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Lord Davies of Oldham: I am grateful to the noble Baroness for the way in which she has moved the amendment. Amendment No. 34 would remove the Assembly's ability to approve a draft code of practice in respect of the audit of local government bodies in
Wales before its introduction by the Auditor General. The code would incorporate best professional practice with respect to standards, procedures and techniques to be adopted by auditors in the exercise of their functions.The provision enabling the Assembly to approve the code has been incorporated in the Bill as a result of representations made during pre-legislative scrutiny and public consultation on the draft Bill. We believe, therefore, that we have been meeting representations voiced in earlier stages of the drafting of the Bill. The Assembly would not have the power to amend, but Parliament has an interest through providing taxpayers' money. Existing arrangements are that the code of practice requires the approval of Parliament by affirmative resolution. We have no brief in the framework of this legislation to seek to take away what pertains to the existing England and Wales code of practice, subject to affirmative resolution.
The provision is included in the Bill because consultation representations indicated that it should be the basis of scrutiny of the code. It is appropriate that a code of practice discrete to Wales should be approved by the National Assembly, and that Parliament, should it wish, also has the opportunity to scrutinise the code and comment on it.
I am used to the Government being berated for seeking to keep things away from Parliament and Assembly scrutiny—that is not novel—but it is a refreshing experience to be berated today for overdoing both the degree of prior consultation and for subsequently creating the framework for scrutiny. It is on that basis that the Bill is drafted. Fairly significant sums of taxpayers' money fund local government services, and it is right that there should be an opportunity for democratic scrutiny of the way in which local government bodies are audited. It is not as if from time to time this has not been a matter for considerable public controversy and concern.
Amendment No. 36 has the effect of disapplying the extant code of audit practice for local government made under Section 4 of the Audit Commission Act 1998. It would mean that the Auditor General for Wales would have to prepare a Wales-only code of practice, and have it in place by 1 April 2005, with no flexibility for carrying forward and applying the existing code for England and Wales.
One of the duties imposed on an appointed auditor of a local government body is to ensure that he or she complies with any code of audit practice applicable to the accounts being audited. The clause makes it clear that such a code of practice could be a discrete Welsh code introduced under Section 16 of the Public Audit (Wales) Act—should it be enacted. It could also be the existing code of audit practice for local government enforced in relation to both England and Wales under Section 4 of the Audit Commission Act 1998.
It is unnecessary to disapply the existing code, as the amendment seeks to do. That could create real operational difficulties for the Auditor General, particularly in the early days of the new arrangements. If for whatever reason the Auditor General was unable
to prepare a discrete code under what would be Section 16 by the implementation date, it would leave appointed auditors with no framework or instructions. The Committee will recognise that that would be untenable.I recognise what the noble Baroness seeks to achieve but, given the time scales involved, we are engaged in a belt-and-braces operation to make absolutely sure that the profession is properly regulated, irrespective of developments over the next nine months.
Baroness Noakes: I thank the Minister for that reply. I shall deal with his last point first in relation to the two potential codes. I understand the issue about the transitional arrangements, although I would have thought that a year was quite enough for the Auditor General to produce a Welsh code. However, let us assume that he cannot do that by next year and it takes, say, another year. From April 2005, the code of audit practice will mean only a code prepared under Section 4 because there is not one issued under Clause 16.
The way in which the Bill is drafted means, however, that when a code is issued under Clause 16, if there is still a code under Section 4 of the Audit Commission Act—which there will be—the poor old auditors in Wales will have to comply with both. I put it to the Minister that the Bill does not reflect the fact that it is intended that the Auditor General's code should take over. So there could be two codes running in perpetuity. That is not the right position. I hope that the Minister will think about that.
As to consistency with the code of practice in England and Wales and all the scrutiny that goes with it, I remark merely that NHS audits no longer have a code of practice. So, despite all the arguments about the Assembly needing to look at that code of practice, there is not one. However, under the existing arrangements there is reference to a code of practice that applies to NHS audits. So perhaps there has been a little too much stress on how important the code of practice is and how important the scrutiny arrangements are. But that matter need not detain us further, certainly not today. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 17 [General duties of auditors]:
Lord Davies of Oldham: This might be a remarkably convenient moment for the Committee to adjourn until Wednesday at 3.30 p.m.
The Chairman of Committees (Lord Brabazon of Tara): The Committee stands adjourned until Wednesday, 25 February at 3.30 p.m.
- The Committee adjourned at twenty-seven minutes past seven o'clock.
