the economy, efficiency and effectiveness with which relevant
15authorities have used their resources in discharging their functions.

(2) An examination under this section must relate to—

(a) all relevant authorities, or

(b) particular descriptions of relevant authorities.

(3) An examination under this section is to be carried out for the purposes
20of—

(a) ensuring that the use of resources by a department to which
section 6 applies to fund relevant authorities represents an
economical, efficient and effective use of those resources, or

(b) providing evaluation, commentary and advice of a general
25nature to all relevant authorities, or all relevant authorities of a
particular description, as to the economy, efficiency and
effectiveness with which they use their resources in discharging
their functions.

(4) An examination under this section may be combined with another
30examination under this Part.

(5) This section does not entitle the Comptroller and Auditor General to
question—

(a) the merits of the policy objectives of any relevant authority in
respect of which an examination is carried out, or

(b) 35the merits of government policy.

(6) Before carrying out an examination under this section, the Comptroller
and Auditor General must consult—

(a) such associations or representatives of relevant authorities as
the Comptroller and Auditor General thinks appropriate, and

(b) such other persons or bodies as appear to the Comptroller and
Auditor General to be relevant to the examination proposed to
5be carried out.

(7) Subsection (8) applies if the Comptroller and Auditor General—

(a) proposes to carry out an examination under this section, and

(b) considers that the work of the Auditor General for Wales is
relevant to the examination.

(8) 10Before carrying out the examination, the Comptroller and Auditor
General must—

(a) consult the Auditor General for Wales, and

(b) take into account any relevant work done or being done by the
Auditor General for Wales.

(9) 15In deciding whether to carry out an examination under this section, and
in carrying out such an examination, the Comptroller and Auditor
General must have regard to any other relevant examination,
inspection or research (by whatever name) that the Comptroller and
Auditor General knows has been, is or is to be undertaken by other
20persons.

(10) The Comptroller and Auditor General may publish the results of an
examination under this section in such manner as the Comptroller and
Auditor General considers appropriate.

(11) In this Act “relevant authority” has the same meaning as in the Local
25Audit and Accountability Act 2013 (see section 2(1)), except that—

(a) the Common Council of the City of London is a relevant
authority for the purposes of this Act only to the extent that it
exercises functions to which that Act applies,

(b) a health service body within the meaning of that Act (see section
303(9)) is not a relevant authority for the purposes of this Act, and

(c) a chief constable within the meaning of that Act (see section
44(1)) or the Commissioner of Police of the Metropolis is not a
relevant authority for the purposes of this Act.”

(2) Section 8 (rights to obtain documents and information) of that Act is amended
35as follows.

(3) In subsection (1) (right to access documents etc for purposes of examination
under section 6 or 7), for “or 7” substitute “, 7 or 7ZA”.

(4) In subsection (2) (application of subsection (1) rights)—

(a) at the beginning insert “In the case of an examination under section 6 or
407,”,

(b) after “control of” insert “—(a)”, and

(c) at the end insert “, or

(b) where the examination relates in whole or in part to the
use of resources by the department, authority or body to
45fund a relevant authority, that relevant authority.”

(5) After subsection (2) insert—

“(2A) In the case of an examination under section 7ZA, subsection (1) applies
only to documents in the custody or under the control of—

(a) a relevant authority to which the examination relates, or

(b) 5where the examination is undertaken for a purpose within
section 7ZA(3)(a), a department to which section 6 applies and
which funds a relevant authority to which the examination
relates.”

36 Disclosure of information

10Schedule 11 (disclosure of information) has effect.

37 Social security references and reports

(1) A local auditor may refer to the Secretary of State any matter arising from an
audit under this Act if it appears that the matter may be relevant for the
purposes of any of the functions of the Secretary of State relating to social
15security.

(2) In section 139D(1) of the Social Security Administration Act 1992 (directions by
Secretary of State following reports on social security matters)—

(a) in paragraph (b), for “to an authority under section 10(1) of the Audit
Commission Act 1998 and to the Secretary of State under section 39 of
20that Act” substitute “to the Secretary of State under section 37(1) of or
paragraph 3 of Schedule 7 to the Local Audit and Accountability Act
2013”, and

(b) in paragraph (d) omit “section 38(7) of the Audit Commission Act
1998,”.

(3) 25This section has effect until the coming into force of the repeal (by the Welfare
Reform Act 2012) of section 139D of the Social Security Administration Act
1992.

