(b) in the case of the Greater London Authority, has issued a levy
to any constituent body for the financial year.”

(6) In subsection (2) (requirement for notification under section to include
precept), for “this section” substitute “subsection (1)”.

(7) 5In subsection (8) (requirement for Secretary of State to prescribe date by which
notification under section must be made), for “this section” substitute
“subsection (1)”.

(8) In section 52ZO(1) (duty to inform Secretary of State of result of referendum on
precepting authority’s excessive council tax increase), after “the Secretary of
10State” insert “, and any body the authority was required to notify under section
52ZK(1A),”.

(9) Section 52ZX (meaning of relevant basic amount of council tax) is amended as
follows.

(10) In subsection (1) (billing authority’s relevant basic amount of council tax), for
15paragraphs (a) and (b) (disregard of precepts and levies in calculation)
substitute “the amount of any precepts—

(a) issued to it for the year by local precepting authorities, or

(b) anticipated by it in pursuance of regulations under section 41 above.”

(11) In subsection (2) (relevant basic amount of council tax of major precepting
20authority other than county council or Greater London Authority) omit “a
county council or”.

(12) Omit subsection (3) (county council’s relevant basic amount of council tax).

(13) In subsection (4) (Greater London Authority’s relevant basic amount of council
tax), for paragraphs (a) and (b) substitute—

“(a) 25the amount calculated by it in relation to the year under section
88(2) of the Greater London Authority Act 1999 (referred to in
this Chapter as the Greater London Authority’s unadjusted
relevant basic amount of council tax for the year), or

(b) any amount calculated by it in relation to the year under section
3089(3) of that Act (referred to in this Chapter as the Greater
London Authority’s adjusted relevant basic amount of council
tax for the year).”

(14) Section 52ZC of the Local Government Finance Act 1992 (determination of
whether council tax increase is excessive) applies with the following
35modifications to the determination of a set of principles for the financial year
beginning with 1 April 2014.

(15) The Secretary of State may determine categories of authority for that financial
year 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
40if 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.

(16) 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
45year 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.

42 Parish meetings: parish polls

(1) In Part 3 of Schedule 12 to the Local Government Act 1972 (procedure in parish
5meetings), paragraph 18 is amended as follows.

(2) Omit sub-paragraphs (4) to (6).

(3) At the end insert—

“(7) A poll may be demanded before the conclusion of a parish meeting
on any question arising at the meeting, subject to regulations made
10under sub-paragraph (8).

(8) The Secretary of State may by regulations make provision about
polls consequent on parish meetings, in particular about—

(a) the questions arising at a meeting on which a poll may be
demanded,

(b) 15the circumstances in which a poll may or must be taken
(including provision as to the number of local government
electors who must demand a poll for a poll to be taken), and

(c) the conduct of a poll.

(9) Regulations under sub-paragraph (8)(c) may apply any electoral
20enactment (with or without modifications) to polls consequent on
parish meetings.

(10) In sub-paragraph (9) “electoral enactment” means an enactment
which relates to elections or referendums.

For that purpose, “enactment” includes an enactment contained in
25subordinate legislation as defined in section 21(1) of the
Interpretation Act 1978.

(11) A statutory instrument containing regulations under sub-paragraph
(8) is subject to annulment in pursuance of a resolution of either
House of Parliament.”

(4) 30In section 243 of that Act (computation of time and timing of elections, etc)—

(a) in subsection (2) for “rules under paragraph 18 or” substitute
“regulations under paragraph 18 or rules under paragraph 34”,

(b) in subsection (4) before “rules” (in both places it occurs) insert
“regulations or”, and

(c) 35in subsection (5) before “rules” (in both places it occurs) insert
“regulations or”.

Supplementary

43 Orders and regulations

(1) Any power of the Secretary of State or the Minister for the Cabinet Office to
40make regulations or an order under this Act is exercisable by statutory
instrument.