Written Statements
Monday, 23 February 2004
Senior Salaries Review Body
The Lord President of the Council (Baroness Amos): The 26th Report of the Review Body on Senior Salaries, which makes recommendations about the pay of the senior Civil Service, senior military personnel and the judiciary, is being published today. Copies are in the Vote Office and the Library of the House. The Prime Minister is grateful to the chairman and members of the review body for their work.
The main recommendations of the review body for the senior Civil Service are:
an increase from 1 April 2004 of 2 per cent to the pay ranges for each of the senior Civil Service pay bands below Permanent Secretary;
a range of base pay awards from 0 to 9 per cent depending on performance;
a minimum unconsolidated bonus payment of 3 per cent or £2,500, whichever is the higher, for those making the greatest contribution; and
an uplift to the pay range for Permanent Secretaries resulting in a new range of £121,100 to £256,550; the uplift is broadly equivalent to the increase proposed to the pay ranges for the senior Civil Service pay bands below Permanent Secretary.
The main recommendation of the review body for the senior military is an increase from 1 April 2004 of 2.8 per cent in the value of all points on the incremental pay scales for senior military officers.
The main recommendation of the review body for the judiciary is an increase from 1 April 2004 of 2.5 per cent in judicial salaries.
The Government have decided to accept these recommendations. Their cost will be met within existing departmental expenditure limits.
The review body has also recommended that broad salary linkage between its remit groups should be achieved from now on by maintaining general equivalence in salary levels at the top of the structures only. The Government will be considering this.
Pay increases for Members of Parliament and Ministers are linked automatically to the increase in pay bands for the senior Civil Service. Their pay entitlement will therefore increase by 2 per cent from 1 April 2004.
Iraq: Interim Country Assistance Plan
Baroness Amos: My right honourable friend the Secretary of State for International Development has made the following Written Ministerial Statement.
I have placed in the Libraries of both Houses a copy of DfID's Interim Country Assistance Plan for Iraq. It sets out how DfID aims to contribute to the reconstruction of Iraq in the period up to March 2006. I have also decided to make an initial contribution of £65 million (120 million US dollars) to the International Reconstruction Fund Facility for Iraq, managed by the World Bank and United Nations, out of the resources pledged by the United Kingdom for the reconstruction of Iraq at the Madrid donors conference in October 2003 (see my Written Statement of 14 October 2003: Cols. 9–10WS).
Saddam Hussein's tyranny led to a significant increase in poverty and Iraq was isolated from the rest of the world, including its own region, for much of his rule. In many respects Iraq's social and economic indicators now resemble those of a low-income country rather than a major oil producer. But Iraq's abundant human and natural resources offer the potential for a rapid return to relative prosperity, if the right conditions are created in the short and medium term.
Against this background, DfID's objectives for the next two years are to support: rapid, sustainable and equitable economic growth; effective and accountable governance; and social and political cohesion and stability.
To work towards these goals DfID will focus on three levels:
Internationally: by supporting the United Nations and World Bank International Reconstruction Fund Facility for Iraq (IRFFI), assisting the Ministry of Planning and Development Co-operation, and continuing dialogue with other donors on the coordination and effectiveness of assistance to Iraq.
Nationally: by funding projects which benefit the poor, promote an inclusive political process and economic reform, and strengthen public administration. Examples include: helping the growth of small and medium-sized businesses; setting up a fund to support the participation of citizens, parties and interest groups in the political process; and technical assistance to Iraq's public administration system.
In southern Iraq: by funding projects to reduce poverty and helping to restore the area's administrative and political links with Baghdad so that it can benefit from Iraq's national development efforts.
At the Madrid donors conference, the United Kingdom pledged a total of £544 million for the period from April 2003 to March 2006, a significant proportion of which would be channelled through the International Reconstruction Fund Facility for Iraq (IRFFI). The allocation of our initial contribution between the UN and the World Bank Trust Funds will be decided shortly. Any further DfID contributions to the funds will be considered in the light of the effectiveness of their operations and their need for additional funding.
A total of over 32 billion dollars was pledged to Iraq at the Madrid conference. These pledges, together with a substantial reduction in Iraq's debt which should be negotiated this year, will provide a sound basis for the country's initial reconstruction. If the right steps are taken now, and the political situation in the country is stabilised, much of Iraq's longer-term investment needs should be met by commercial loans, foreign direct investment and its own resources. Iraq's human capital, and its oil reserves of about 2,500 billion dollars at current prices, should enable it to meet its future needs without significant external grant assistance.
The country assistance plan is also available on the DfID website: www.dfid.gov.uk.
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