Local Audit and Accountability Bill (HL Bill 42)

(c) that period has expired.

(3) An advisory notice takes effect on the day on which a copy of the notice is
served on the person to whom it is addressed, and ceases to have effect—

(a) if a statement of reasons is not served in accordance with paragraph
52(3), at the end of the period specified in paragraph 2(4), or

(b) when it is withdrawn under paragraph 2(6).

(4) Any costs reasonably incurred by a local auditor in connection with the issue
of an advisory notice are recoverable by the auditor from the relevant
authority concerned.

(5) 10In this paragraph “the relevant authority concerned”, in relation to an
advisory notice, means the relevant authority to which, or to any officer of
which, the notice is addressed.

Further provisions about advisory notices

4 (1) Sub-paragraph (2) applies if—

(a) 15before an advisory notice is served, a relevant authority enters into a
contract to dispose of or acquire an interest in land, and

(b) before the disposal or acquisition is completed, an advisory notice
takes effect as a result of which it is unlawful for the authority to
complete the disposal or acquisition.

(2) 20The existence of the advisory notice does not affect any remedy in damages
which may be available to any person by reason of the relevant authority’s
failure to complete the contract.

(3) No action lies against a local auditor in respect of loss or damage alleged to
have been caused by reason of the issue of an advisory notice which was
25issued in good faith.

Section 32

SCHEDULE 9 Data matching

Power to conduct data matching exercises

1 (1) A relevant minister may conduct data matching exercises or arrange for
30them to be conducted on the minister’s behalf.

(2) “Relevant minister” means the Secretary of State or the Minister for the
Cabinet Office.

(3) A data matching exercise is an exercise involving the comparison of sets of
data to determine how far they match (including the identification of any
35patterns and trends).

(4) The power in sub-paragraph (1) is exercisable for the purpose of assisting in
the prevention and detection of fraud.

(5) A data matching exercise may not be used to identify patterns and trends in
an individual’s characteristics or behaviour which suggest nothing more
40than the individual’s potential to commit fraud in the future.

(6) In this Schedule, any reference to a data matching exercise is to an exercise
conducted or arranged to be conducted under this paragraph.

Mandatory provision of data

2 (1) A relevant minister may require a person within sub-paragraph (2) to
5provide the minister or a person acting on the minister’s behalf with such
data (and in such form) as the minister or that person may reasonably
require for the purpose of conducting data matching exercises.

(2) The persons within this sub-paragraph are—

(a) a relevant authority,

(b) 10a best value authority which is not a relevant authority, and

(c) an NHS foundation trust.

(3) “Best value authority” has the meaning given by section 1 of the Local
Government Act 1999.

Voluntary provision of data

3 (1) 15If a relevant minister thinks it appropriate to conduct a data matching
exercise using data held by or on behalf of a body or person in England, the
data may be disclosed to the minister or a person acting on the minister’s
behalf.

(2) Sub-paragraph (1) applies to the disclosure of data by a relevant authority, a
20best value authority or an NHS foundation trust otherwise than in response
to a requirement under paragraph 2 as it applies to other disclosures of data.

(3) Sub-paragraph (1) does not authorise—

(a) a disclosure which contravenes the Data Protection Act 1998, or

(b) a disclosure prohibited by Part 1 of the Regulation of Investigatory
25Powers Act 2000.

(4) Data may not be disclosed under sub-paragraph (1) if the data comprise or
include patient data.

(5) “Patient data” means data relating to an individual which are held for
medical purposes (within the meaning of section 251 of the National Health
30Service Act 2006) and from which the individual can be identified.

(6) A disclosure under sub-paragraph (1) does not breach—

(a) any obligation of confidence owed by a person making the
disclosure, or

(b) any other restriction on the disclosure of information (however
35imposed).

(7) This paragraph does not limit the circumstances in which data may be
disclosed apart from this paragraph.

(8) Data matching exercises may include data provided by a body or person
outside England.

40Disclosure of results of data matching etc

4 (1) This paragraph applies to the following information—

(a) information relating to a particular body or person obtained by or on
behalf of a relevant minister for the purpose of conducting a data
matching exercise, and

(b) the results of any such exercise.

