Local Audit and Accountability Bill (HL Bill 4)

(3) In paragraph 8 (advice or assistance for other public authorities)—

(a) after sub-paragraph (1) insert—

“(1A) The Chief Inspector may—

(a) if the Chief Inspector agrees, be appointed as an
5inspector or assistant inspector under section 10 of
the Local Government Act 1999 (inspection of best
value authorities), or

(b) co-operate with, or do anything else to facilitate,
the carrying out of the functions of an inspector or
10assistant inspector appointed under that section.”,
and”

(b) for sub-paragraph (2) substitute—

“(2) Anything done under this paragraph may be done on such
terms as the Chief Inspector thinks fit.”

(4) 15In paragraph 10(a) (charges for advice or assistance) for “providing advice
or assistance” substitute “doing anything”.

National Health Service Act 2006 (c. 41)National Health Service Act 2006 (c. 41)

55 The National Health Service Act 2006 is amended as follows.

56 In Schedule 1A (clinical commissioning groups), in paragraph 17(5), for the
20words from “Audit Commission Act 1998” to the end substitute “Local
Audit and Accountability Act 2013, by a local auditor appointed by the
clinical commissioning group in accordance with that Act”.

57 In Schedule 4 (NHS trusts established under the National Health Service Act
2006), in paragraph 12—

(a) 25in sub-paragraph (2)(b) omit “section 8 of the Audit Commission Act
1998 (c. 18)1998 (c. 18) or”, and

(b) omit sub-paragraph (2A).

58 Schedule 7 (constitution of public benefit corporations: auditors) is amended
as follows.

59 (1) 30Paragraph 23 is amended as follows.

(2) In sub-paragraph (3)—

(a) after “may be” insert “an individual or a firm”, and

(b) omit paragraphs (a) to (c).

(3) In sub-paragraph (4)—

(a) 35after paragraph (a) insert—

“(aa) eligible for appointment as a local auditor (see Part
4 of the Local Audit and Accountability Act 2013),
or”, and

(b) omit paragraph (b).

(4) 40Omit sub-paragraph (5).

(5) In sub-paragraph (7)—

(a) omit the definition of “the Audit Commission” (and the “and” which
follows it), and

(b) in the definition of “firm” for “the Audit Commission Act 1998 (see
section 51(3) of that Act)” substitute “section 1261(1) of the
Companies Act 2006”.

60 (1) Paragraph 24 is amended as follows.

(2) 5After sub-paragraph (4) insert—

“(4A) The auditor must, in carrying out functions in relation to the
accounts—

(a) comply with the code of audit practice applicable to the
accounts that is for the time being in force (see Schedule 6
10to the Local Audit and Accountability Act 2013), and

(b) have regard to guidance issued by the Comptroller and
Auditor General under paragraph 9 of that Schedule (as it
has effect by virtue of paragraph 10(6) of that Schedule).

(4B) The auditor of the accounts must comply with any directions
15given by the Secretary of State as to arrangements to monitor the
standard of the work of auditors in the performance of audits
under this paragraph (including arrangements to inspect that
work).

(4C) The arrangements mentioned in sub-paragraph (4B) may include
20arrangements made by the regulator or by any other person the
Secretary of State considers appropriate.”

(3) Omit sub-paragraph (5).

61 In Schedule 15 (accounts and audit of certain NHS bodies), in paragraph 4—

(a) in sub-paragraph (2) for the words from “Audit Commission Act
251998” to the end substitute “Local Audit and Accountability Act
2013, by a local auditor appointed by the body in accordance with
that Act”, and

(b) omit sub-paragraph (4).

Companies Act 2006 (c. 46)Companies Act 2006 (c. 46)

62 30In Part 1 of Schedule 11A to the Companies Act 2006 (specified persons for
the purposes of the disclosure provisions in section 1224A of that Act), after
paragraph 17 insert—

“17A A recognised supervisory body as defined in section 1217(4) and
Schedule 10 as they have effect by virtue of Schedule 5 to the Local
35Audit and Accountability Act 2013.

17B A recognised qualifying body as defined in 1219(12) as it has effect
by virtue of that Schedule.

17C A body designated by the Secretary of State under section 1252
(delegation of the Secretary of State’s functions) as it has effect by
40virtue of that Schedule.

17D A body with which a recognised supervisory body within the
meaning of that Act is participating in arrangements for the
purposes of paragraph 23 (independent monitoring of certain
audits) or 24 (independent investigation of public interest cases) of
45Schedule 10 as it has effect by virtue of that Schedule.”