(2) Any power of the Secretary of State or the Minister for the Cabinet Office to
make regulations or an order under this Act includes—

(a) power to make different provision for different cases or classes of case,
including different provision for different authorities;

(b) 5power to make incidental, supplementary, consequential, transitional
or transitory provision or savings.

(3) A statutory instrument containing regulations or an order to which subsection
(4) applies (whether alone or with other provision) may not be made unless a
draft of the instrument has been laid before and approved by a resolution of
10each House of Parliament.

(4) This subsection applies to—

(a) regulations under section 2(3) (power to amend list of relevant
authorities in Schedule 2),

(b) regulations or an order under section 2(5) (power to make provision
15about application of Act to a person or body coming to fall within
Schedule 2) which amends this Act,

(c) regulations under section 3(5)(a) (power to modify financial year of
relevant authority) which amend this Act,

(d) regulations under section 5(1) (modification of Act in relation to smaller
20authorities),

(e) regulations under section 6(5) (power to amend definition of “smaller
authority”),

(f) regulations under section 7(4) (power to amend intervals at which local
auditor must be appointed),

(g) 25regulations under section 17 (appointment of auditor by specified
person),

(h) regulations under section 18(2) (power to amend Schedule 5),

(i) regulations under section 40 which amend or repeal any provision of
an Act,

(j) 30regulations under section 46 (power to make consequential provision)
which amend or repeal any provision of an Act,

(k) regulations under paragraph 2(9) of Schedule 4 (power to amend
definition of “independent” member of auditor panel),

(l) regulations under paragraph 5(1)(a) of that Schedule (power to amend
35etc local authority enactments in their application to auditor panels),

(m) regulations under paragraph 8(3) of that Schedule (power to amend
definition of “connected entity”), and

(n) regulations under paragraph 8 of Schedule 9 (power to amend data-
matching provisions).

(5) 40Any other statutory instrument containing regulations or an order under this
Act is subject to annulment in pursuance of a resolution of either House of
Parliament, subject to subsection (6).

(6) Subsection (5) does not apply to a statutory instrument containing only—

(a) an order under section 49 (commencement),

(b) 45an order under paragraph 2 of Schedule 13 (transitory and saving
provision relating to NHS trusts and trustees of NHS trusts), or

(c) an order under both of those provisions.

(7) If a draft of a statutory instrument containing regulations or an order under
section 2 would, apart from this subsection, be treated for the purposes of the

standing orders of either House of Parliament as a hybrid instrument, it is to
proceed in that House as if it were not such an instrument.

44 Interpretation of Act

(1) In this Act (unless the context otherwise requires)—

• 5“accounts” is to be construed in accordance with section 4(3) to (5);

• “area”—

  (a)

  in relation to a chief constable, means the police area of the chief
  constable’s police force;

  (b)

  in relation to a clinical commissioning group, means the area
  10specified in the group’s constitution (see Schedule 1A to the
  National Health Service Act 2006);

• “charter trustees” means charter trustees constituted—

  (a)

  under section 246 of the Local Government Act 1972,

  (b)

  by the Charter Trustees Regulations 1996 (SI 1996/263SI 1996/263), or

  (c)

  15under Part 1 of the Local Government and Public Involvement
  in Health Act 2007;

• “chief constable” means a chief constable for a police force for a police
  area;

• “code of audit practice” means a code of audit practice under Schedule 6;

• 20“combined authority” means a combined authority established under
  section 103 of the Local Democracy, Economic Development and
  Construction Act 2009;

• “the Common Council” means the Common Council of the City of
  London;

• 25“costs”, in relation to anything done by a local auditor, means the costs of
  the auditor’s time to do that thing, whether or not the auditor charges
  on the basis of the time taken to do it;

• “enactment” includes an enactment contained in subordinate legislation
  as defined in section 21(1) of the Interpretation Act 1978;

• 30“executive” and “executive arrangements” have the same meaning as in
  Part 1A of the Local Government Act 2000;

• “expenses”, in relation to anything done by a local auditor, means the
  expenses incurred by the auditor in doing that thing, including the
  auditor’s costs of doing it;

