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Session 2005 - 06
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Standing Committee Debates

Draft Special Health Authorities (Audit) Order 2006

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Sixth Standing Committee
on Delegated Legislation

The Committee consisted of the following Members:


Mr. Eric Martlew

†Allen, Mr. Graham (Nottingham, North) (Lab)
†Burt, Lorely (Solihull) (LD)
†Healey, John (Financial Secretary to the Treasury)
Heathcoat-Amory, Mr. David (Wells) (Con)
†Hoban, Mr. Mark (Fareham) (Con)
†Mahmood, Mr. Khalid (Birmingham, Perry Barr) (Lab)
†Mitchell, Mr. Austin (Great Grimsby) (Lab)
†Moffat, Anne (East Lothian) (Lab)
†Mullin, Mr. Chris (Sunderland, South) (Lab)
†Pelling, Mr. Andrew (Croydon, Central) (Con)
Pritchard, Mark (The Wrekin) (Con)
†Selous, Andrew (South-West Bedfordshire) (Con)
†Tami, Mark (Alyn and Deeside) (Lab)
†Taylor, Ms Dari (Stockton, South) (Lab)
†Watson, Mr. Tom (Lord Commissioner of Her Majesty’s Treasury)
Williams, Stephen (Bristol, West) (LD)
†Wood, Mike (Batley and Spen) (Lab)
Geoffrey Farrar, Committee Clerk
† attended the Committee

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Tuesday 14 March 2006

[Mr. Eric Martlew in the Chair]

Draft Special Health Authorities (Audit) Order 2006

4.30 pm

The Financial Secretary to the Treasury (John Healey): I beg to move,

    That the Committee has considered the draft Special Health Authorities (Audit) Order 2006.

I welcome you to the Chair, Mr. Martlew. The last time that I served under your chairmanship was in front of 50 business men and their accountants, who were grilling me about tax. You were firm and fair then, and I am sure that you will be firm and fair this afternoon.

The order is being made under the Government Resources and Accounts Act 2000 and is intended to make the Comptroller and Auditor General the statutory auditor for four new special health authorities. It is straightforward, and I hope that the Committee can deal with it straightforwardly. In conjunction with an accompanying negative resolution order, this order will ease the audit burden on those authorities and on the Department of Health, while maintaining and, in some ways, improving parliamentary accountability.

I am grateful for the assistance that we received from the Department of Health and the National Audit Office in preparing the provisions. This is the third time that we have taken such orders through Parliament since 2003, and the Committee may be pleased to hear that it is likely to be the last time. That is because the Health Bill going through Parliament amends the National Health Service Act 1977 so that, in future, all special health authorities will be statutorily audited by the Comptroller and Auditor General. However, the timetable for that Bill means that we need this order to cover the audit of these four special health authorities for the current financial year. Without the order, they would be subject to the administratively unnecessary dual regimes and costs under the 1977 Act.

The four newly established special health authorities covered by the order are the Health and Social Care Information Centre, NHS Blood and Transplant, the NHS Business Services Authority and the NHS Institute for Innovation and Improvement. Those authorities were set up during the current financial year following the Department of Health’s review of its arm’s length bodies. Hon. Members will remember that the conclusions were announced and published in July 2004.

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Ms Dari Taylor (Stockton, South) (Lab): I would appreciate hearing my hon. Friend the Minister name the various bodies in Welsh.

John Healey: I will certainly name two of the bodies, but they do not cover Wales. The NHS Institute for Innovation and Improvement is an England-only body, as is the Health and Social Care Information Centre. My hon. Friend will forgive me if I turn to my Parliamentary Private Secretary, my hon. Friend the Member for Alyn and Deeside (Mark Tami), who might be able to help me, but my hon. Friend the Member for Stockton, South (Ms Taylor), of all the members of the Committee, is probably best placed to give the names of the other two bodies in Welsh. I sought advice about that, but officials were unable to help me. My hon. Friend points to a serious aspect of the legislation, which is that it does not cover only bodies that may be England-only elements of the health service. The two bodies to which she refers cover activities in Wales as well.