Serious Crime Act 2007 (c. 27)Serious Crime Act 2007 (c. 27)

63 In paragraph 9 of Schedule 13 to the Serious Crime Act 2007 (modification of
section 32D(8)(b) of the Audit Commission Act 1998 pending increase in
magistrates’ court sentencing powers) omit paragraph (a).

5Local Government and Public Involvement in Health Act 2007 (c. 28)Local Government and Public Involvement in Health Act 2007 (c. 28)

64 The Local Government and Public Involvement in Health Act 2007 is
amended as follows.

65 Omit section 148 (Benefit Fraud Inspectorate: transfers to the Audit
Commission).

66 10In section 212(7) (entities controlled by local authorities: definitions)—

(a) for the definition of “financial year” substitute—

• ““financial year” means a period for which—

  (a)

  a statement of accounts of the local authority
  must be prepared by reason of section 3 of the
  15Local Audit and Accountability Act 2013, or

  (b)

  accounts of the local authority must be
  prepared by reason of section 13 of the Public
  Audit (Wales) Act 2004;”, and

(b) in the definition of “local authority” for paragraph (b) substitute—

“(b) 20if it is a Welsh local authority, is required to prepare
statements of accounts by regulations made under
section 39 of the Public Audit (Wales) Act 2004;”.

67 (1) Section 214 (further provision about orders under section 212) is amended as
follows.

(2) 25In subsection (1)—

(a) after “section 212” insert “made by the Welsh Ministers”,

(b) before “local authority” insert “Welsh”, and

(c) for “the appropriate person” substitute “the Auditor General for
Wales”.

(3) 30Omit subsection (2).

(4) In subsection (9) after “qualifying person” insert—

• “Welsh local authority;”.

(5) Omit subsection (10).

68 Omit Schedule 10 (Benefit Fraud Inspectorate: transfer schemes).

69 (1) 35The repeals of section 148 of and Schedule 10 to the Local Government and
Public Involvement in Health Act 2007 by paragraphs 65 and 68 do not
affect—

(a) the transfers of property, rights and liabilities of the Secretary of State
or a person authorised under section 139A of the Social Security
40Administration Act 1992 to the Audit Commission by a scheme
under that section and that Schedule, or

(b) the operation of that section and that Schedule or of such a scheme in
relation to those transfers.

(2) Sub-paragraph (1) is subject to the provisions of a transfer scheme under
paragraph 1 of Schedule 1 (transfer of property, rights and liabilities to
Audit Commission).

(3) In this paragraph “the Audit Commission” means the Audit Commission for
5Local Authorities and the National Health Service in England.

Health and Social Care Act 2008 (c. 14)Health and Social Care Act 2008 (c. 14)

70 The Health and Social Care Act 2008 is amended as follows.

71 Omit section 56 (role of Audit Commission in undertaking or promoting
health care studies).

72 (1) 10Schedule 4 (interaction between Care Quality Commission and other
authorities) is amended as follows.

(2) In paragraph 1 (meaning of inspection authorities)—

(a) in sub-paragraph (2)—

(i) at the end of paragraph (d) insert “, and”, and

(ii) 15omit paragraph (g) and the “and” preceding it, and

(b) in sub-paragraph (3)—

(i) at the end of paragraph (d) insert “, and”, and

(ii) omit paragraph (g) and the “and” preceding it.

(3) In paragraph 9 (advice or assistance for other public authorities)—

(a) 20after sub-paragraph (1) insert—

“(1A) The Commission may—

(a) if the Commission agrees, be appointed as an
inspector or assistant inspector under section 10 of
the Local Government Act 1999 (inspection of best
25value authorities), or

(b) co-operate with, or do anything else to facilitate,
the carrying out of the functions of an inspector or
assistant inspector appointed under that section.”,
and”

(b) 30for sub-paragraph (2) substitute—

“(2) Anything done under this paragraph may be done on such
terms, including terms as to payment, as the Commission
thinks fit.”

Housing and Regeneration Act 2008 (c. 17)2008 (c. 17)

73 35The Housing and Regeneration Act 2008 is amended as follows.

74 Omit section 106A (co-operation between the Regulator of Social Housing
and the Audit Commission).

75 In section 128(4)(a) (duty of local authority which is registered provider of
social housing to send reports under section 8 of the Audit Commission Act
401998 to the Regulator), for “any immediate report under section 8 of the
Audit Commission Act 1998 (immediate and other reports in the public
interest)” substitute “any report under paragraph 1 of Schedule 7 to the
Local Audit and Accountability Act 2013 (public interest reports)”.