• 35“financial year” has the meaning given by section 3(4) (subject to
  provision made under section 3(5));

• “functional body” has the same meaning as in the Greater London
  Authority Act 1999 (see section 424(1) of that Act);

• “health service body” has the meaning given by section 3(9);

• 40“item of account” has the meaning given by section 28(9);

• “local auditor” has the meaning given by section 4(1)(b);

• “local government elector” means a person registered as a local
  government elector in the register of electors in accordance with the
  Representation of the People Acts (but see subsection (5));

• 45“officer”, in relation to a relevant authority—

  (a)

  includes a member of the staff of the authority, but

  (b)

  does not include a local auditor appointed to audit the
  authority’s accounts;

Local Audit and Accountability BillPage 34

• “parish meeting” means a parish meeting of a parish which does not have
  a separate parish council;

• “police area” means a police area listed in Schedule 1 to the Police Act 1996
  (police areas outside London);

• 5“public interest report” has the meaning given by paragraph 1(2) of
  Schedule 7;

• “recognised qualifying body” has the meaning given by 1219(12) of the
  Companies Act 2006 as it has effect by virtue of Schedule 5 to this Act;

• “recognised supervisory body” is to be construed in accordance with
  10section 1217(4) of and Schedule 10 to the Companies Act 2006 as they
  have effect by virtue of Schedule 5 to this Act;

• “recommendation” means a recommendation under paragraph 2(1) of
  Schedule 7;

• “related authority” has the meaning given by paragraph 2(6) of Schedule
  157;

• “relevant authority” has the meaning given by section 2(1);

• “special trustees for a hospital” has the meaning given by section 3(9)(b).

(2) References in this Act to a function under this Act or a Part of this Act include
a function under regulations under this Act or that Part.

(3) 20References in this Act to an entity connected with a relevant authority or to a
connected entity are to be construed in accordance with paragraph 8 of
Schedule 4.

(4) References in this Act to persons for whom a clinical commissioning group is
responsible are to be construed in accordance with section 3 of the National
25Health Service Act 2006 (duties of clinical commissioning groups as to
commissioning certain health services).

(5) A reference in this Act to a local government elector for any area—

(a) in relation to a Passenger Transport Executive, is a reference to a local
government elector for the area of the Integrated Transport Authority
30or combined authority for the area for which the Executive is
established;

(b) in relation to the Broads Authority, is a reference to a local government
elector for the area of any participating authority (as defined by section
25 of the Norfolk and Suffolk Broads Act 1988);

(c) 35in relation to a National Park authority which is the local planning
authority for a National Park, is a reference to a local government
elector for any area the whole or any part of which is comprised in that
Park.

(6) Any function conferred or imposed on the Greater London Authority under or
40by virtue of this Act is exercisable by the Mayor of London acting on behalf of
the Authority.

(7) Subsection (6) does not apply in relation to any function expressly conferred
on—

(a) the London Assembly, or

(b) 45the Mayor of London and the London Assembly acting jointly on behalf
of the Greater London Authority.

(8) Any function conferred or imposed on a parish meeting under or by virtue of
this Act, other than a function expressly conferred on the parish meeting itself,

is exercisable by the chairman of the parish meeting acting on behalf of the
authority.

(9) References in this Act to accounts, accounting records or statements of account
in relation to the Common Council are to its accounts, accounting records or
5statements of account so far as relating to—

(a) the collection fund of the Common Council,

(b) the City Fund, or

(c) a pension fund maintained and administered by the Common Council
under regulations under section 1 of the Public Service Pensions Act
102013.

45 Related amendments

Schedule 12 (related amendments) has effect.

46 Power to make consequential provision

(1) The Secretary of State may by regulations make such consequential, incidental
15or supplementary provision as the Secretary of State considers appropriate in
connection with any provision of, or made under, this Act.

(2) The power in subsection (1) includes power to amend, repeal or revoke any
provision of or made under an Act (including this Act) whenever passed or
made.

