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Lord Davies of Oldham: In that respect, I was seeking to identify that we have been discussing particular categories with regard to educational associations and the issues of registered social landlords. The National Assembly for Wales already has powers in respect of those categories. The amendment would empower the Auditor General in a way that would limit the existing powers of the Assembly. That is the point I was making in response to the amendment.
Lord Thomas of Gresford: I am sorry, but I still do not follow. Under Clause 3, the Auditor General has the discretion to,
- "undertake or promote studies designed to enable him to make recommendations for improving economy, efficiency and effectiveness in the discharge of the functions of any relevant body or bodies".
Lord Davies of Oldham: The noble Lord will recognise that the powers of the Assembly in relation to these matters are derivative from the Government of Wales Act. The Auditor General for Wales has existing powers comparable to the Audit Commission, to which I referred in my original response to Amendment No. 12. There are specific areas with regard to particular groups—we have referred to the educational institutions and the registered social landlords—and, effectively, the amendments would give rise to an increase in the Auditor General's powers that would take some responsibility away from the National Assembly for Wales.
Lord Thomas of Gresford: With the greatest of respect, under the new clause, the only power that the Assembly would have would be to agree something with the Auditor General for Wales. I do not understand how that derogates from existing rights. I do not understand the distinction between registered social landlords or anyone else. I am sorry.
Lord Davies of Oldham: I am sorry if I am not being clear to the satisfaction of the noble Lord. As the noble Lord rightly said, under the amendments, the Auditor General would have the power to act; under the clause as it stands, he would work in consultation with. That
is the power of the National Assembly to which I referred. Under the amendment, that would be deleted and the Auditor General would have the power to act. That is why we object to the amendments, however gracefully they are put before us.
Baroness Noakes: As is often the case, the noble Lord, Lord Thomas of Gresford, has hit the nail on the head. This is an illogically constructed Bill, a point that I made earlier. We do not have, as the Minister tried to portray, a Bill built on real principles; we have a Bill built on borrowing a bit of legislation here and a bit of legislation there.
Many other principles would be equally good in that context or, I would argue, better. For example, the Auditor General should have complete independence regarding what he examines. The principle should be that our approach to financial audit and value-for-money audit across all public money in Wales is consistent and coherent. That is not the case, as amply demonstrated by the noble Lord, Lord Thomas of Gresford.
I am sure that the devolution settlement is immensely complex; I do not pretend to be an expert on it. With all respect to the noble Lord, Lord Thomas, I do not believe that that is the point at issue. The Bill would create new audit arrangements in Wales. In practice, we have a compromise from somewhere in the past, when the Audit Commission started to look at registered social landlords, picked up, lifted and given to us as complying with some grand principle in the context of Wales. It does not do that. That is another example of the illogicality of the Bill, to which I fear we shall return a number of times in Grand Committee.
Clearly, we need to reflect on the debate. Today is not a day to make decisions. I hope that the Minister will look at what principles underline the Bill. Simply to stick on not taking away the power of the Assembly is quite possibly the least meritorious of any principle that could be put forward in the context of redesigning the whole scheme of public audit in Wales. It should rest on some grander principle of effective audit of public money in Wales. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 13 to 15 not moved.]
Baroness Noakes moved Amendment No. 16:
- Page 7, leave out lines 1 to 5.
The noble Baroness said: In speaking to Amendment No. 16, I shall speak also to Amendments Nos. 17, 18 and 24, which are probing amendments designed to ensure that the new public audit arrangements in the Bill are consistent.
Amendment No. 16 would remove subsections (6) and (7) from new Section 145C of the Government of Wales Act, inserted by Clause 5 of the Bill. Subsections (6) and (7) set up a criminal offence, punishable by a level 3 fine, of not complying with requirements concerning access to documents. As I understand it, that is consistent with the English provisions in the
Audit Commission Act 1998. There are similar, though not identical, provisions in Clauses 19 and 53. But that is not consistent with compliance with the Auditor General's rights of access under Clause 11, which broadly covers his audit and value for money work other than on local government. That is why we have tabled Amendment No. 24 on a probing basis to put criminal offences into the whole of Clause 11.Returning to the theme of the Bill as a patchwork, in this case it is a patchwork of criminality. It is a criminal offence if registered social landlords or local government are involved, but not otherwise. In striving for consistency with England, the Government have created an inconsistent regime for Wales. They are thus in danger of missing a golden opportunity to create something logical and defensible across the whole of Wales, which is the most important thing to get right. The Government should decide whether infringement of access rights is criminal and should make the Bill consistent throughout.
The inconsistency does not end with the fact of criminality; it also goes to how the penalties are calculated, which is the reason for Amendments Nos. 17 and 18. They repeat for Clause 5 the extended fining provisions of Clauses 19 and 53. Our main concern is that the Welsh public audit regime has internal consistency. In practice, we doubt whether criminal sanctions are necessary. Could the Minister say how those sanctions have, in practice, been used by the Audit Commission in the past? Can he assure the Committee that they are necessary powers?