(2) 5Information to which this paragraph applies may be disclosed by or on
behalf of the minister if the disclosure—

(a) is for or in connection with a purpose for which the data matching
exercise is conducted,

(b) is to a local auditor and is made for or in connection with the
10auditor’s functions,

(c) is in pursuance of a duty imposed by or under an enactment, or

(d) is within sub-paragraph (3).

(3) A disclosure is within this sub-paragraph if it is—

(a) to a relevant audit authority or a related party, and

(b) 15for or in connection with a function of the relevant audit authority
corresponding or similar to—

(i) the functions of a local auditor, or

(ii) the functions of a relevant minister under this Schedule.

(4) “Relevant audit authority” means—

(a) 20the Auditor General for Wales;

(b) the Auditor General for Scotland;

(c) the Accounts Commission for Scotland;

(d) Audit Scotland;

(e) the Comptroller and Auditor General for Northern Ireland;

(f) 25a person designated as a local government auditor under Article 4 of
the Local Government (Northern Ireland) Order 2005 (S.I. 2005/1968S.I. 2005/1968
(N.I.18)).

(5) The related parties in relation to a relevant audit authority are—

(a) a body or person acting on the authority’s behalf,

(b) 30a body whose accounts are required to be audited by the authority or
by a person appointed by the authority, and

(c) a person appointed by the authority to audit those accounts.

(6) If the data used for a data matching exercise include patient data—

(a) sub-paragraph (2)(a) applies only so far as the purpose for which the
35disclosure is made relates to a relevant NHS body;

(b) sub-paragraph (2)(b) or (d) applies only so far as the function for or
in connection with which the disclosure is made relates to a relevant
NHS body.

(7) Information disclosed under sub-paragraph (2) may not be further disclosed
40except—

(a) in the case of information disclosed under sub-paragraph (2)(a), for
or in connection with the purpose for which it was disclosed under
that sub-paragraph,

(b) in the case of information disclosed under sub-paragraph (2)(b) or
45under sub-paragraphs (2)(d) and (3), for or in connection with the
function for which it was disclosed under that sub-paragraph or
those sub-paragraphs,

(c) for the investigation or prosecution of an offence (so far as the
disclosure does not fall within paragraph (a) or (b)), or

(d) in pursuance of a duty imposed by or under an enactment.

(8) A person who discloses information to which this paragraph applies, except
5so far as that disclosure is authorised by sub-paragraph (2) or (7), is guilty of
an offence and liable on summary conviction to a fine not exceeding level 5
on the standard scale.

(9) If section 85(1) of the Legal Aid, Sentencing and Punishment of Offenders
Act 2012 comes into force on or before the day on which this Act is passed—

(a) 10section 85 of that Act (removal of limit on certain fines on conviction
by magistrates’ court) applies in relation to the offence in sub-
paragraph (8) as if it were a relevant offence (as defined in section
85(3) of that Act), and

(b) regulations described in section 85(11) of that Act may amend or
15otherwise modify sub-paragraph (8).

(10) Schedule 11 (restriction on disclosure of information obtained under this
Act) does not apply to information to which this paragraph applies.

(11) In sub-paragraph (6)—

• “patient data” has the same meaning as in paragraph 3(5);

• 20“relevant NHS body” means—

  (a)

  a health service body;

  (b)

  an NHS foundation trust;

  (c)

  the NHS Commissioning Board;

  (d)

  a Welsh NHS body as defined in section 60 of the Public
  25Audit (Wales) Act 2004;

  (e)

  an NHS body as defined in section 22(1) of the Community
  Care and Health (Scotland) Act 2002;

  (f)

  a body to which Article 90 of the Health and Personal Social
  Services (Northern Ireland) Order 1972 (SI 1972/1265 (NI 14)SI 1972/1265 (NI 14))
  30applies.

Publication

5 (1) Nothing in paragraph 4 prevents a relevant minister from publishing a
report on a data matching exercise (including on the results of the exercise).

(2) But the report may not include information relating to a particular body or
35person if—

(a) the body or person is the subject of any data included in the data
matching exercise,

(b) the body or person can be identified from the information, and

(c) the information is not otherwise in the public domain.

