Local Democracy, Economic Development and Construction Bill [HL]

House of Commons

Session 2008 - 09
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Local Democracy, Economic Development and Construction Bill [HL]

Local Democracy, Economic Development and Construction Bill [HL]
Part 2 — Local authorities: governance and audit
Chapter 2 — Audit of entities connected with local authorities
34

44
Access to information
(1)
A person appointed under this Chapter in relation to an entity (in this section
referred to as an “auditor”) has a right of access at all reasonable times to every
document relating to the entity which appears to the auditor necessary for the
purpose of the exercise of their functions under section 42.
5
(2)
The right conferred by subsection (1) includes power to inspect, copy or take
away the document.
(3)
An auditor may—
(a)
require a person holding or accountable for any document referred to
in subsection (1) to give to the auditor such information or explanation
10
as the auditor thinks necessary for the purpose of the exercise of the
auditor’s functions under section 42, and
(b)
if the auditor thinks it necessary, require the person to attend before the
auditor in person to give the information or explanation or to produce
the document.
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(4)
Without prejudice to subsection (3), an auditor may—
(a)
require any officer or member of the entity to give to the auditor such
information or explanation as the auditor thinks necessary for the
purpose of the exercise of the auditor’s functions under section 42, and
(b)
if the auditor thinks it necessary, require the officer or member to
20
attend before the auditor in person to give the information or
explanation.
(5)
In relation to any document kept in electronic form, the power in subsection
(3)(b) to require a person to produce a document includes power to require it
to be produced in a form in which it is legible and can be taken away.
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(6)
In connection with inspecting such a document, an auditor—
(a)
may obtain access to, and inspect and check the operation of, any
computer and associated apparatus or material which the auditor
considers is or has been used in connection with the document;
(b)
may require a person within subsection (7) to afford the auditor such
30
reasonable assistance as the auditor may require for that purpose.
(7)
The following persons are within this subsection—
(a)
a person by whom or on whose behalf the computer is or has been used;
(b)
a person having charge of, or otherwise concerned with the operation
of, the computer, apparatus or material.
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(8)
Without prejudice to subsections (1) to (7), the entity must provide the auditor
with every facility and all information which the auditor may reasonably
require for the purposes of the exercise of the auditor’s functions under section
42.
(9)
A person who without reasonable excuse obstructs the exercise of any power
40
conferred by this section or fails to comply with any requirement of an auditor
under this section is guilty of an offence.
(10)
A person guilty of an offence under subsection (9) is liable on summary
conviction—
(a)
to a fine not exceeding level 3 on the standard scale, and
45
(b)
to an additional fine not exceeding £20 for each day on which the
offence continues after the person has been convicted of it.

Local Democracy, Economic Development and Construction Bill [HL]
Part 2 — Local authorities: governance and audit
Chapter 2 — Audit of entities connected with local authorities
35

(11)
Any expenses incurred by an auditor in connection with proceedings for an
offence under this section, so far as not recovered from any other source, are
recoverable from the entity in relation to which the auditor is appointed.
(12)
The powers under this section are in addition to any other powers which an
auditor has in relation to the exercise of the auditor’s functions under or
5
pursuant to this Chapter.
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Consideration of report by entity
(1)
Where a report is made under section 42 in relation to an entity, the report must
be considered—
(a)
in the case of a company, at a general meeting of the company (to be
10
called by the directors under section 302 of the Companies Act 2006
(c. 46));
(b)
in the case of a limited liability partnership, at a meeting of the
members of the partnership;
(c)
in the case of an industrial and provident society, at a meeting of the
15
society in accordance with the rules of the society.
(2)
The meeting must be held before the end of the period of one month starting
with the day on which the report is sent to it.
(3)
The notice of the meeting must include a copy of the report.
(4)
At the meeting the entity must decide—
20
(a)
whether the report requires it to take any action, and
(b)
if so, what.
(5)
The entity must notify the local authority with which it is connected of—
(a)
its decision under subsection (4)(a), and
(b)
any decision under subsection (4)(b).
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(6)
If under subsection (4)(a) the entity decides that the report does not require it
to take any action, the notification under subsection (5)(a) must give reasons
for that decision.
(7)
The person who made the report may extend the period of one month
mentioned in subsection (2) if satisfied that it is reasonable to do so to allow the
30
entity to comply with its duties under this section.
(8)
A period may be extended under subsection (7) more than once.
(9)
This section does not affect any duties (so far as they relate to the subject-matter
of a report) imposed by or under any other enactment.
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Consideration of report by local authority
35
(1)
Where a report is made under section 42 in relation to an entity, the local
authority with which the entity is connected must—
(a)
consider the report and the entity’s decision or decisions under section
45(4) at a relevant meeting, and
(b)
decide whether the report and the decision or decisions require the
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authority to take any action, and if so what.