47 20Application to NHS trusts and trustees for NHS trusts

Schedule 13 (NHS trusts and trustees for NHS trusts: transitory and saving
provision) has effect.

48 Extent

(1) This Act extends to England and Wales only, subject as follows.

(2) 25An amendment, repeal or revocation made by this Act, other than one
mentioned in subsection (3), has the same extent as the relevant part of the Act
or instrument amended, repealed or revoked.

(3) Subsection (2) does not apply to the amendment made by section 39(1) (power
to require compliance with local authority publicity code), which extends to
30England and Wales only.

(4) The following provisions of this Act extend to England and Wales, Scotland
and Northern Ireland—

(a) section 43 (orders and regulations) so far as it applies to regulations
under section 46 or an order under section 49;

(b) 35section 45 (related amendments) so far as it applies to amendments,
repeals and revocations within subsection (2) of this section;

(c) section 46 (power to make consequential provision);

(d) this section;

(e) section 49 (commencement);

(f) 40section 50 (short title).

49 Commencement

(1) The provisions of this Act come into force on such day as the Secretary of State
may by order appoint, subject to subsections (2) and (3).

(2) Sections 39 and 40 come into force at the end of the period of 2 months
5beginning with the day on which this Act is passed.

(3) The following provisions come into force on the day on which this Act is
passed—

(a) section 41;

(b) section 43;

(c) 10section 44;

(d) section 46;

(e) section 48;

(f) this section;

(g) section 50.

(4) 15An order under this section may—

(a) appoint different days for different purposes or different areas;

(b) make transitional, transitory or saving provision.

(5) Provision under subsection (4)(b) may, in particular, enable a function of the
Audit Commission under—

(a) 20a provision that is amended or repealed by this Act, or

(b) any of sections 139A to 139C of the Social Security Administration Act
1992,

to be exercised by a person or body, or by the persons or bodies, specified in
the order for a period specified in or determined under the order.

(6) 25Where provision under subsection (4)(b) made by virtue of subsection (5)
enables a function to be exercised by a Minister of the Crown, an order under
this section may enable the Minister to delegate the exercise of that function to
another person or body or other persons or bodies.

(7) An order under this section which makes provision under subsection (4)(b) by
30virtue of subsection (5) or (6) may in particular provide for references in an
enactment to the Audit Commission to be read as references to the person or
body or persons or bodies by whom the function may be exercised.

(8) Provision under subsection (4)(b) may, in particular, provide for the first local
auditor appointed by a relevant authority under subsection (1) of section 7 to
35be appointed on a date later than that specified in that subsection.

(9) In this section “the Audit Commission” means the Audit Commission for Local
Authorities and the National Health Service in England.

50 Short title

This Act may be cited as the Local Audit and Accountability Act 2013.

SCHEDULES

Section 1

SCHEDULE 1 Abolition of Audit Commission: supplementary provision

Part 1 5Arrangements in connection with abolition of Audit Commission

Transfer of property, rights and liabilities

1 (1) The Secretary of State may make one or more schemes for the transfer of
property, rights and liabilities of the Audit Commission to a person or
persons specified in the scheme.

(2) 10The things that may be transferred under a transfer scheme include—

(a) property, rights and liabilities that could not otherwise be
transferred;

(b) property acquired, and rights and liabilities arising, after the making
of the scheme.

(3) 15A transfer scheme may make consequential, supplementary, incidental or
transitional provision and may in particular—

(a) create rights, or impose liabilities, in relation to property or rights
transferred;

(b) make provision about the continuing effect of things done by the
20transferor in respect of anything transferred;

(c) make provision about the continuation of things (including legal
proceedings) in the process of being done by, on behalf of or in
relation to the transferor, in respect of anything transferred;

(d) make provision for references to the transferor in an instrument or
25other document in respect of anything transferred to be treated as
references to the transferee;

(e) make provision for the shared ownership or use of property;

(f) if the TUPE regulations do not apply in relation to the transfer, make
provision which is the same or similar.