If the Government believe that the powers are necessary, will they introduce amendments to ensure that the powers are consistent across the whole regime? But if the Minister cannot demonstrate that criminal sanctions are important, I invite him to look again and bring forward amendments to remove those in the Bill. I beg to move.
Lord Thomas of Gresford: It seems extraordinary to include a criminal offence in a clause headed simply "Studies relating to registered social landlords". If the Auditor General is to have access to papers and may require a person to produce documents and attend in person, surely there must be some sanction in that regard covering the whole field, not simply in relation to registered social landlords.
The noble Baroness, Lady Noakes, is right. A great deal of the Bill has been lifted from earlier legislation and inserted in a patchwork way without any overall view. A right to documents and for witnesses to attend requires sanctions; that is obvious. I await the Minister's explanation of why they should be different, depending on the nature of the study being undertaken by the Auditor General.
Lord Davies of Oldham: Amendment No. 16 would eliminate the criminal sanctions that apply to any person who without reasonable excuse fails to provide the Auditor General with assistance, information and explanation in relation to certain of his rights of access
to documents and information for the purposes of undertaking studies under the provisions made in Clause 5.The amendment would create an inconsistency in sanctions relating to the conduct of study programmes in the registered social landlord sector between England and Wales. I am seeking to emphasise a principle. It is not quite the principle that the noble Baroness invited me to adumbrate, but the principle that the sanctions and laws should be similar for the same offence in England and Wales.
The primary purpose of the Bill is to enable the setting up of a single public audit body for Wales. In the Government's view, it would be entirely inappropriate for such a Bill to create inconsistencies in criminal law between England and Wales. The provisions in Clause 5 do not create any new criminal sanctions in respect of Wales. They merely preserve the existing position as it currently applies to England and Wales. Any future consideration of criminal penalties should be taken on an England and Wales basis. I make it clear that we do not regard that as a matter for this Bill.
Amendments Nos. 17 and 18 would align the criminal sanctions available to the Auditor General for non-compliance with those available under Clauses 18 and 53 to an appointed auditor and the Auditor General in relation to non-compliance with their respective rights of access to the documentation of a local government body in Wales. The amendments would again result in an inconsistency in the application of the criminal law between registered social landlords in England and Wales.
The criminal sanctions provision incorporated in Clauses 5, 18 and 53 all set out to preserve existing arrangements that apply in both England and Wales. I understand that the noble Baroness is berating me for saying that the Bill lifts from other legislation. But perhaps I may say that in this area, it does so on the basis of guaranteeing consistency of the sanctions that would apply between England and Wales for what I think would be regarded throughout the Committee as very good reasons.
I return to the point that in the Government's view criminal sanctions in primary legislation should be consistent across England and Wales. Their review or amendment is not a matter for the Bill. That is why I hope the noble Baroness will not press Amendments Nos. 16, 17 and 18.
The noble Baroness asked about the Audit Commission. We are not aware that the Audit Commission has in practice used the criminal sanction power. The point we are making is not what has taken place in practice but that the law at present in England and in Wales is consistent on sanctions. The Bill seeks to ensure that that consistency continues.
Amendment No. 24 would apply criminal sanctions provisions comparable to those that apply in respect of non-compliance without reasonable excuse to an appointed auditor's rights to documents and information in respect of a local government body in Wales. The Government take the view that it would
not be appropriate to apply criminal sanctions to bodies that are covered by accounting officer conventions. The extension of criminal sanctions in that respect would create an inconsistency in the criminal law between England and Wales. The criminal sanctions elsewhere in the Bill have been incorporated to avoid any such inconsistency.Any instance of non-compliance under the provisions of Clause 11 would first be notified to the accounting officer of the relevant body. If that did not produce a positive result, the Auditor General would have the option of reporting the matter to the National Assembly Audit Committee,- which could consider the issue. Ultimately, non-compliance could result in the withdrawal of accounting officer status. Where a person or body does not comply with the Auditor General's requirements for access, we are of the view that the Auditor General may apply for a judicial review of that decision where the person or body is amenable to challenge by way of judicial review. It is also possible for the Auditor General to apply for a mandatory injunction in the courts.
On that basis, I invite the noble Baroness not to move Amendment No. 24.
6 p.m.
Lord Thomas of Gresford: Is it the case that none of the regulations passed by the Welsh Assembly carry criminal sanctions? If they did, there would be obviously an inconsistency between the criminal law of England and the criminal law of Wales. I cannot imagine that there are regulations passed by the Assembly which do not carry criminal sanctions and that they must apply in different circumstances, but this business of refusing to accept amendments on the basis that they would produce an inconsistency with the criminal law in England is completely false. Can the Minister assure me that none of the regulations passed by the Assembly carry criminal sanctions that make the criminal law between England and Wales different at the moment?
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