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Documents and information
369. Paragraph 13 provides a general power for the NAO to receive information on behalf of, and from, the C&AG. By sub-paragraph (2), information held by NAO on behalf of the C&AG will be treated as being held by NAO for the purposes of section 3(2) of the Freedom of Information Act 2000. This means NAO will be responsible for discharging obligations under that Act both for itself and for the C&AG.
SCHEDULE 9: TRANSITIONAL PROVISION
370. This schedule makes transitional provision to preserve the continuity of rights and obligations between the old NAO and the new. In particular, it provides for the transfer of property rights and employment obligations. While obligations under audit contracts are expected to remain with the C&AG, the intention is that all other property, rights and liabilities will transfer to the new NAO whose responsibility it will be to provide and manage the resources that the C&AG requires.
Transfer of property etc
371. Paragraph 1 provides for the C&AG to determine which property, rights and liabilities of the C&AG are to be transferred to the NAO as a consequence of this Bill and to prepare a scheme which describes that property and those rights and liabilities. The scheme has to be approved by the Commission. At the appointed time, (which by sub-paragraph (12) is a date set for that purpose by the Treasury), the property, rights and liabilities described in the scheme are transferred to the new NAO.
372. Sub-paragraphs (5) and (6) provide for the continuity of employment of NAO staff. The rights and liabilities that may be transferred to the NAO include those under contracts of employment in relation to staff of old NAO (who were appointed under section 3(2) of the 1983 Act). Periods of employment with old NAO are to be treated as employment by new NAO, as are periods of employment in the former Exchequer and Audit Department (for those employees who transferred to old NAO as a result of section 3(2) and paragraph 2 of Schedule 2 to the 1983 Act). A transfer to new NAO is not to be treated as a break in service.
373. Sub-paragraphs (7) and (8) provide for the continuing effect of things done by or for the C&AG in relation to anything that is transferred to NAO under sub-paragraph (3) so far as is appropriate. This means, for example, that actions or procedures taken by the C&AG will not need be renewed or retaken by NAO to continue their effectiveness. Things that were in the process of being done by the C&AG in relation to anything transferred (such as ongoing legal proceedings) may be continued after the appointed time by the new NAO. So far as is appropriate as a result of the transfer, by sub-paragraph (9) references in agreements to the C&AG are to be read as or including a reference to new NAO. Sub-paragraphs (10) and (11) allow a person’s employment by old NAO to be treated as employment by new NAO before new NAO comes into existence for limited purposes in connection with the establishment of new NAO.
Tax consequences of transfers by virtue of paragraph 1(3)
374. Paragraphs 2 to 4 make provision for corporation tax consequences of the transfer. The effect is to remove tax consequences that would otherwise have arisen only because of the transfer and to provide continuity of tax treatment.
Old Comptroller and Auditor General to continue to be Comptroller and Auditor General
375. Paragraph 5 provides that the person who is C&AG at the appointed time will continue to hold the office of C&AG and be treated as if appointed under the provisions of this Bill. Although that person will have been appointed under the old legislation for an unlimited term, sub-paragraph (2) provides for the ten year period of office of clause 42(7) to apply. The ten-year period begins from the day that person took office under the current legislation. The new remuneration arrangements under clause 45 will apply but will not cover any period before the appointed time, that is, a time appointed for the purposes of this paragraph by an order made by the Treasury. The appointment of a new C&AG designate was announced in January 2009. On 1 June, Amyas Morse was appointed as the new C&AG under the current legislation. He understands the revised terms of appointment and has agreed to accept them.
Provision of services
376. Paragraph 6 provides for continuity of the powers under which the C&AG acts. Anything done under power which is no longer available is to be treated as having been done under the general power of clause 44, so far as necessary or appropriate.
377. Paragraph 7 provides that existing contracts for the C&AG to provide services will not become subject to the new approval regime of paragraph 3 of Schedule 8 when that regime first comes into effect. However, the charging provisions of paragraph 8 of that Schedule will apply as if they were NAO approved services. When a current contract expires or is renewed, it would then become subject to the approval regime.
Indemnification
378. Paragraph 8 provides for the indemnities in clause 52 to extend to liabilities that arise before the coming into force of that clause, and liabilities that arise in relation to acts or omissions that occur before then. They also cover persons who were formerly members of NAO staff. This provision is needed to ensure that there is no break in cover between the indemnity set out in section 4(6) of the National Audit Act 1983 and that in clause 52 of this Bill.