(4) 30A transfer scheme may, in such cases as may be specified in the scheme,
provide for a person’s period of employment before the person was
employed by the Audit Commission (as well as the person’s period of
employment by the Audit Commission) to be treated as a period of
employment with the transferee for the purposes of the scheme or, if they
35apply in relation to the transfer, the TUPE regulations.

(5) A transfer scheme may provide—

(a) for modification by agreement;

(b) for modifications to have effect from the date when the original
scheme came into effect.

(6) In this paragraph—

(a) “TUPE regulations” means the Transfer of Undertakings (Protection
5of Employment) Regulations 2006 (SI 2006/246SI 2006/246), and

(b) references to rights and liabilities include rights and liabilities under
a contract of employment.

Reduction in membership pending abolition

2 Until the coming into force of section 1, in section 1(2) of the Audit
10Commission Act 1998 (Audit Commission to consist of not less than 10 nor
more than 15 members) there is omitted the words “less than 10 nor”.

Final accounts

3 (1) As soon as is reasonably practicable after the abolition date, the Secretary of
State must prepare—

(a) 15a statement of account for the Audit Commission for the last
financial year to end before the abolition date, and

(b) a statement of account for the Audit Commission for the period (if
any) beginning immediately after the end of that financial year and
ending immediately before the abolition date.

(2) 20A statement of account under this paragraph must be prepared in
accordance with the last direction given by the Secretary of State to the Audit
Commission under paragraph 11(1) of Schedule 1 to the Audit Commission
Act 1998.

(3) The Secretary of State must, as soon as is reasonably practicable after
25preparing a statement of account under this paragraph, send a copy of it to
the Comptroller and Auditor General.

(4) The Comptroller and Auditor General must—

(a) examine, certify and report on the statement of account, and

(b) make arrangements for a copy of the statement and the report to be
30laid before Parliament.

(5) Sub-paragraph (1)(a) does not apply if the Audit Commission has already
sent a copy of the statement of account for that year to the Comptroller and
Auditor General.

(6) In that case, the repeal by this Act of paragraph 11 of Schedule 1 to the Audit
35Commission Act 1998 does not remove the obligation of the Comptroller
and Auditor General to take the steps specified in that paragraph in relation
to the statement of account if the Comptroller has not already done so.

(7) In this paragraph “financial year” means the period of 12 months ending
with 31st March in any year.

40Final annual report

4 (1) As soon as is reasonably practicable after the abolition date, the Secretary of
State must publish a report on the discharge of the functions of the Audit
Commission.

(2) The report must relate to the period—

(a) beginning immediately after the period covered by the last annual
report published by the Audit Commission, and

(b) ending immediately before the abolition date.

(3) 5The Secretary of State must lay an annual report published under this
paragraph before Parliament.

(4) The repeal by this Act of paragraph 14(2) of Schedule 1 to the Audit
Commission Act 1998 does not remove the obligation of the Secretary of
State to lay copies of an annual report received from the Audit Commission
10before each House of Parliament if the Secretary of State has not already
done so.

Payments in respect of pension liabilities

5 The Secretary of State may make payments to any person to enable that
person to meet—

(a) 15liabilities arising as the result of provision made under paragraph
5(2) of Schedule 1 to the Audit Commission Act 1998 for the payment
of sums by way of pension, allowances or gratuities, or

(b) liabilities under the pension scheme established under paragraph
7(4)(c) of that Schedule.

20Meaning of “the abolition date”

6 In this Schedule “the abolition date” means the date on which section 1(1)
(abolition of Audit Commission) comes into force.

Part 2 Repeal of Audit Commission Act 1998: consequential repeals and revocations

Section 2

SCHEDULE 2 Relevant authorities

1 A county council in England.

2 A district council.

3 5A London borough council.

4 A parish council.

5 A joint authority established under Part 4 of the Local Government Act 1985.

6 A Passenger Transport Executive.

7 The Greater London Authority.

8 5A functional body.