(3) 40A report published under this paragraph may be published in such manner
as the relevant minister considers appropriate for bringing it to the attention
of those members of the public who may be interested.

Fees for data matching

6 (1) A relevant minister must prescribe a scale or scales of fees in respect of data
45matching exercises.

(2) A person within paragraph 2(2) who is required under that paragraph to
provide data for a data matching exercise must pay to the relevant minister
by whom or on whose behalf the exercise is conducted the fee applicable to
that exercise in accordance with the appropriate scale.

(3) 5But if it appears to the relevant minister that the work involved in the
exercise was substantially more or less than that envisaged by the
appropriate scale, the minister may charge the person a fee which is larger
or smaller than that referred to in sub-paragraph (2).

(4) Before prescribing a scale of fees under this paragraph, a relevant minister
10must consult—

(a) the persons within paragraph 2(2),

(b) such representatives of persons within paragraph 2(2) as the minister
thinks appropriate, and

(c) such other bodies or persons as the minister thinks appropriate.

(5) 15In addition to the power under sub-paragraph (2), a relevant minister may
charge a fee to any body or person providing data for or receiving the results
of a data matching exercise.

(6) A fee under sub-paragraph (5) is payable in accordance with terms agreed
between the relevant minister and that body or person.

20Code of data matching practice

7 (1) A relevant minister must prepare, and keep under review, a code of practice
with respect to data matching exercises.

(2) Regard must be had to the code in conducting and participating in any data
matching exercise.

(3) 25Before preparing or altering the code, the relevant minister must consult—

(a) the persons within paragraph 2(2),

(b) such representatives of persons within paragraph 2(2) as the minister
thinks appropriate,

(c) the Information Commissioner, and

(d) 30such other bodies or persons as the minister thinks appropriate.

(4) The relevant minister must—

(a) lay a copy of the code, and of any alterations made to it, before
Parliament, and

(b) from time to time publish the code as for the time being in force.

35Powers to amend this Schedule

8 (1) A relevant minister may by regulations amend this Schedule—

(a) to add a purpose mentioned in sub-paragraph (2) to the purposes for
which data matching exercises may be conducted (see paragraph
1(4));

(b) 40to modify the application of this Schedule in relation to a purpose so
added.

(2) The purposes which may be added are—

(a) to assist in the prevention and detection of crime (other than fraud),

(b) to assist in the apprehension and prosecution of offenders, and

(c) to assist in the recovery of debt owing to public bodies.

(3) Before making regulations under sub-paragraph (1), a relevant minister
must consult—

(a) the persons within paragraph 2(2),

(b) 5such representatives of persons within paragraph 2(2) as the minister
thinks appropriate, and

(c) such other bodies or persons as the minister thinks appropriate.

(4) A relevant minister may by regulations amend this Schedule—

(a) to add a public body to the list in paragraph 2(2);

(b) 10to modify the application of this Schedule in relation to a body so
added;

(c) to remove a person from that list.

(5) Before making regulations under sub-paragraph (4), a relevant minister
must consult—

(a) 15the body or person who is to be the subject of the regulations,

(b) such representatives of persons within paragraph 2(2) as the minister
thinks appropriate, and

(c) such other bodies or persons as the minister thinks appropriate.

(6) In this paragraph, “public body” means a body or person whose functions—

(a) 20are functions of a public nature, or

(b) include functions of that nature,

but, in the latter case, the body or person is a public body only to the extent
of those functions.

Section 33

SCHEDULE 10 25Best value inspections

1 The Local Government Act 1999 is amended as follows.

2 For section 10 substitute—

“10 Inspections

(1) The Secretary of State may appoint a person to carry out an
30inspection of a specified best value authority’s compliance with the
requirements of this Part in relation to specified functions.

(2) The Secretary of State may appoint assistant inspectors for the
purposes of the inspection.

(3) The appointment of an assistant inspector must be made on the
35recommendation of the inspector, unless the Secretary of State thinks
that the urgency of the inspection makes it necessary to dispense
with this requirement.