38 Duty of smaller authorities to publish information

In section 2 of the Local Government, Planning and Land Act 1980 (duty of
30authorities to publish information)—

(a) after subsection (1) insert—

“(1A) This section also applies to an authority which—

(a) is not within subsection (1) above;

(b) is not within section 4(4) below; and

(c) 35is, or is treated as, a smaller authority for the purposes
of section 5 of the Local Audit and Accountability Act
2013 (modification of that Act in relation to smaller
authorities).”, and

(b) after subsection (10) insert—

“(11) 40A code issued under this section applies to an authority within
subsection (1A) above only in respect of information relating to
a financial year during which the authority was within that
subsection.

(12) A function under this section or section 3 below that is
expressed to be exercisable by the Secretary of State is
exercisable by the Secretary of State (and not the Welsh
Ministers) in relation to a person or body that—

(a) 5is within subsection (1A), and

(b) exercises functions in relation to an area that is partly in
England and partly in Wales.”

39 Code of practice on local authority publicity

(1) After section 4 of the Local Government Act 1986 insert—

“4A 10Power to direct compliance with code

(1) The Secretary of State may direct one or more specified local authorities
in England to comply with a code issued under section 4 that applies to
that authority or those authorities.

(2) A direction may require compliance with—

(a) 15one or more specified provisions of a code, or

(b) all of the provisions of a specified code.

(3) A direction may—

(a) specify the steps that an authority to which it is given must take
to comply with it;

(b) 20specify the time within which such an authority must comply
with it.

(4) The Secretary of State may give a direction to an authority whether or
not the Secretary of State thinks that the authority is complying with the
code to which it relates.

(5) 25Before giving a direction to an authority, the Secretary of State must
give the authority notice in writing of the proposed direction.

(6) The Secretary of State may not give a direction to an authority before
the end of the period of 14 days beginning with the day on which notice
under subsection (5) was given to it.

(7) 30The authority may make written representations to the Secretary of
State about the proposed direction within that period.

(8) The Secretary of State may modify or withdraw a direction under this
section by notice in writing to the authority or authorities to which it
was given.

(9) 35Subsections (5) to (7) apply to the modification or withdrawal of a
direction as they apply to the giving of a direction, but as if—

(a) the reference to the proposed direction were to the proposed
modification or proposal to withdraw the direction, and

(b) subsection (6) permitted the Secretary of State to withdraw the
40direction before the end of the 14 day period with the agreement
of the authorities to which it applies.

(10) In this section “specified” means specified in a direction under this
section.

4B   Power to make order requiring compliance with code

(1) The Secretary of State may by order made by statutory instrument
impose a duty on all local authorities in England, or all local authorities
in England of a specified description, to comply with a code issued
5under section 4 that applies to those authorities.

(2) An order under this section may impose a duty to comply with—

(a) one or more specified provisions of a code, or

(b) all of the provisions of a specified code.

(3) A order under this section may—

(a) 10specify the steps that an authority to which the duty applies
must take to comply with it;

(b) specify the time within which such an authority must comply
with the duty.

(4) The Secretary of State may make an order under this section which
15applies to an authority whether or not the Secretary of State thinks that
the authority is complying with the code to which the order relates.

(5) An order under this section—

(a) may make different provision for different cases or classes of
case, including different provision for different descriptions of
20local authority;

(b) may make incidental, supplementary, consequential,
transitional or transitory provision or savings.

(6) A statutory instrument containing an order under this section may not
be made unless a draft of the instrument has been laid before and
25approved by a resolution of each House of Parliament.

(7) In this section “specified” means specified in an order under this
section.”

(2) In section 12(3) of that Act (extent), after “Part II” insert “, other than sections
4A and 4B,”.

40 30Access to local government meetings and documents

(1) The Secretary of State may by regulations make provision for and in
connection with allowing persons—

(a) to film, photograph or make sound recordings of proceedings at a
meeting of a body to which this section applies, or of a committee or
35sub-committee of such a body;

(b) to use other means for enabling persons not present at such a meeting
to see or hear proceedings at the meeting, as it takes place or later;

(c) to report or provide commentary on the proceedings at such a meeting,
orally or in writing, so that the report or commentary is available, as the
40meeting takes place or later, to persons not present at the meeting.