9 The London Pensions Fund Authority.

10 The London Waste and Recycling Board.

11 The Common Council.

• NOTE: This Act applies to the Common Council only to the extent that it
  10exercises functions in relation to—

  (a)

  the collection fund of the Common Council,

  (b)

  the City Fund, or

12 A parish meeting.

13 The Council of the Isles of Scilly.

14 15Charter trustees.

15 A port health authority for a port health district that is wholly in England.

16 The Broads Authority.

17 A National Park authority for a National Park in England.

18 A conservation board established by order of the Secretary of State under
20section 86 of the Countryside and Rights of Way Act 2000.

19 A police and crime commissioner for a police area in England.

20 A chief constable for an area in England.

21 The Commissioner of Police of the Metropolis.

22 A fire and rescue authority in England constituted by a scheme under
25section 2 of the Fire and Rescue Services Act 2004 or a scheme to which
section 4 of that Act applies.

23 A clinical commissioning group.

24 Special trustees for a hospital.

25 An authority established for an area in England by an order under section
30207 of the Local Government and Public Involvement in Health Act 2007
(joint waste authorities).

26 An internal drainage board for an internal drainage district—

(a) wholly in England, or

(b) partly in England and partly in Wales.

27 35An economic prosperity board established under section 88 of the Local
Democracy, Economic Development and Construction Act 2009.

28 A combined authority.

29 Any person or body exercising functions in relation to an area wholly in
England or partly in England and partly in Wales—

(a) which was originally subject to audit provisions contained in an
5enactment passed before the Audit Commission Act 1998, and

(b) to which the audit provisions of that Act applied by virtue of
paragraph 4(1) or 7 of Schedule 4 to that Act immediately before the
repeal of section 2(1) of that Act by this Act.

Section 7

SCHEDULE 3 10Further provisions about appointment of local auditors

Provisions applying to certain local authorities

1 (1) If a relevant authority is a local authority operating executive arrangements,
the function of appointing a local auditor to audit its accounts is not the
responsibility of an executive of the authority under those arrangements.

(2) 15If a relevant authority is a local authority within the meaning of section 101
of the Local Government Act 1972 (arrangements for discharge of functions),
that section does not apply to the authority’s function of appointing a local
auditor to audit its accounts.

(3) A local auditor appointed to audit the accounts of the Greater London
20Authority must be appointed by the Mayor of London and the London
Assembly acting jointly on behalf of the Authority.

(4) A local auditor appointed to audit the accounts of a parish meeting must be
appointed by the parish meeting itself (and not by its chairman on behalf of
the parish meeting).

25Provisions applying to chief constables

2 (1) This paragraph applies to the accounts for a financial year of a chief
constable for an area.

(2) The chief constable must not appoint a local auditor to audit the accounts.

(3) The accounts must be audited by the local auditor appointed by the police
30and crime commissioner for the area to audit the commissioner’s accounts
for the financial year.

(4) The police and crime commissioner must consult and take into account the
advice of the commissioner’s auditor panel on the selection and
appointment of the local auditor.

35Provisions applying to the Commissioner of Police of the Metropolis

3 (1) This paragraph applies to the accounts for a financial year of the
Commissioner of Police of the Metropolis.

(2) The Commissioner of Police of the Metropolis must not appoint a local
auditor to audit the accounts.

(3) The accounts must be audited by the local auditor appointed by the Mayor’s
Office for Policing and Crime to audit the Office’s accounts for the financial
year.

(4) The Mayor’s Office for Policing and Crime must consult and take into
5account the advice of the Office’s auditor panel on the selection and
appointment of the auditor.

Provisions applying to other authorities

4 (1) The Secretary of State may by regulations make provision about the
appointment of a local auditor to audit the accounts of a relevant authority—

(a) 10which is not an authority to which any of paragraphs 1 to 3 applies,
and

(b) which is specified, or of a description specified, in the regulations.

(2) Regulations under sub-paragraph (1) may, in particular—

(a) make further provision about the operation of this Act or any
15provision made under it in relation to a relevant authority to which
the regulations apply;

(b) provide for any provision of or made under this Act not to apply, or
to apply with modifications, in relation to a relevant authority to
which the regulations apply.