76 In section 196(1) (duty of Regulator to consult listed bodies before setting
standards etc) omit paragraph (d) (the Audit Commission).

77 In section 197(4) (duty of Secretary of State to consult listed bodies before
giving direction to Regulator) omit paragraph (c).

78 5In section 201 (arrangements by Regulator for inspections by third party)
omit subsection (7A) (inspections treated as carried out by regulator for
purposes of Schedule 2A to the Audit Commission Act 1998).

Local Democracy, Economic Development and Construction Act 2009 (c. 20)Local Democracy, Economic Development and Construction Act 2009 (c. 20)

79 Chapter 3 of Part 2 of the Local Democracy, Economic Development and
10Construction Act 2009 (audit of entities connected with local authorities) is
amended as follows.

80 (1) Section 36 (overview of Chapter) is amended as follows.

(2) In subsection (1)—

(a) for “an audit authority” substitute “the Auditor General for Wales”,
15and

(b) omit “English or”.

(3) Omit subsections (2) and (4).

(4) In subsection (6)(b) omit “section 27 of the Audit Commission Act 1998
(c. 18) or”.

81 20In section 37 (notification duties of local authorities) omit subsection (1).

82 (1) Section 38 (power to appoint auditor) is amended as follows.

(2) In subsection (1), for “an audit authority” substitute “the Auditor General for
Wales”.

(3) In subsection (3)(b)(ii)—

(a) 25for “audit authority” substitute “Auditor General for Wales”, and

(b) for “37(1)(a) or (2)(a)” substitute “37(2)(a)”.

(4) Omit subsection (4).

(5) In subsection (6), for “appointing audit authority” substitute “Auditor
General for Wales”.

(6) 30Omit subsection (7).

(7) In subsection (8), for “appointing audit authority” substitute “Auditor
General for Wales”.

83 (1) Section 39 (power to appoint replacement auditor) is amended as follows.

(2) In subsection (1) for “an audit authority” substitute “the Auditor General for
35Wales”.

(3) For the remaining references to “audit authority” substitute “Auditor
General for Wales”.

84 (1) Section 40 (exclusions from power to appoint auditor) is amended as
follows.

(2) In subsection (1), for “An audit authority” substitute “The Auditor General
for Wales”.

(3) In each of subsections (2) to (4), for “appointing audit authority” substitute
“Auditor General for Wales”.

(4) 5In subsection (5) for “audit authority” substitute “Auditor General for
Wales”.

85 In section 41(1) (persons who may be appointed as auditor)—

(a) in paragraph (a), for “appointing audit authority” substitute
“Auditor General for Wales”, and

(b) 10in paragraph (b), for “that authority” substitute “the Auditor General
for Wales”.

86 (1) Section 42 (terms of appointment of auditor) is amended as follows.

(2) In subsection (5), for “appointing audit authority” substitute “Auditor
General for Wales”.

(3) 15Omit subsection (6).

87 (1) Section 43 (right of entity to appoint auditor to conduct statutory audit) is
amended as follows.

(2) In each of subsections (3), (5) and (7), for “audit authority” substitute
“Auditor General for Wales”.

(3) 20In subsection (8)—

(a) for “an audit authority” substitute “the Auditor General for Wales”,

(b) in paragraph (a), for “audit authority” substitute “Auditor General
for Wales”, and

(c) for paragraph (b) substitute—

“(b) 25the Welsh Ministers.”

88 In section 44(5)(b) (functions of auditor not appointed to conduct statutory
audit: duty to send report to appointing audit authority), for “appointing
audit authority” substitute “Auditor General for Wales”.

89 In section 45(4)(b) (duty of auditor to send public interest report to audit
30authority), for “audit authority” substitute “Auditor General for Wales”.

90 In section 46 (codes of practice) omit subsections (1) to (3).

91 (1) Section 50 (fees for appointment of auditor) is amended as follows.

(2) Omit subsection (1).

(3) In subsection (3), for “Audit Commission or the Wales Audit Office (as the
35case may be)” substitute “Wales Audit Office”.

(4) Omit subsection (4).

(5) In subsection (5)—

(a) omit “(4) or”, and

(b) for “Audit Commission or the Wales Audit Office (as the case may
40be)” substitute “Wales Audit Office”.