(2) Regulations under subsection (1) may in particular make provision—

(a) for allowing persons to make available to the public or a section of the
public using any medium (including the internet) things produced as a
result of activities within that subsection;

(b) about the facilities to be made available by bodies to which the
regulations apply to enable persons to carry on such activities;

(c) about the steps to be taken by persons before carrying on such
activities;

(d) 5about the circumstances in which persons may not carry on such
activities, including for enabling a person specified in the regulations to
prevent them from doing so in the circumstances specified in the
regulations.

(3) The Secretary of State may by regulations make provision—

(a) 10for requiring written records to be kept of decisions that are of a kind
specified in the regulations and are taken by an officer of a body to
which this section applies,

(b) with respect to the information that is to be included in those written
records (including information as to the reasons for any decision);

(c) 15for requiring any such written records, or any documents connected
with the decisions to which they relate, to be supplied or made
available to members of the body, to the public or to other persons;

(d) for the creation of offences in respect of any rights or requirements
conferred or imposed by the regulations.

(4) 20The Secretary of State may by regulations provide that any of the following
may or must be given or made available by electronic means—

(a) any notice which is required by the Public Bodies (Admission to
Meetings) Act 1960, Part 5A of the Local Government Act 1972 (access
to meetings and documents of certain authorities etc) or regulations
25under this section to be given by a body to which this section applies;

(b) any document relating to such a body which is required by that Part or
those regulations to be open to inspection.

(5) Regulations under this section may, in particular, amend or repeal any
provision of—

(a) 30the Public Bodies (Admission to Meetings) Act 1960,

(b) Part 5A or section 228 (inspection of documents) of the Local
Government Act 1972, or

(c) section 58 of the Greater London Authority Act 1999 (application of
Part 5A to the London Assembly).

(6) 35Subject to subsections (7) and (8), this section applies to—

(a) a district council,

(b) a county council in England,

(c) a London borough council,

(d) the London Assembly,

(e) 40the Common Council of the City of London in its capacity as a local
authority or police authority,

(f) the London Fire and Emergency Planning Authority,

(g) Transport for London,

(h) a joint authority established under Part 4 of the Local Government Act
451985,

(i) an economic prosperity board,

(j) a combined authority,

(k) a fire and rescue authority in England constituted by a scheme under
section 2 of the Fire and Rescue Services Act 2004 or a scheme to which
section 4 of that Act applies,

(l) a National Park Authority for a National Park in England,

(m) 5the Broads Authority,

(n) the Council of the Isles of Scilly,

(o) a parish council, and

(p) a parish meeting.

(7) In its application to subsection (1), subsection (6) is to be read as if it included
10a reference to an executive of an authority within paragraph (a), (b) or (c) of
that subsection.

(8) In its application to subsection (3), subsection (6) is to be read as if the reference
in paragraph (d) to the London Assembly were to the Greater London
Authority.

(9) 15References in this section to a committee or sub-committee of a body include
any committee or sub-committee of that body to which Part 5A of the Local
Government Act 1972 applies or is treated as applying.

(10) References in this section to Part 5A of the Local Government Act 1972 include
a reference to that Part as it applies to the London Assembly by virtue of section
2058 of the Greater London Authority Act 1999.

(11) In paragraph 4(2) of Schedule 12 to the Local Government Act 1972 (notice of
meeting of principal council), for “Three clear days” substitute “Five clear
days”.

41 Council tax referendums

(1) 25Chapter 4ZA of Part 1 of the Local Government Finance Act 1992 (referendums
relating to council tax increases) is amended as follows.

(2) In section 52ZG (arrangements for referendum on billing authority’s council
tax increase), after subsection (5) insert—

“(5A) As soon as is reasonably practicable after determining that it is required
30to hold a referendum in relation to its relevant basic amount of council
tax for the financial year, the billing authority must notify that fact in
writing to any body that has issued a levy or a special levy to it for the
financial year.”

(3) In section 52ZH(1) (duty to inform Secretary of State of result of referendum),
35after “the Secretary of State” insert “, and any body the authority was required
to notify under section 52ZG(5A),”.

(4) Section 52ZK (major precepting authority’s duty to notify billing authority of
excessive council tax increase) is amended as follows.

(5) After subsection (1) insert—

“(1A) 40As soon as is reasonably practicable after determining that its relevant
basic amount of council tax for the financial year is excessive, the major
precepting authority must also notify the matters mentioned in
subsection (1) in writing to any body that—

(a) has issued a levy to it for the financial year, or