Local Democracy, Economic Development and Construction Bill [HL]
Part 2 — Local authorities: governance and audit
Chapter 2 — Audit of entities connected with local authorities
36

(2)
A local authority must discharge its duty under subsection (1) before the end
of the period of one month starting with the day on which the entity notifies
the local authority under section 45(5).
(3)
The person who made the report may extend the period of one month
mentioned in subsection (2) if satisfied that it is reasonable to do so to allow the
5
local authority to comply with its duty under subsection (1).
(4)
A period may be extended under subsection (3) more than once.
(5)
In subsection (1)(a) “relevant meeting” means—
(a)
in the case of a local authority not operating executive arrangements, a
meeting of the authority or of a committee of the authority;
10
(b)
in the case of a local authority operating executive arrangements—
(i)
a meeting of the executive, or
(ii)
if the function referred to in that subsection is a responsibility of
the authority, a meeting of the authority or of a committee of the
authority.
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(6)
The notice given of the meeting to members of the authority or of the executive
or committee of the authority (as the case may be) must include—
(a)
a copy of the report, and
(b)
a copy of the notification given by the entity under section 45(5).
(7)
Subsections (8) and (9) apply in relation to a meeting of a local authority or of
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a committee of a local authority under this section.
(8)
The following powers do not include power to exclude the report—
(a)
the power under section 1(4)(b) of the Public Bodies (Admission to
Meetings) Act 1960 (c. 67) to exclude items from the matter supplied
under that section (supply of agenda etc to newspapers);
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(b)
the power under section 100B(2) of the Local Government Act 1972
(c. 70) to—
(i)
exclude documents from the documents open to inspection
under section 100B(1) of that Act, or
(ii)
exclude items from the matter supplied under section 100B(7) of
30
that Act (public access to agenda and reports before meetings
and supply of agenda etc to newspapers).
(9)
Part 5A of the Local Government Act 1972 has effect in relation to the report as
if section 100C(1)(d) of that Act (public access to copies of reports for six years
after meeting) were not limited to so much of the report as relates to an item
35
during which the meeting was open to the public.
(10)
In this section—
(a)
“executive” and “executive arrangements” have the same meanings as
in Part 2 of the Local Government Act 2000 (c. 22);
(b)
references to a committee of a local authority include a sub-committee.
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(11)
This section does not affect any duties (so far as they relate to the subject-matter
of a report under section 42) imposed by or under any other enactment.

Local Democracy, Economic Development and Construction Bill [HL]
Part 2 — Local authorities: governance and audit
Chapter 2 — Audit of entities connected with local authorities
37

Supplementary
47
Fees
(1)
An entity in relation to which a person is appointed under this Chapter must
pay the appointing audit authority a fee in respect of the discharge by that
person of any of the functions specified by subsection (2) in relation to the
5
entity.
(2)
Those functions are—
(a)
functions under section 41(2) to (5);
(b)
functions under sections 42 to 46.
(3)
The entity must pay a fee under this section at such time, and otherwise in
10
accordance with such requirements, as the audit authority may specify.
(4)
The amount of a fee payable under this section is, subject as follows, to be such
as may be specified in or determined under a scale or scales of fees prescribed
by the audit authority for the purposes of this section.
(5)
Before prescribing a scale of fees under subsection (4) the audit authority must
15
consult—
(a)
such associations of local authorities, and
(b)
such bodies of accountants,