(6) In subsection (6), for “Audit Commission or the Wales Audit Office (as the
case may be)” substitute “Wales Audit Office”.

(7) Omit subsections (8) and (9).

(8) In subsection (12)—

(a) for “Audit Commission or the Wales Audit Office (as the case may
be)” in each place it occurs substitute “Wales Audit Office”, and

(b) 5for “(4) or (4A) (as the case may be)” substitute “(4A)”.

92 (1) Section 51 (power of audit authority to require information) is amended as
follows.

(2) In the heading, for “audit authority” substitute “Auditor General for Wales”.

(3) In subsection (1)—

(a) 10for “appointing audit authority” substitute “Auditor General for
Wales”, and

(b) for “it” substitute “the Auditor General for Wales”.

(4) In subsection (2)—

(a) for “an audit authority” substitute “the Auditor General for Wales”,
15and

(b) for “authority” substitute “Auditor General for Wales”.

93 Omit section 52 (subsidiaries of Passenger Transport Executives).

94 (1) Section 53 (regulations) is amended as follows.

(2) In subsection (1), for “36(4)(b) or (5)(b)” substitute “36(5)(b)”.

(3) 20Omit subsection (4).

(4) In subsection (5) omit “made by the Welsh Ministers”.

95 In section 54(1) (interpretation) omit the definitions of “audit authority”,
“Audit Commission” and “qualifying English local authority entity”.

Equality Act 2010 (c. 15)2010 (c. 15)

96 25In Part 1 of Schedule 19 to the Equality Act 2010 (general list of public
authorities to whom public sector equality duty applies) omit the entry for
the Audit Commission for Local Authorities and the National Health Service
in England.

Police Reform and Social Responsibility Act 2011 (c. 13)2011 (c. 13)

97 30The Police Reform and Social Responsibility Act 2011 is amended as follows.

98 In section 18(7) (delegation of functions by police and crime commissioners:
exceptions), after paragraph (f) insert—

“(g) appointing a local auditor under section 7 of the Local Audit
and Accountability Act 2013;

(h) 35deciding whether to enter into a liability limitation
agreement under section 14 of that Act.”

99 In section 19(7) (delegation of functions by Mayor’s Office for Policing and
Crime: exceptions), after paragraph (h) insert—

“(i) appointing a local auditor under section 7 of the Local Audit
40and Accountability Act 2013;

(j) deciding whether to enter into a liability limitation
agreement under section 14 of that Act.”

Repeals and revocations in consequence of this Schedule

100 In consequence of the amendments made by this Schedule, the following
5provisions are repealed or revoked—

(a) paragraphs 52 and 55 of Schedule 1 to the Housing and Regeneration
Act 2008 (Registration of Local Authorities) Order 2010 (SI 2010/
844);

(b) paragraph 102 of Schedule 1 to the Fire and Rescue Services Act 2004;

(c) 10section 158 of the Local Government and Public Involvement in
Health Act 2007;

(d) paragraph 10(6) of Schedule 17 to the Localism Act 2011;

(e) section 155(2) of the Health and Social Care Act 2012;

(f) paragraph 91(2) and (5) of Schedule 4 to the Public Audit (Wales) Act
152013.

Section 44

SCHEDULE 13 NHS trusts and trustees for NHS trusts: transitory and saving provision

Operation of this Schedule

1 (1) This Act has effect in accordance with this Schedule until the coming into
20force of section 179(1) of the Health and Social Care Act 2012, subject to sub-
paragraph (2) and any provision made under paragraph 2.

(2) This Act has effect in accordance with this Schedule in relation to—

(a) any body which continues to be constituted as an NHS trust by
virtue of section 179(3) of that Act after the coming into force of
25subsection (1) of that section, and

(b) any trustees for such a body, appointed under paragraph 10 of
Schedule 4 to the National Health Service Act 2006,

until that body has ceased to be constituted as an NHS trust (by virtue of
paragraph (a), (b) or (c) of section 179(3) of the Health and Social Care Act
302012).

2 (1) The Secretary of State may by order make further transitory or saving
provision for the purposes of this Schedule.

(2) An order under this paragraph may, in particular, make provision about the
audit of—

(a) 35the accounts of an NHS trust prepared in respect of the period which
includes the day on which the trust ceased to be constituted as an
NHS trust;

(b) the accounts of the trustees for an NHS trust prepared in respect of
the period which includes the day on which the trust ceased to be
40constituted as an NHS trust.

(3) An order under this paragraph may—

(a) amend the modifications of this Act made by this Schedule;

(b) further modify this Act.