Section 9

20SCHEDULE 4 Further provisions about auditor panels

Options for auditor panels

1 (1) The auditor panel of a relevant authority (“R”) must be—

(a) a panel appointed as an auditor panel by R,

(b) 25a panel appointed as an auditor panel by R and one or more other
relevant authorities,

(c) a committee of R to which sub-paragraph (2) applies, or

(d) a panel to which sub-paragraph (3) applies.

(2) This sub-paragraph applies to a committee of R (however described) which
30has not been appointed as an auditor panel if—

(a) R determines that the committee should be R’s auditor panel,

(b) the committee agrees to be R’s auditor panel, and

(c) the committee complies with the other provisions applying to
auditor panels made by or under this Schedule.

(3) 35This sub-paragraph applies to a panel if—

(a) the panel is (by virtue of any of paragraphs (a) to (c) of sub-
paragraph (1)) the auditor panel of a relevant authority other than R,

(b) R determines that the panel should be R’s auditor panel,

(c) the panel agrees to be R’s auditor panel, and

(d) 40the panel complies (as regards R) with the other provisions applying
to auditor panels made by or under this Schedule.

(4) References in sub-paragraphs (1) and (2) to a committee of R include a sub-
committee of a committee of R.

(5) The function of appointing a panel or making a determination under this
paragraph is to be exercised in the case of the Greater London Authority by
5the Mayor of London and the London Assembly acting jointly on behalf of
the Authority.

(6) The function of appointing a panel or making a determination under this
paragraph is to be exercised in the case of a parish meeting by the parish
meeting itself (and not by its chairman on behalf of the parish meeting).

10Constitution of auditor panels

2 (1) A relevant authority’s auditor panel, other than a health service body’s
auditor panel—

(a) must consist of a majority of independent members (or wholly of
independent members), and

(b) 15must be chaired by an independent member.

(2) A member of a relevant authority’s auditor panel, other than a health service
body’s auditor panel, is “independent” at any given time if—

(a) the panel member has not been a member or officer of the authority
within the period of 5 years ending with that time,

(b) 20the panel member has not been an officer or employee of an entity
connected with the authority within that period, and

(c) the panel member is not at that time a relative or close friend of a
member or officer of the authority or an officer or employee of an
entity connected with the authority.

(3) 25An elected mayor of a relevant authority is not independent of that authority
for the purposes of sub-paragraph (1).

(4) In the application of sub-paragraph (2) to a corporation sole, the reference to
a member is a reference to a holder of that office.

(5) In the application of sub-paragraph (2) to the auditor panel of a police and
30crime commissioner for an area, references to the authority include the chief
constable for the area.

(6) In the application of sub-paragraph (2) to the auditor panel of the Mayor’s
Office for Policing and Crime, references to the authority include the
Commissioner of Police of the Metropolis.

(7) 35In sub-paragraph (2) “officer”, in relation to an entity connected with a
relevant authority, means a person elected or appointed as, or to, that entity
or to an office of that entity.

(8) For the purposes of sub-paragraph (2)(c), a person (“R”) is a relative of
another person (“P”) if R is—

(a) 40P’s partner,

(b) P’s parent or grandparent,

(c) P’s son, daughter, stepson, stepdaughter or grandchild,

(d) P’s brother or sister,

(e) P’s uncle, aunt, nephew or niece,

(f) a parent, son, daughter, brother or sister of P’s partner, or

(g) a partner of any person within paragraphs (b) to (f),

and for this purpose “partner” means a spouse, civil partner or someone a
5person lives with as if they were husband and wife or civil partners.

(9) The Secretary of State may by regulations amend this paragraph so as to
make provision about the members of a relevant authority’s auditor panel
who are or are not independent for the purposes of sub-paragraph (1).