NAO’s procedural rules before rules made under paragraph 18 of Schedule 7
379. Paragraph 9 sets out the procedural rules that apply to meetings of NAO before it has drawn up internal rules under paragraph 18 of Schedule 7. These provisions on the quorums, majorities and casting votes will apply to meetings at which the NAO prepares its internal rules and the draft code under paragraph 10 of Schedule 8.
SCHEDULE 10: CONSEQUENTIAL AMENDMENTS
380. This schedule contains amendments which are minor or consequential on the measures in the Bill.
Exchequer and Audit Departments Act 1866
381. Paragraph 2 repeals sections of the Exchequer and Audit Departments Act 1866 that relate to the appointment and tenure of the C&AG. New provision is made in this Bill, in particular in clauses 42, 43 and 46.
Exchequer and Audit Departments Act 1957
382. Paragraph 3 repeals the Exchequer and Audit Departments Act 1957. New provision for the C&AG’s salary and powers of delegation are made in clause 45 of, and paragraph 6 of Schedule 8 to, this Bill.
Public Records Act 1958
383. Paragraph 4 provides for the reference in Schedule 1 to the Public Records Act 1958 to be read as a reference to new NAO.
Superannuation Act 1972
384. Paragraph 5 amends section 13 of the Superannuation Act 1972, which deals with the pension arrangements of the C&AG, so that it will not apply to a C&AG who is appointed under this Bill. New pension arrangements are provided for under clause 45. Paragraph 6 amends the entry for staff of the NAO in Schedule 1 to the Superannuation Act 1972. This allows NAO employees to continue to be eligible for membership of the Principal Civil Service Pension Scheme. Any entitlement of a member of staff of the NAO who leaves before the creation of new NAO is not affected.
House of Commons Disqualification Act 1975
385. Paragraph 7 amends Schedule 1 to the House of Commons Disqualification Act 1975. Members of the NAO (including the C&AG) and NAO employees are disqualified from becoming members of the House of Commons.
Northern Ireland Assembly Disqualification Act 1975
386. Paragraph 8 amends Schedule 1 to the Northern Ireland Assembly Disqualification Act to disqualify NAO members (including the C&AG) and employees from becoming members of the Northern Ireland Assembly.
Parliamentary and other Pensions and Salaries Act 1976
387. Paragraph 9 omits section 6(3) of the Parliamentary and other Pensions and Salaries Act 1976. Its provisions on the C&AG’s salary are superseded by those in clause 45.
Race Relations Act 1976
388. Paragraph 10 provides for the C&AG and the new NAO to be or continue to be subject to the general statutory duty under section 71 of the Race Relations Act 1976. It also provides for continuity between the old and the new structures for things done or in the process of being done.
Interpretation Act 1978
389. Paragraph 11 amends the definition of Comptroller and Auditor General in Schedule 1 to the Interpretation Act 1978 to remove the reference to appointments made under Exchequer and Audit Departments Act 1866.
National Audit Act 1983
390. Paragraph 12 omits a number of sections of the National Audit Act 1983 which are superseded by provisions in this Act. They include provisions on the appointment process of the C&AG (see clause 42); the status of the NAO (see clause 48 and Schedule 7); NAO’s expenditure and audit (see clauses 50 and paragraph 25 of Schedule 7). The repeal of section 3(4) of the 1983 Act does not affect staff of old NAO who cease to be members of PCSPS before the transfer of property rights and liabilities under paragraph 1(3) of Schedule 9 comes into effect.
391. Paragraph 13 moves a requirement which is currently in section 1 of the 1983 Act to Part 2 of that Act, as a new section 7A. The requirement is for the C&AG to have regard to proposals made by the Committee of Public Accounts, in considering whether to carry out a value for money examination under that Part of the 1983 Act.
Finance Act 1989
392. Paragraph 14 amends section 182 of the Finance Act 1989 to ensure that an existing offence for disclosing certain types of information (including tax and social security information) held by the C&AG and members of staff of NAO will continue to cover NAO and its employees under the new structure. The offence will also continue to apply to the C&AG for Northern Ireland, and the staff of the Northern Ireland Audit Office.
Social Security Administration Act 1992
393. Paragraph 15 amends section 23 of the Social Security Administration Act 1992 to ensure that a disclosure offence which protects social security information related to particular persons continues to apply under the new structure of the NAO. The offence also continues to apply to the C&AG for Northern Ireland and the staff of the Northern Ireland Audit Office.