“Relevant authorities”, “health service bodies” and “accounts”

3 (1) The following are relevant authorities for the purposes of this Act—

(a) an NHS trust all or most of whose hospitals, establishments and
5facilities are situated in England, and

(b) any trustees for such a trust, appointed under paragraph 10 of
Schedule 4 to the National Health Service Act 2006.

(2) Accordingly, Schedule 2 is to be read as if it contained the following
paragraphs—

“24A 10An NHS trust all or most of whose hospitals, establishments and
facilities are situated in England.

24B Any trustees for an NHS trust within paragraph 24A, appointed
under paragraph 10 of Schedule 4 to the National Health Service
Act 2006 (trustees for NHS trusts established under section 25 of
15that Act).”

4 In section 3(9), the definition of “health service body” is to be read as if it
contained the following paragraphs—

“(c) an NHS trust all or most of whose hospitals, establishments
and facilities are situated in England;

(d) 20any trustees for such a trust, appointed under paragraph 10
of Schedule 4 to the National Health Service Act 2006.”

5 (1) Section 4 is to be read as if after subsection (6) there were inserted—

“(7) In relation to an NHS trust, or the trustees for an NHS trust,
“accounts” means the annual accounts prepared under paragraph 3
25of Schedule 15 to the National Health Service Act 2006.”

(2) Accordingly, in section 41(1) the definition of “accounts” is to be read as if
for “(6)” there were substituted “(7)”.

Notice of appointment of local auditor

6 Section 8(4) (publication of notice of appointment of local auditor) is to be
30read as if it contained the following paragraphs—

“(d) in the case of an NHS trust, it publishes the notice in such
manner as it thinks is likely to bring the notice to the attention
of persons to whom the trust provides services for the
purposes of the health service in England;

(e) 35in the case of trustees for an NHS trust, they publish the
notice in such manner as they think is likely to bring the
notice to the attention of persons to whom that NHS trust
provides services for the purposes of the health service in
England.”

40Functions of auditor panel

7 Section 10(10) (publication of advice of auditor panel) is to be read as if it

contained the following paragraphs—

“(d) in the case of an NHS trust, it publishes the advice in such
manner as it thinks is likely to bring the advice to the
attention of persons to whom the trust provides services for
5the purposes of the health service in England;

(e) in the case of trustees for an NHS trust, they publish the
advice in such manner as they think is likely to bring the
advice to the attention of persons to whom that NHS trust
provides services for the purposes of the health service in
10England.”

Failure to appoint local auditor

8 (1) Section 12 does not apply in relation to an NHS trust mentioned in
paragraph 3(1)(a), or the trustees of such a trust as mentioned in paragraph
3(1)(b).

(2) 15Paragraph 9 applies in relation to such a body.

9 (1) If an NHS trust fails, or the trustees for an NHS trust fail, to appoint an
auditor in accordance with Part 2, the trust or (as the case may be) the
trustees must immediately inform the National Health Service Trust
Development Authority (“the Authority”) of that fact.

(2) 20If it appears to the Authority that an NHS trust has, or the trustees for an
NHS trust have, failed to appoint an auditor in accordance with Part 2, the
Authority must inform the Secretary of State of that fact by the end of 25
March in the financial year preceding the financial year to which the
accounts to be audited relate.

(3) 25If the Secretary of State has been informed by the Authority under sub-
paragraph (2), the Secretary of State may—

(a) take either of the steps in sub-paragraph (4), or

(b) direct the Authority to take whichever of the steps in sub-paragraph
(4) the Authority considers appropriate.

(4) 30Those steps are—

(a) to direct the trust or trustees to appoint an auditor named in the
direction given under this paragraph, or

(b) to appoint an auditor on behalf of the trust or trustees.

(5) An appointment under sub-paragraph (4)(b) takes effect—

(a) 35as if it had been made by the trust or trustees, and

(b) on such terms as the Secretary of State or (as the case may be) the
Authority may direct.

(6) The Secretary of State or the Authority must—

(a) inform the trust or trustees of the intention to give a direction or
40appoint an auditor under sub-paragraph (4) not less than 28 days
before the direction is given or the appointment made, and

(b) consider any representations made by the trust or trustees regarding
the proposed direction or appointment.

(7) But the Secretary of State or the Authority may give a direction or make an
45appointment under sub-paragraph (4) without having complied with sub-
paragraph (6) if the Secretary of State or the Authority thinks it is likely that