(4) In carrying out an inspection, the inspector and any assistant
inspector must—

(a) 40have regard to any guidance issued by the Secretary of State
generally in relation to inspections, and

(b) comply with any directions issued by the Secretary of State in
relation to that inspection.”

3 In section 11(7) (powers and duties: definition of “inspector”), for
paragraphs (a) and (b) substitute “an inspector or assistant inspector
5appointed under section 10(1) or (2).”

4 For section 12 substitute—

“12 Fees

An authority inspected under section 10 must pay the reasonable
fees of the inspector for carrying out the inspection.”

5 10Omit section 12A (fees for inspections by Auditor General for Wales).

6 (1) Section 13 (reports) is amended as follows.

(2) In subsection (1)—

(a) for “the Audit Commission” substitute “an inspector”, and

(b) for “it” substitute “the inspector”.

(3) 15In subsection (2)(a), for “Commission” substitute “inspector”.

(4) In subsection (3)—

(a) for “Commission” substitute “inspector”, and

(b) in paragraph (a), after “to the authority concerned” insert “and to the
Secretary of State”.

(5) 20After subsection (3) insert—

“(3A) The Secretary of State may publish a report and any information in
respect of a report.”

(6) In subsection (4)—

(a) for “Commission” substitute “inspector”, and

(b) 25omit paragraph (b) and the word “and” preceding it.

(7) In subsection (4A)—

(a) for “Commission” substitute “inspector”, and

(b) for “it” substitute “the inspector”.

7 Omit section 13A (reports of inspections by Auditor General for Wales).

8 30In section 15 (Secretary of State’s powers)—

(a) omit subsection (10), and

(b) in subsections (11) and (12) omit “or (10)”.

9 Omit section 22(1) (Audit Commission).

10 Omit section 25(2)(a) and (aa) (coordination of inspections: Audit
35Commission and Auditor General for Wales).

11 Omit section 26(3) and (3A) (consultation with Audit Commission and
Auditor General for Wales before issuing guidance).

12 In section 33 (grants to Audit Commission and Auditor General for Wales)—

(a) omit subsection (2) and (3)(a), and

(b) 40in subsection (3)(b) omit “under this Act or”.

13 On the coming into force of the repeal (by the Welfare Reform Act 2012) of
section 139D of the Social Security Administration Act 1992 omit—

(a) section 13(4A) of the Local Government Act 1999, and

(b) the amendments made to it by paragraph 6(7) of this Schedule.

Section 35

5SCHEDULE 11 Disclosure of information

Information to which Schedule applies

1 (1) This Schedule applies to information relating to a particular body or
person—

(a) 10that is obtained by a local auditor, or a person acting on behalf of a
local auditor, under or by virtue of this Act or in the course of an
audit under this Act, or

(b) that is obtained by an inspector or an assistant inspector, or a person
acting on behalf of an inspector or an assistant inspector, under Part
151 of the Local Government Act 1999 (inspection of best value
authorities) or in the course of an inspection under that Part.

(2) This Schedule also applies to information relating to a particular body or
person that is obtained by an authority within sub-paragraph (3) in
connection with the exercise of the authority’s functions under or by virtue
20of this Act.

(3) Those authorities are—

(a) a recognised supervisory body,

(b) a recognised qualifying body,

(c) a body performing functions for the purposes of arrangements
25within paragraph 23(1) (independent monitoring of certain audits)
or 24(1) (independent investigation of public interest cases) of
Schedule 10 to the Companies Act 2006 as it has effect by virtue of
Schedule 5,

(d) the Secretary of State, and

(e) 30a body designated by the Secretary of State under section 1252 of the
Companies Act 2006 (delegation of the Secretary of State’s functions)
as it has effect by virtue of Schedule 5.