Taxation of Chargeable Gains Act 1992
394. Paragraph 16 adds paragraph 4 of Schedule 9 (which provides no gain or loss treatment for a transfer from the C&AG to the new NAO) to a list of “no gain/ no loss provisions” in section 288(3A) of the Taxation of Chargeable Gains Act 1992.
National Lottery etc. Act 1993
395. Paragraph 17 amends the National Lottery etc. Act 1993 to provide that the National Lottery Commission will continue to be permitted to make disclosures to the C&AG in connection with value for money examinations under Part 2 of the National Audit Act 1983.
Government of Wales Act 1998
396. Paragraph 18 repeals paragraph 1 of Schedule 12 to the Government of Wales Act 1998. This means that the C&AG will no longer be able to hold the office of Auditor General for Wales at the same time.
Government Resources and Accounts Act 2000
397. Paragraph 19 amends paragraph 18 of Schedule 1 to the Government Resources and Accounts Act 2000 to omit provisions related to the preparation of the NAO’s accounts which have been superseded by those in paragraphs 24 and 25 of Schedule 7 to this Bill.
Freedom of Information Act 2000
398. Paragraphs 20 and 21 provide for the continuity of obligations under the Freedom of Information Act 2000 between the old NAO the new NAO and the C&AG. The new NAO will take on the information obligations of old NAO. It will hold information on behalf of the C&AG under the new structure and be responsible for dealing with requests under that Act.
Constitutional Reform Act 2005
399. Paragraph 22 omits paragraph 7 of Schedule 6 to the Constitutional Reform Act 2005. This provision is superseded by the new arrangements for delegation of the C&AG’s functions in paragraph 6 of Schedule 8 to this Bill.
Government of Wales Act 2006
400. Paragraph 23 adds the National Audit Office to paragraphs 5 and 8 of Schedule 5 to the Government of Wales Act 2006 to reflect the fact that certain functions currently carried out by the C&AG will in future be carried out by the NAO. The Assembly in Wales will not be able to modify functions of either the C&AG or the NAO without the consent of the Secretary of State.
Companies Act 2006
401. Paragraph 24 omits section 1230(3)(a) of the Companies Act 2006 which is superseded by the new duty for NAO to provide the C&AG with resources under paragraph 2 of Schedule 8 to the Bill.
Corporate Manslaughter and Corporate Homicide Act 2007
402. Paragraph 26 omits the reference to old NAO from Schedule 1 to the Act, but enables proceedings to be taken against old NAO in the event that offences are alleged to have been committed by old NAO before this provision comes into force. The offence in section 1 of the 2007 Act automatically applies to new NAO because it is a body corporate.
Court Funds Rules 1987 (S.I. 1987/821)
403. Paragraph 27 provides for the C&AG to authenticate a copy of an account relating to a fund in court that has been issued by the Accountant General in response to a request under rule 63 of the Court Funds Rules 1987.
Official Secrets Act 1989 (Prescription) Order 1990 (S.I. 1990/200)
404. Paragraph 28 amends the Official Secrets Act 1989 (Prescription) Order 1990 so that members and employees of the new NAO will be treated as if they were Crown servants for the purposes of the Official Secrets Act 1989.
Race Relations (Prescribed Public Bodies) (No. 2) Regulations 1994 (S.I. 1994/1986)
405. Paragraph 30 provides that new NAO will continue to be prescribed for the purposes of section 75(5) of the Race Relations Act 1976. Prescription allows NAO to apply certain employment restrictions notwithstanding that Act.
Scotland Act 1998 (Transitory and Transitional Provisions) (Publications and Interpretation etc of Acts of the Scottish Parliament) Order 1999 (S.I. 1999/1379)
406. Paragraph 31 amends the definition of the C&AG for the purposes of interpreting legislation made by the Scottish Parliament, by removing the reference to the C&AG’s appointment under the Exchequer and Audit Departments Act 1866.
Public Interest Disclosure (Prescribed Persons) Order 1999 (S.I. 1999/1549)
407. Paragraph 32 amends the description of the C&AG in the Schedule of prescribed persons to whom a protected “whistleblowing” disclosure may be made.
Greater London Authority (Disqualification) Order 2000 (S.I. 2000/432)
408. Paragraph 33 provides that members and employees of the NAO may not be mayor of London or a member of the London Assembly.
Financial Services and Markets Act 2000 (Disclosure of Confidential Information) Regulations 2001 (S.I. 2001/2188)
409. Paragraph 34 allows the National Lottery Commission to disclose confidential information, within the meaning of the Financial Services and Markets Act 2000, to the C&AG for the purposes of value for money examinations under Part 2 of the National Audit Act 1983.
