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Lord Davies of Oldham: It is certainly the case that Assembly provisions cover the issue of criminal sanctions, but we are not aware of any instance of inconsistency between what is provided for in Wales and what is provided for in England. That is the burden of our position with regard to the Bill. I ask the noble Baroness to withdraw the amendment.
Baroness Noakes: Before we come to that, perhaps I may ask a question on a point raised by the noble Lord, Lord Thomas of Gresford, with regard to the apparent principle of not creating an inconsistency in criminal law.
Clause 39 gives the Assembly the ability to make regulations under which criminal offences can be created. I shall probe that aspect in later amendments. So within the Bill, the Assembly has an ability to create a criminal offence. Therefore, the principle advanced by the Minister that there should be no inconsistency between England and Wales will break down as soon as the Assembly uses the power in the Bill under the
account and audit regulations. There is nothing to say that the Assembly must pass those regulations in a form common with those relating to England. The principle advanced by the Minister is therefore suspect.When the Minister replied to the debate he, in effect, answered for himself. This is not logical for Wales. Under the guise of consistency with England—but really under the guise of not changing what already exists—we are creating layers of complexity for Wales which would not exist if the Government were to take the approach of ensuring that the Bill was itself consistent.
The Minister may have gathered that I remain to be convinced that the so-called principles adopted by the Government are the right ones. Indeed, in relation to inconsistency in the criminal law, given Clause 39, I am not convinced that they are proper principles at all. I will withdraw the amendment but I promise the Minister that we will return to this subject on Report. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 17 and 18 not moved.]
Baroness Noakes moved Amendment No. 19:
- Page 7, line 40, leave out "appears to him to be" and insert "is"
The noble Baroness said: In moving Amendment No. 19, I shall speak also to Amendment No. 20. Both amendments relate to new Section 93A of the Government of Wales Act as inserted by Clause 7 of the Bill. Section 93A deals with the fees charged by the Auditor General.
Amendment No. 19 is a probing amendment which deals with the small puzzle of to what bodies the Auditor General will be charging audit fees. Section 93A starts with a permissive power in subsection (1) which allows the Auditor General to charge fees. But subsection (2) "requires" the Auditor General to charge fees if a person is being audited by consent and "it appears to him"—that is, the Auditor General—that the audited person is "connected with" local government or the NHS in Wales. My probing amendment would delete the words "appears to him to be" and insert the more positive "is".
As I said, it is a probing amendment. It seems to me curious that we cannot unambiguously state in statute the audited person who would be liable to pay fees. Indeed, there are bodies which are so ambiguous that their status has to be settled by their appearances to the Auditor General. Either a body is or is not connected with the NHS or local government. If it is ambiguous, I invite the Government to be more specific about what "connected with" means.
I am mystified why, in the case of all audits by consent under Section 96(3)(a), there is not a provision for the Auditor General to charge fees. Why is it restricted to this category of body connected with, or appearing to be connected with, the NHS or local
government? Can the Minister explain the rationale for some bodies being required to pay fees when they are audited by consent and others not?Amendment No. 20 probes the financial basis of the Auditor General's fees. The amendment seeks to insert "but does not exceed" into subsection (4) of new Section 93A in order that fees under that subsection must cover but not exceed the full cost. We could as easily have tabled this amendment in relation to subsection (2) or tabled a different amendment to probe whether the different formulation in subsection (3), which refers to not exceeding full cost, has a different meaning. I hope that the Minister will respond to the amendment with the different formulations within the section in mind.
The amendment also gives us an opportunity to ask what is meant by "full cost" in these circumstances and to seek more information about the funding of the Auditor General and his organisation. Are some overheads included in "full cost"? If so, how are they apportioned between different types of work? Who will consider that? Will the Assembly or the Audit Committee examine the fee arrangements of the Auditor General, especially as the Assembly has to pick up the bill for the costs that the Auditor General does not recover by way of fees.
I hope the Minister will take this opportunity to clarify the funding aspects of the Auditor General and his office. I beg to move.
Lord Davies of Oldham: I am grateful to the noble Baroness for moving the amendment, although the further she went into her series of questions the less grateful I became. I am too ill-briefed to respond to a number of them but I shall do the best I can. Any deficiencies will be made up later. She was kind enough to state that these are probing amendments but I am afraid that some probes will receive an answer in the form of a written reply rather than anything I can say at this point.
Amendment No. 19 would limit the Auditor General's discretion to make a reasonable judgment in deciding whether a person is or is not connected to local government or the NHS in Wales for the purpose of recovering the full cost of services provided.
The clause adds a new Section 93A to the Government of Wales Act and makes new provision for fee charging and recovery of costs by the Auditor General. Section 93A(2) would require the Auditor General to recover the full cost of providing services in respect of the accounts of any person that appeared to him connected with local government and the health service in Wales, over and above his statutory responsibilities under the Bill. The Auditor General may provide those services where the person whose accounts are to be audited has agreed with the Assembly or a Minister of the Crown that the accounts should be audited by the Auditor General.
The Auditor General would have to establish the relationship beyond doubt and that could hamper him in the performance of his duties. The employment
terms and conditions of a person can, as the noble Baroness will recognise, be very complex—for instance, in any "arm's length" arrangement—and the Auditor General would have to make a judgment on such an issue. His judgment could be subject to judicial review. The clause gives the Auditor General a degree of protection in exercising that judgment and enables him to demonstrate, if challenged, that he had made a reasonable decision in all the circumstances when reaching the position that the person was so appropriately employed that he should pay the fee.Amendment No. 20 would have the effect of requiring the Auditor General to charge a fee that did not exceed the full cost of undertaking claims and returns certification work under the proposed Section 96B of the Government of Wales Act 1998 and for undertaking economy, efficiency and effectiveness studies at the request of educational bodies under Clause 4 and local government bodies under Clause 44.
The amendment is unnecessary. Clause 7(4) is clear that the Auditor General must cover full cost but no more. The same provision is made in proposed Section 93A(2) of the Government of Wales Act and in Clause 7 in relation to services provided to any person connected with local government or the health service which are outside the Auditor General's statutory functions. So the point is covered.
The noble Baroness asked about the definition of "full cost". If I produced a definition, I am not sure it would pass her critical examination. I am not in a position to define "full cost", except to say that the Auditor General's operations can clearly be costed. We are seeking to recoup the costs where he is carrying out particular services. We are not seeking to make a profit—the office of the Auditor General is not a profit-making institution—but neither will he provide a service free of charge. The charges involved will include all costs that can appropriately and accurately be identified as relating to a particular function carried out by him.
I recognise that that explanation may be inadequate but it is the best I can give today. Incorporating Amendment No. 19 could result in operational difficulties for the Auditor General by restricting his discretion as to whether a person is connected to local government or the NHS in Wales for the purpose of charging. As I said, we believe that we have met the intention behind Amendment No. 20 in our existing drafting.
6.15 p.m.
Baroness Noakes: Can the Minister elaborate on this point? I believe he said at one stage that the Auditor General should charge full cost but no more. Subsection (2) states that he must charge a person a fee which covers full cost. The same provision appears in subsection (4). But subsection (3) states that he may charge a fee not exceeding the full cost. That implies that "full cost" can mean something other than "not exceeding", given the way in which the Government
have chosen to draft the three different ways in which fees may be charged under Clause 7. Perhaps the Minister will reflect on that.
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