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Lembit Öpik (Montgomeryshire) (LD): While welcoming the change and the fact that the Government have listened to people's concerns, I should be grateful if the Minister would outline the time scale. Lord Evans said in another place that he expected change to be completed

"as soon as possible and certainly before the end of this year."—[Official Report, House of Lords, 11 May 2004; Vol. 661, c. 168.]

Will the Minister assure us that the matter will be entirely resolved by the end of the year?

Mr. Touhig: I am grateful to the hon. Gentleman, and was about to come on to that point. It is the Government's intention to make an order before the end of the year to amend section 49. We have to amend clause 54 separately, and that amendment will be made by the end of the year to bring it into line with section 49.

Mr. Liddell-Grainger: Clause 54(2)(h) talks about the disclosure of information

"for the purposes of any criminal proceedings which have been or may be initiated".

If such information is disclosed retrospectively, who would be responsible? Would it be the Audit Commission in Wales or the Audit Commission? If there is a UK-wide investigation before the Bill is enacted which body would be responsible?

Mr. Touhig: I believe that it would be the Audit Commission, although it may be the Auditor General for Wales. I will clarify the position for the hon. Gentleman before the winding-up speeches
 
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Clause 22 deals with immediate and other reports in the public interest. Subsection (1) states:

"In auditing accounts of a body under this Chapter, an auditor must consider whether, in the public interest, he should make a report on any matter which comes to his notice in the course of the audit, in order for it to be . . . considered by the body, or . . . brought to the attention of the public."

Subsection (3) makes the position clear. It states:

"If the auditor considers that the public interest requires the matter to be made the subject of an immediate report, he must make the report immediately."

I hope that that assuages the concerns of right hon. and hon. Members. The Government are determined that there should be no unreasonable impediments to the proper disclosure of information in the Bill.

Mr. Liddell-Grainger: Are subsections (1) and (3) of clause 22 covered by the Human Rights Act 1998? If one asked for retrospective information about an audit, disclosure of such information in the public interest could breach someone's human rights.

Mr. Touhig: I do not believe that that would be the case but, again, I will provide clarification later for the hon. Gentleman on that important point. We are establishing a series of measures so that there is a presumption in favour of disclosure, and I believe that Members on both sides of the House will welcome that.

The role of the public expenditure watchdog is vital in maintaining and improving accountability and safeguarding the public interest. Almost £12 billion of taxpayers' money is spent on functions devolved to the National Assembly, which ensures that it is spent correctly and with due regard to value for money in public services. Although financial audit remains a key component of an auditor's work, the role of auditing has developed over recent years. It increasingly includes advice and assessment of clients' corporate governance arrangements, including the assessment of risk management. Advice on increasingly sophisticated financial management systems is another important aspect of auditing. Inside an organisation, people would say that the watchdog is a man's best friend. A value-for-money audit provides reassurance to the public, and is strategically important for developing policy and improving performance.

The mechanisms for public expenditure and accountability are becoming more complex. The Assembly is working with the Government to develop a distinctive partnership approach, which involves a range of public, voluntary and private sector bodies in the development of policy and the delivery of objectives. Good examples include the communities first initiative and the Wales waste strategy, but all the initiatives involve close collaboration and co-operation across sectors. The value-for-money functions of the Auditor General for Wales are retrospective, and cover the way in which a body has used its resources in the past. The Bill will enable him to undertake forward-looking value-for-money studies across the sectors, covering the full range of public bodies in Wales. Those studies can inform policy decisions and will provide reassurance to taxpayers that their money is being well spent.

In conclusion, the Bill offers a single framework for public audit in Wales, with expertise vested in a single organisation, which suits both the way in which the
 
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Government work in Wales and the interests of the people of Wales, who pay for the services that they receive from the public sector. It will concentrate expertise and help to develop and spread innovation and best audit practice across the public sector in Wales. It will also enable the Wales Audit Office to play a full part in developing wider audit standards in co-operation with other bodies throughout the United Kingdom. It provides the basis for a world-class audit body of which Wales can be proud, and gives the Auditor General the tools that he needs to meet the challenges of rapid change and an increasingly complex public finance framework. I commend the Bill to the House.

1.46 pm

Mr. Bill Wiggin (Leominster) (Con): I am grateful to the Minister for his kind words, and to the hon. Member for Clwyd, South (Mr. Jones), the Chairman of the Welsh Affairs Committee, under whom I served when the Bill was scrutinised. I pay tribute to the Committee's hard work, and particularly to him.

Regrettably, the programme motion proposes a deadline of 1 July for Committee proceedings. Such a timetable will create difficulties, given the complexities of clause 54 that the Minister has just told us about. The Bill will consolidate audit arrangements for public bodies in Wales, replacing the Auditor General in Wales and the Audit Commission in Wales with a national audit office that will ensure best value from the National Assembly, health bodies, NHS trusts and local government bodies. In principle, we welcome the consolidation of a single audit regime in Wales, which makes good sense. The new office has great potential to improve the quality of public services and government in Wales, and ensure the best-value use of resources. We owe a debt of gratitude to Baroness Noakes and Lord Roberts of Conwy, who greatly improved the Bill in the other place. Most of the 23 Government amendments made in the House of Lords were introduced after discussion of Conservative amendments, so I am grateful to my colleagues in another place.

There are, however, still inconsistencies in the Bill about which we are concerned. The Government have insisted on making the Bill consistent with audit arrangements in England simply by regurgitating arrangements that currently exist in England and Wales. Consequently, a great opportunity for improving the audit regime in Wales has been missed. Clauses 5 and 11 are consistent with provisions in England, but create arrangements that are inconsistent in Wales.

We are concerned that the criminal sanctions in clause 5 will affect registered social landlords' rights of access, as the clause makes it a criminal offence for registered social landlords to hinder the work of the Auditor General for Wales. However, criminal sanctions are omitted from clause 11, which deals with the Auditor General's right of access to general information. We will therefore make the Bill consistent by tabling amendments that either remove the criminal sanctions from clause 5 or create criminal penalties for a breach of access rights in clause 11. Clauses 18, 53 and 5 do not deal with criminal sanctions, but are inconsistent with one another, so we will table amendments to deal with that.

In an attempt to justify those inconsistencies, the Minister said that the Bill is consistent with audit provisions in England. The Government have ignored
 
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the chance to create a coherent, logical audit regime in Wales, and one such inconsistency is to be found in clause 14. The Auditor General cannot appoint himself as the auditor to local authorities, yet he can audit NHS bodies himself. As Baroness Noakes pointed out, why would such an appointment cause a conflict of interest in local government bodies but not health trusts? It is puzzling that there should be constraints on the Auditor General in the local government sphere while he has freedom to act directly in the health field.

The most contentious issue is clause 54, which restricts the disclosure of information held by the Auditor General in respect of local government unless consent is given for its disclosure by the body or the person to whom the information relates.

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