Race Relations Act 1976 (Statutory Duties) Order 2001 (S.I. 2001/3458)
410. Paragraph 35 provides for the C&AG and the new NAO to be or continue be subject to the obligation to prepare a Race Equality Scheme under article 2 of this Order. It also provides for continuity between the old and the new structures for things done or in the process of being done.
Disability Discrimination (Public Authorities) (Statutory Duties) Regulations 2005 (S.I.2005/2966)
411. Paragraph 36 provides for the C&AG and the new NAO to be or continue to be subject to the duty to prepare and implement a Disability Equality Scheme under article 2 of these Regulations. It also provides for continuity between the old and the new structures for things done or in the process of being done in relation to that duty.
Public Contracts Regulations 2006 (S.I. 2006/5)
412. Paragraph 37 ensures that the new NAO like the old NAO is subject to the procurement obligations and thresholds that apply to a body listed in Schedule 1 to the Public Contracts Regulations 2006 (“GPA Annex 1A contracting authorities”).
Sex Discrimination Act 1975 (Public Authorities) (Statutory Duties) Order 2006 (S.I. 2006/2930)
413. Paragraph 38 provides for the C&AG and the new NAO to be or continue to be subject to the general statutory duty to prepare and implement a Gender Equality Scheme. It also provides for continuity between the old and the new structures for things done or in the process of being done in relation to that duty.
Child Support Information Regulations 2008 (S.I. 2008/2551)
414. Paragraph 39 provides that the offence for disclosure of information under section 50 of the Child Support Act 1991 will continue to apply to current and former members and employees of NAO.
PART 8: TRANSPARENCY OF GOVERNMENT FINANCIAL REPORTING TO PARLIAMENT
Clause 57: Inclusion in departmental estimates of resources used by designated bodies
415. Subsection (1) provides that the clause amends the Government Resources and Accounts Act 2000 (“the GRAA 2000”).
416. Subsection (2) inserts a new section 4A into the GRAA 2000. Its provisions are as follows:
417. New section 4A(1) gives the Treasury powers to give directions regarding how a government department must prepare a Supply Estimate for approval by the House of Commons in respect of a financial year.
418. New section 4A(2) gives the Treasury powers to direct that the departmental Supply Estimate include information relating to resources expected to be used by any body that is a designated body in relation to that department.
419. New section 4A(3) provides that a body is a designated body in relation to a government department either if it is designated by an order made by the Treasury or it falls within a description of body designated in relation to the department by a Treasury order.
420. New section 4A(4) provides for a body to be designated either for a particular financial year or generally.
421. New sections 4A(5) to 4A(8) make provision in relation to bodies funded out of a devolved Consolidated Fund. Section 4A(5) provides that sections 4A(6) and (7) apply if the Treasury expect the use of resources by a body in a financial year to involve payments out of a devolved Consolidated Fund to or for the benefit of a body but do not expect the use of resources by the body to involve payments out of the Consolidated Fund of the United Kingdom to or for the benefit of that body. Examples of such bodies would include SportScotland (an NDPB funded entirely by the Scottish Executive) and the Higher Education Funding Council for Wales (also an NDPB, which provides funding to higher education institutions in Wales and is funded by the National Assembly for Wales). There is no intention of designating any body that is wholly funded from a devolved Consolidated Fund. Where, exceptionally, a UK government department were to make a payment to a body operating in a devolved area and largely funded by a devolved administration, the Treasury plans to agree administrative arrangements that would ensure such a body was not designated.
422. New section 4A(6) provides that if the conditions in section 4A(5) are met the Treasury must notify the relevant government department that the conditions are met and treat the body as though it were not designated for that year.
423. New section 4A(7) prevents the Treasury from making an order designating a body if the conditions in section 4A(5) are met and no order is already in force in relation to that body.
424. New section 4A(8) provides for the Treasury, where appropriate, to consult the Scottish Ministers, the Welsh Ministers or the Department of Finance and Personnel for Northern Ireland before designating a body or a description of body.
425. New section 4A(9) provides that in determining for any purpose whether a body has a particular relationship with a government department the fact that a departmental Supply Estimate includes information relating to that body, or departmental resource accounts include information relating to the body, is to be disregarded. This provision is intended to make it clear that designating a body does not of itself alter the existing relationship between that body and the government department.
426. New section 4A(10) provides that an order made by the Treasury under section 4A(3) must be made by statutory instrument.
427. New section 4A(11) provides that a statutory instrument containing such an order will be subject to the negative resolution procedure.