as it considers appropriate.
(6)
A scale of fees under this section is not to provide for the amount of a fee to be
20
different depending on whether or not the person appointed under this
Chapter is a member of staff of the audit authority.
(7)
A scale of fees under this section and standard terms and conditions under
section 40 are not to provide for fees of different amounts in respect of—
(a)
the discharge of a function referred to in subsection (2)(a), and
25
(b)
the discharge of an equivalent function pursuant to an appointment
pursuant to section 40(1).
(8)
If the Secretary of State considers it desirable or necessary to do so, the
Secretary of State may by regulations prescribe a scale or scales of fees to have
effect, for such period as is specified in the regulations, in place of any scale or
30
scales prescribed by the Audit Commission under subsection (4).
(9)
Before making any regulations under subsection (8) the Secretary of State must
consult—
(a)
the Audit Commission, and
(b)
such associations of local authorities, and such bodies of accountants,
35
as the Secretary of State considers appropriate.
(10)
If the Welsh Ministers consider it desirable or necessary to do so, they may by
regulations prescribe a scale or scales of fees to have effect, for such period as
is specified in the regulations, in place of any scale or scales prescribed by the
Auditor General for Wales under subsection (4).
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(11)
Before making any regulations under subsection (10) the Welsh Ministers must
consult—
(a)
the Auditor General for Wales, and

Local Democracy, Economic Development and Construction Bill [HL]
Part 2 — Local authorities: governance and audit
Chapter 2 — Audit of entities connected with local authorities
38

(b)
such associations of local authorities, and such bodies of accountants,
as the Welsh Ministers consider appropriate.
(12)
If it appears to the audit authority that the work involved in a particular case
differed (or is likely to differ) substantially from that envisaged by the person
prescribing the appropriate scale, the audit authority may charge a fee of an
5
amount different from that referred to in subsection (4).
48
Power of audit authority to require information
(1)
At any time after the appointment of a person under this Chapter in relation to
an entity, the appointing audit authority may for the purpose specified in
subsection (2) require the entity to produce to it—
10
(a)
the accounts audited by the person pursuant to section 40 or under
section 41, or
(b)
any other document or information relating to the entity to which the
person has or had a right of access under or pursuant to this Chapter.
(2)
The purpose referred to in subsection (1) is to enable an audit authority to
15
secure that persons appointed by the authority under this Chapter maintain
proper standards.
49
Subsidiaries of Passenger Transport Executives
(1)
For the purposes of this Chapter, where a relevant entity is an undertaking in
relation to which a Passenger Transport Executive is a parent undertaking, the
20
entity is to be regarded as connected with the Integrated Transport Authority
for the area for which the Executive is established.
(2)
In this section—
“undertaking” has the meaning given by section 1161 of the Companies
Act 2006 (c. 46);
25
“parent undertaking” has the meaning given by section 1162 of that Act.
(3)
Section 31 of the Audit Commission Act 1998 (c. 18) is repealed.
General
50
Regulations
(1)
Regulations under section 33(4)(b) or (5)(b) may provide for any expression
30
used in formulating a condition specified in the regulations to have the
meaning for the time being given by a relevant document identified in the
regulations.
(2)
In subsection (1), “relevant document”—
(a)
means a document that (at the time the regulations are made) is a
35
document identified for the purposes of section 21(2)(b) of the Local
Government Act 2003 (c. 26) by regulations made under that provision,
and
(b)
includes a document so identified by virtue of section 21(5) of that Act.
(3)
Regulations under this Chapter must be made by statutory instrument.
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Local Democracy, Economic Development and Construction Bill [HL]
Part 3 — Local government boundary and electoral change
39

