The
Committee consisted of the following
Members:
David,
Mr. Wayne
(Parliamentary Under-Secretary of State for
Wales)
Dunne,
Mr. Philip
(Ludlow)
(Con)
Fisher,
Mark
(Stoke-on-Trent, Central)
(Lab)
Gummer,
Mr. John
(Suffolk, Coastal)
(Con)
Harris,
Mr. Tom
(Glasgow, South)
(Lab)
Heyes,
David
(Ashton-under-Lyne)
(Lab)
James,
Mrs. Siân C.
(Swansea, East)
(Lab)
Jones,
Mr. David
(Clwyd, West)
(Con)
Joyce,
Mr. Eric
(Falkirk)
(Lab)
Leigh,
Mr. Edward
(Gainsborough)
(Con)
Price,
Adam
(Carmarthen, East and Dinefwr)
(PC)
Ruane,
Chris
(Vale of Clwyd)
(Lab)
Shepherd,
Mr. Richard
(Aldridge-Brownhills)
(Con)
Simpson,
Alan
(Nottingham, South)
(Lab)
Tami,
Mark
(Alyn and Deeside)
(Lab)
Williams,
Mark
(Ceredigion) (LD)
Simon
Patrick, Committee Clerk
attended the Committee
Fifth
Delegated Legislation
Committee
Tuesday 12
January
2010
[John
Cummings in the
Chair]
Draft
Local Government (Wales) Measure 2009 (Consequential
Modifications) Order
2009
10.30
am
The
Parliamentary Under-Secretary of State for Wales (Mr. Wayne
David): I beg to move,
That the
Committee has considered the draft Local Government (Wales) Measure
2009 (Consequential Modifications) Order
2009.
It
is a pleasure to serve under your chairmanship, Mr.
Cummings.
We
have laid the order at the request of the Welsh Assembly Government to
make a few minor, technical amendments to the Government of Wales Act
2006. The amendments relate to inspection and audit fees charged by the
Auditor General for Wales and are consequential on the Local Government
(Wales) Measure passed by the National Assembly for Wales last year.
The amendments are needed to ensure that the Measure operates as
intended and that fees charged under the Measure are treated in the
same way as the current fees charged under existing
legislation.
The
Local Government (Wales) Measure has several broad purposes. First, it
replaces the system of best value in local government with a new local
government improvement regime, which introduces a broader set of duties
and powers for service improvement by local authorities. Secondly, it
reforms the process for producing community strategies and requires
local authorities and other local service providers to collaborate in
developing and implementing a long-term strategy for enhancing local
well-being. Thirdly, it joins those two processes together, requiring
local authorities to reflect strategic objectives in service
improvement. Local government in Wales has long been devolved and the
changes are all within the legislative competence of the National
Assembly, but one small element of the package of changes is outside
the Assembly's legislative competence: that element is addressed by the
draft
order.
As
well as replacing the best value regime created by the Local Government
Act 1999, the Measure replaced the inspection and audit regime under
that Act. Independent audit is, of course, vital to public
accountability, and it can also stimulate improvement. The Measure
reflects that principle. It also streamlined and simplified the role of
the Auditor General for Wales and the Wales Audit Office in inspecting
and auditing local authority performance. In particular, it gave the
Auditor General greater flexibility to support performance improvement
and to report clear findings, which enhance local and national
accountability.
The
Measure also sought to preserve the principle that public audit and
inspection takes place on a quasi-contractual basis between auditors
and the bodies they audit and is funded by fees levied on audited
bodies, rather than from central Government funds. That practice is
widely accepted across the UK for two reasons: first,
it maintains audited bodies' responsibility for and ownership of the
audits to which they are subjected, and avoids a general charge on the
public purse; secondly, the extent and thus the cost of an audit
generally reflects the level of risk within an organisation, so funding
it via fees provides a further incentive to public bodies to improve
their standards of corporate governance and performance management,
leaving them liable to a lower
fee.
Although
the Measure empowered the Auditor General to levy fees for audits and
inspections as before, it could not deal with the accounting treatment
of those fees. Under section 120(1)(c) of the Government of Wales Act
2006, the default position is that the Auditor General must surrender
any income he or she receives to the Welsh Consolidated Fund. The Act
made exceptions to that rule to allow the Auditor General to retain
income from specified sources, including fees charged under the Local
Government Act 1999. That means that best value audit and inspection is
funded from fees, and preserves the general principles that I have
described.
The
Measure made no equivalent provision for fees charged under the new
improvement regime because it could not. In general, the Assembly is
prohibited from passing a Measure that amends the 2006 Act. There are
obvious constitutional reasons for that general rule, but in the
present case it creates a problem that only an instrument such as the
draft order can solve. The Auditor General would have to surrender fee
income to the Welsh Consolidated Fund and audit and inspection work
under the Measure would have to be financed centrally from that fund.
That would be contrary to established practice across the UK and would
diminish the local ownership and effectiveness of such
work.
The
draft order will correct the problem and allow the Auditor General to
retain fees charged under the Measure. It will also ensure that the
Assembly's Audit Committee cannot examine estimates of the Auditor
General's fee income under the Measure, just as it cannot now examine
fee income under the Local Government Act 1999. That reflects the fact
that the Committee's remit does not extend to the Auditor General's
work in relation to local government performance. In making those
changes, the draft order will maintain long-established principles and
practices, which exist for sound reasons of public management and
accountability. The Wales Audit Office strongly supports the
orderindeed, it believes that it is vital to make the order
before the start of the 2010-11 financial year, when audit work under
the Measure will begin. I therefore commend the draft order to the
Committee.
10.36
am
Mr.
David Jones (Clwyd, West) (Con): It is a pleasure for me,
too, to serve under your chairmanship, Mr. Cummings. I am
sure that it will be an equal pleasure to you to hear that it is likely
to be a very short period of
service.
The
draft order makes necessary amendments to the Government of Wales Act
2006, consequential on the Local Government (Wales) Measure, and we do
not propose to oppose
it.
Question
put and agreed
to.
10.36
am
Committee
rose.