Constitution of auditor panels: health service bodies

3 10The Secretary of State may by regulations make provision about—

(a) whether any of the members of a health service body’s auditor panel
must be independent and, if so, the proportion which must be
independent;

(b) whether the chair of a health service body’s auditor panel must be
15independent;

(c) the meaning of “independent” for the purposes of this paragraph.

Power to make further provision about constitution of auditor panels

4 (1) The Secretary of State may by regulations make provision about the
constitution of an auditor panel.

(2) 20This includes further provision about the matters mentioned in paragraph
2(1) and provision about—

(a) the number of members of an auditor panel;

(b) the appointment of members of an auditor panel (including to fill
casual vacancies);

(c) 25the term of office of members of an auditor panel;

(d) the removal or resignation of members of an auditor panel, or of its
chair;

(e) the payment of remuneration or allowances to members of an
auditor panel;

(f) 30the proceedings and validity of proceedings of an auditor panel.

(3) The regulations may provide for any of those matters to be determined for a
relevant authority’s auditor panel by the authority.

Application of local authority enactments to auditor panels

5 (1) The Secretary of State may by regulations—

(a) 35amend or otherwise modify any local authority enactment in its
application to auditor panels or members of auditor panels;

(b) apply any local authority enactment (with or without modifications)
to auditor panels or members of auditor panels if, or to the extent
that, it does not otherwise apply.

(2) 40In this paragraph—

• “local authority” means a county council, a district council, a London
  borough council, the Common Council or the Council of the Isles of
  Scilly;

• “local authority enactment” means an enactment which relates to—

  Local Audit and Accountability BillPage 48

  (a)

  local authorities or committees or joint committees of local
  authorities, or

  (b)

  members of such authorities, committees or joint committees.

Status of auditor panels

6 (1) 5Where a relevant authority has determined that a committee of that
authority should be its auditor panel, the panel when acting as such is not to
be treated as a committee of the authority for the purposes of any enactment.

(2) Sub-paragraph (1) is subject to provision made by regulations under
paragraph 5.

(3) 10References in this paragraph to a committee of a relevant authority include
a sub-committee of such a committee.

Expenses of auditor panels

7 A relevant authority must meet the reasonable expenses of its auditor panel
incurred by the panel when acting as such.

15Meaning of “connected entity”

8 (1) For the purposes of this Act, an entity (“E”) is connected with a relevant
authority at any time if E is an entity other than the relevant authority and
the relevant authority considers that, in accordance with proper practices in
force at that time—

(a) 20the financial transactions, reserves, assets and liabilities of E are to be
consolidated into the relevant authority’s statement of accounts for
the financial year in which that time falls,

(b) the relevant authority’s share of the financial transactions, reserves,
assets and liabilities of E is to be consolidated into the relevant
25authority’s statement of accounts for that financial year, or

(c) the relevant authority’s share of the net assets or net liabilities of E,
and of the profit or loss of E, are to be brought into the relevant
authority’s statement of accounts for that financial year.

(2) In sub-paragraph (1) “entity” means any entity, whether or not a legal
30person.

(3) The Secretary of State may by regulations amend sub-paragraph (1) or (2).

(4) In sub-paragraph (1) as it applies in relation to a health service body, the
reference to the relevant authority’s statement of accounts is to be read as a
reference to the body’s accounts.

Section 18

35SCHEDULE 5 Eligibility and regulation of local auditors

1 (1) Part 42 of the Companies Act 2006 (statutory auditors) applies in relation to
local audits as it applies in relation to statutory audits within the meaning of
that Part, subject to—

(a) 40the general modifications to that Part in paragraph 2, and

(b) the specific modifications to that Part in the rest of this Schedule.

(2) For the purposes of this Schedule—

• a “local audit” means an audit under this Act of the accounts of a
  relevant authority;

• 5“local audit work” means work in connection with such audits.

(3) The reference in sub-paragraph (1) to Part 42 of the Companies Act 2006
includes sections 1288, 1289, 1290 and 1292 of that Act (regulations and
orders) as they apply in relation to that Part.

2 (1) The general modifications are that—

(a) 10references to a statutory auditor are to a local auditor,