(4)
A statutory instrument containing regulations under this Chapter made by the
Secretary of State is subject to annulment in pursuance of a resolution of either
House of Parliament.
(5)
A statutory instrument containing regulations under this Chapter made by the
Welsh Ministers is subject to annulment in pursuance of a resolution of the
5
National Assembly for Wales.
51
Interpretation
(1)
In this Chapter—
“audit authority” has the meaning given by section 33(2);
“Audit Commission” means the Audit Commission for Local Authorities
10
and the National Health Service in England;
“company” has the same meaning as in Part 16 of the Companies Act 2006
(c. 46) (see section 1 of that Act);
“financial year”—
(a)
in relation to a company, has the same meaning as in Part 16 of
15
the Companies Act 2006 (see section 390 of that Act);
(b)
in relation to a limited liability partnership, has the same
meaning as in Part 16 of the Companies Act 2006 (as it applies
in relation to limited liability partnerships);
(c)
in relation to an industrial and provident society, means a year
20
of account within the meaning of the Friendly and Industrial
and Provident Societies Act 1968 (c. 55) (see section 21 of that
Act);
“industrial and provident society” means a society registered (or deemed
to be registered) under the Industrial and Provident Societies Act 1965
25
(c. 12);
“limited liability partnership” means a limited liability partnership
formed under the Limited Liability Partnerships Act 2000 (c. 12) or the
Limited Liability Partnerships Act (Northern Ireland) 2002 (c. 12 (N.I.));
“local authority” has the meaning given by section 33(6);
30
“qualifying English local authority entity” has the meaning given by
section 33(4);
“qualifying Welsh local authority entity” has the meaning given by
section 33(5);
“relevant entity” has the meaning given by section 33(3).
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(2)
In this Chapter references to an entity being “connected with” a local authority
are to be construed in accordance with subsection (6) of section 212 of the Local
Government and Public Involvement in Health Act 2007 (c. 28).
Part 3
Local government boundary and electoral change
40
Establishment of the Local Government Boundary Commission for England
52
Local Government Boundary Commission for England
(1)
The Local Government Boundary Commission for England is established as a
body corporate.

Local Democracy, Economic Development and Construction Bill [HL]
Part 3 — Local government boundary and electoral change
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(2)
The Local Government Boundary Commission for England is not to be
regarded as a servant or agent of the Crown or as enjoying any status,
immunity or privilege of the Crown.
(3)
Accordingly, the property of the Local Government Boundary Commission for
England is not to be regarded as the property of the Crown or as property held
5
on behalf of the Crown.
(4)
The Local Government Boundary Commission for England may do anything,
except borrow money, which is calculated to facilitate, or is incidental or
conducive to, the exercise of its functions.
(5)
Schedule 1 (which makes further provision about the constitution and
10
administration of the Local Government Boundary Commission for England)
is part of this Part.
Local Government Boundary Commission for England: functions relating to electoral change
53
Review of electoral arrangements
(1)
The Local Government Boundary Commission for England must from time to
15
time—
(a)
conduct a review of the area of each principal council, and
(b)
recommend whether a change should be made to the electoral
arrangements for that area.
(2)
The Local Government Boundary Commission for England may at any time—
20
(a)
conduct a review of all or any part of the area of a principal council, and
(b)
recommend whether a change should be made to the electoral
arrangements for the area of the principal council.
(3)
In this Part “principal council” means—
(a)
a county council in England;
25
(b)
a district council;
(c)
the Council of the Isles of Scilly;
(d)
a London borough council.
(4)
In this Part “electoral arrangements”, in relation to the area of a principal
council, means—
30
(a)
the total number of members of the council (“councillors”),
(b)
the number and boundaries of electoral areas for the purposes of the
election of councillors,
(c)
the number of councillors to be returned by any electoral area in that
area, and
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(d)
the name of any electoral area.
(5)
Where under this section the Local Government Boundary Commission for
England recommends that a change should be made to the electoral
arrangements for the area of a principal council, the Commission must also
recommend whether, in consequence, a change should be made to the electoral
40
arrangements for the area of any parish council, where that area is within the
area of the principal council.
(6)
In this Part “electoral arrangements”, in relation to the area of a parish council,
means—