General bar on disclosure and exceptions

2 (1) Information to which this Schedule applies may not be disclosed except—

(a) 35with the consent of the body or person to whom the information
relates,

(b) for the purposes of any functions of a person under or by virtue of
this Act or Part 1 of the Local Government Act 1999,

(c) for the purposes of any function of a person under or by virtue of
40Part 42 of the Companies Act 2006,

(d) in the case of information relating to a health service body, for the
purposes of—

(i) the functions of the Secretary of State, the National Health
Service Commissioning Board or the Comptroller and
Auditor General under the National Health Service Act 2006,
or

(ii) 5the functions of the Welsh Ministers under Chapter 4 of Part
2 of the Health and Social Care (Community Health and
Standards) Act 2003,

(e) to Her Majesty’s Chief Inspector of Education, Children’s Services
and Skills for the purposes of the Chief Inspector’s functions under
10Chapter 4 of Part 8 of the Education and Inspections Act 2006,

(f) for the purposes of the functions of the Regulator of Social Housing
under Part 2 of the Housing and Regeneration Act 2008,

(g) for the purposes of the functions of the Secretary of State relating to
social security,

(h) 15for the purposes of any function of the Auditor General for Wales
under the Public Audit (Wales) Act 2004,

(i) to the Mayor of London, where the information relates to the Greater
London Authority or a functional body,

(j) for the purposes of the functions of the Public Services Ombudsman
20for Wales under Part 3 of the Local Government Act 2000, or

(k) for the purposes of the functions of a monitoring officer under that
Part or regulations made under that Part.

(2) This paragraph does not prohibit the disclosure of information if the
information is or has been available to the public from any other source.

(3) 25This paragraph does not limit the circumstances in which information may
be disclosed apart from this Schedule (and see in particular section 17 of the
Anti-terrorism, Crime and Security Act 2001 (extension of disclosure powers
under other Acts: criminal proceedings and investigations)).

Further exceptions

3 (1) 30A person who is, or acts on behalf of a person who is, a public authority for
the purposes of the Freedom of Information Act 2000, may also disclose
information to which this Schedule applies unless the disclosure would, or
would be likely to, prejudice the effective performance of a function
imposed or conferred on the person by or under an enactment.

(2) 35A local auditor, or a person acting on the auditor’s behalf, may also disclose
information to which this Schedule applies except where the disclosure
would, or would be likely to, prejudice the effective performance of a
function imposed or conferred on the auditor by or under an enactment.

Disclosure with consent of local auditor

4 (1) 40A person who does not fall within paragraph 3 may also disclose
information to which this Schedule applies in accordance with consent given
by a local auditor under this paragraph.

(2) A person requesting consent (“the applicant”) must make a request for
consent which—

(a) 45is in writing,

(b) states the name of the applicant and an address for correspondence,

(c) describes the information in relation to which consent is requested,
and

(d) identifies the person to whom the information will be disclosed.

(3) Consent must be given except where the disclosure would, or would be
5likely to, prejudice the effective performance of a function imposed or
conferred on a local auditor by or under an enactment.

(4) Consent may be given or refused orally or in writing; but where it is given
or refused orally the consent or refusal must be confirmed in writing.

(5) A refusal (or, where the refusal is given orally, the confirmation of the
10refusal) must contain the reasons for the refusal.

(6) A local auditor to whom a request for consent is made must give or refuse
consent not later than the twentieth working day following the day on which
the request is received.

(7) “Working day” means any day other than a Saturday, a Sunday, Christmas
15Day, Good Friday or a day which is a bank holiday under the Banking and
Financial Dealings Act 1971 in any part of the United Kingdom.

Offence of wrongful disclosure

5 (1) A person who discloses information in breach of this Schedule is guilty of an
offence and liable on summary conviction to a fine not exceeding level 5 on
20the standard scale.

(2) If section 85(1) of the Legal Aid, Sentencing and Punishment of Offenders
Act 2012 comes into force on or before the day on which this Act is passed—

(a) section 85 of that Act (removal of limit on certain fines on conviction
by magistrates’ court) applies in relation to the offence in sub-
25paragraph (1) as if it were a relevant offence (as defined in section
85(3) of that Act), and

(b) regulations described in section 85(11) of that Act may amend or
otherwise modify sub-paragraph (1).

Meaning of “enactment”

6 30In this Schedule “enactment” includes—

(a) an enactment contained in, or in an instrument made under, a
Measure or Act of the National Assembly for Wales,

(b) an enactment contained in, or in an instrument made under, an Act
of the Scottish Parliament, and

(c) 35an enactment contained in, or in an instrument made under
Northern Ireland legislation.