428. New section 4A(12) defines what is meant by ‘a devolved Consolidated Fund’ (see section 4A(5)).
429. Subsection (3) amends section 5(1) of the GRAA 2000. Section 5(1), as amended, will require a government department to include the resources acquired, held or disposed of by any designated body when preparing resource accounts.
430. Subsection (4) amends section 6(1) of the GRAA 2000. That section requires the Comptroller and Auditor General to satisfy himself of certain matters when examining any resource accounts which he receives from a department. Section 6(1), as amended, will require the Comptroller and Auditor General to satisfy himself, amongst other things, that the financial transactions of the department and the financial transactions of any designated body are in accordance with any relevant authority.
Clause 58: Corresponding provision in relation to Wales
431. Subsection (1) provides that the clause amends Part 5 of the Government of Wales Act 2006 (“GOWA 2006”).
432. Subsection (2) inserts a new section 126A into the GOWA 2006. Its provisions are as follows:
433. New section 126A(1) gives Welsh Ministers the power to include information relating to the use of resources by a designated body in a Budget Motion for the financial year.
434. New section 126A(2) provides Welsh Ministers with the power to designate bodies for these purposes. Ministers can designate individual bodies, or categories of bodies. Designation must be made by order.
435. New section 126A(3) provides for a body to be designated either for a particular financial year or generally.
436. New sections 126A(4) requires the Welsh Ministers to obtain the consent of the Treasury before designating any body that they expect will receive funding from a “relevant Consolidated Fund” in a particular financial year. Section 126A(5) defines a “relevant Consolidated Fund” as the UK Consolidated Fund, the Scottish Consolidated Fund or the Consolidated Fund of Northern Ireland.
437. New section 126A(6) requires the Welsh Ministers to consult with the Treasury before designating a body or a description of body, in cases where Treasury consent is not needed but the Welsh Ministers consider it appropriate to consult.
438. New section 126A(7) provides that in determining for any purpose whether a body has a particular relationship with a “relevant person”, the fact that the budget motion, or the “relevant person’s” resource accounts, include information relating to the body, is to be disregarded. This provision is intended to make it clear that designating a body does not of itself alter the existing relationship between that body and the Welsh Ministers (or other “relevant person”).
439. New section 126A(8) provides that an order made by the Welsh Minister under subsection (2) must be made by statutory instrument.
440. New section 126A(9) and (10) provides that a statutory instrument containing such an order will be subject to either the affirmative or negative resolution procedure in the Assembly. The choice of procedure will be made by Welsh Ministers as appropriate in recognition of their key budgetary responsibilities. For instance, the Welsh Ministers may choose to use the affirmative procedure where they are proposing major changes to designated bodies, and it is appropriate for the Assembly to have the opportunity to debate these fully; while Ministers may choose the negative procedure in cases where minor or uncontroversial amendments are to be made.
441. Subsection (3) provides that the clause amends Schedule 8 to the GOWA 2006.
442. Subsection (4) inserts a new paragraph 13(1A). Paragraph 13(1) of Schedule 8 to the GOWA 2006 provides that the Auditor General for Wales must, for each financial year, prepare accounts in accordance with directions given by the Treasury. The new paragraph 13(1A) provides that such directions to prepare accounts may include directions to prepare accounts relating to financial affairs and transactions of persons other than the Auditor General. This would allow the inclusion of information about bodies designated in relation to the Auditor General.
443. Subsection (5) amends paragraph 15 of Schedule 8 to the GOWA 2006, which relates to the audit of accounts prepared by the Auditor General. Subsection (5) makes consequential amendments to paragraph 15 to allow the auditors of the Auditor General for Wales’s accounts to obtain necessary information concerning transactions of designated bodies which are included in those accounts.
444. Subsection (6) amends paragraph 17(8) of Schedule 8 to the GOWA 2006 to allow the Auditor General for Wales to have access to documents and financial information relating to the financial affairs of any designated body included in the accounts of the Public Services Ombudsman for Wales.
445. Subsection (7) amends Schedule 1 to the Public Services Ombudsman (Wales) Act 2005. Paragraph 16(1) of that Schedule provides that the Ombudsman must, for each financial year, prepare accounts in accordance with directions given to him by the Treasury. Subsection (7) inserts a new paragraph 16(1A) to allow such directions to include directions to prepare accounts relating to financial affairs and transaction of persons other than the Ombudsman. This would allow the inclusion of information about bodies designated in relation to the Ombudsman.
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