The Government are giving the Comptroller and Auditor General statutory authority to audit the special health authorities to remove the requirements for two sets of accounts to be prepared for each—one by the authority and the other by the DOH—and for each authority to be, in effect, audited twice, once by auditors appointed by the Audit Commission and again by the CAG. The order will put these special health authorities on a par with all the others. The CAG, in place of the Audit Commission, will be the statutory auditor for special health authorities and thus the dual audit burden will be avoided. The companion negative resolution order will mean that the DOH need not prepare summarised accounts for the same four new special health authorities.

We propose that the audit arrangements for the new special health authorities take effect from the beginning of this financial year, and that the individual special health authorities’ accounts will be laid directly before Parliament. The proposals make a modest change to the audit burden on the special health authorities and continue the Government’s commitment to improving scrutiny and parliamentary accountability. On that basis, I commend the order to the Committee.

4.35 pm

Mr. Mark Hoban (Fareham) (Con): What a pleasure it is to serve under your chairmanship, Mr. Martlew, albeit, I suspect, for a very brief sitting.

I must say that I had a flutter of excitement when I first looked at this statutory instrument; I thought, “Special health authorities audit. Is this about the KPMG turnaround teams that the Department of Health has sent into our health authorities?” Indeed, the explanatory notes and the regulatory impact assessment on the Treasury website described such bodies as “SHAs”, which sounded remarkably likely “strategic health authorities”, but of course, in the explanatory memorandum before us today, those initials have now become “SpHA”. How can anyone on the Opposition Benches object to a measure that
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will save £1,800? Given the size of NHS deficits these days, any saving is welcome. I therefore welcome the statutory instrument.

4.36 pm

Lorely Burt (Solihull) (LD): May I, too, welcome you to the Chair, Mr. Martlew, for the brief time that I suspect we will be gathered here this afternoon?

I looked up last year’s equivalent sitting—the Minister was good enough to mention that this is the third time that we have had a similar situation—and I counted the number of minutes that it took. It came to 13 minutes. I do not know if we will improve on that today.

May I make two small points, on which I would be grateful to hear the Minister comment? My first point is regarding the creation of the four additional arm’s length bodies. As I understand it, the review was intended to reduce the number of such bodies—it has, in fact, reduced from 38 to 20—so it is unfortunate that it was seen as necessary to create four additional bodies, thus necessitating our presence this afternoon.

Secondly, we are greatly in favour of streamlined audit services and the prevention of waste and duplication so we will of course be supporting the order. However, may I speculate as to the cost of staff time, paper, and so on, not to mention hon. Members’ time this afternoon in order to save £1,800? Having said that, and without further ado, I will let the Minister respond.

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4.38 pm

John Healey: May I thank the hon. Members for Fareham (Mr. Hoban) and for Solihull (Lorely Burt) for their support? I welcome the hon. Member for Solihull to her position for the first time on the Liberal Front-Bench Treasury team.

I will make a note of the hon. Lady’s last point and when the Finance Bill goes to Standing Committee and there are serious arguments about whether resolutions that flow from such legislation should be treated by affirmative or negative procedure, I will take account of her exhortations to avoid, where possible, this sort of process. In my view, the affirmative resolution procedure has an important place in the scrutiny of Government secondary legislation and is an important part of the role of Parliament. In relation to the four bodies, whose existence she slightly bemoans, I must say that they are a necessary and useful part of the NHS; otherwise my hon. Friends in the Department of Health would not have set them up this year.

I say to the hon. Member for Fareham that I regret that the order is a little less exciting than he first imagined that it might be. It has indeed, as he said, nothing at all to do with NHS deficits.

Question put and agreed to.


    That the Committee has considered the draft Special Health Authorities (Audit) Order 2006.

The Committee rose at twenty-one minutes to Five o’clock.


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