Select Committee on Delegated Powers and Deregulation Twenty-Seventh Report



Memorandum by Her Majesty's Treasury


1. The Government Resources and Accounts Bill (the Bill) was introduced in the House of Commons by the Chancellor of the Exchequer on 18 November 1999 and was brought from the House of Commons on 1st March 2000. The Bill completed its Third Reading in the Lords on 12 July 2000. The House of Commons will consider the amendments made by the Lords on 24 July 2000.

2. The Government was defeated at Third Reading in the Lords on a series of opposition amendments relating to the powers of the Comptroller and Auditor General (C&AG). As part of its consideration of the Lords amendments the Government will ask the House of Commons to disagree with these amendments to the Bill. However, the Government has proposed a further amendment to the Bill relating to the powers of the C&AG. This memorandum considers this proposed amendment which contains order making powers.

3. Assuming that the House of Commons accepts the Government's motion to disagree with the opposition amendments, the House of Lords will consider the amendments proposed by the House of Commons later in the week commencing 24 July 2000.

Powers of the C&AG

4. The opposition amendments successfully introduced into the Bill would grant the C&AG access for the purpose of carrying out his examinations to any documents (regardless of who holds them) to which a department or any of its non-departmental public bodies has, or could obtain, access. These amendments break the link between the access clause (clause 8) and the audit of departmental accounts thereby turning it into a general right of access for the C&AG. This would give the C&AG access to bodies and individuals contracting with, receiving grants from, paying tax to, or otherwise having financial dealings with a department or non-departmental public body.

5. The Government believes that such provisions could pre-empt the work of the review team, headed by Lord Sharman, which has been set up to consider the arrangements for audit and accountability in central government. It is expected that consideration of the access rights of the C&AG will form a major part of the review. Lord Sharman is expected to report around the end of this year.

6. The Government disagrees with the Lords amendments. If these are reversed then the link between the access clause and the audit of departmental accounts would be restored. In addition the Government has proposed an amendment which would give the Treasury a power to change the C&AG's access rights in relation to his audit of departmental accounts by order. This would enable any agreed recommendations made by Lord Sharman regarding access to be implemented.

7. The proposed amendment is to what is now clause 25 of the Bill. It builds on and is complementary to the existing order making power which would enable the Treasury to appoint the C&AG as the auditor of a non-departmental public body.

8. As this is a power that when exercised might affect a wide range of bodies it seems appropriate that this order making power should be subject to the affirmative resolution procedure in both Houses of Parliament.

July 2000

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