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Lord Evans of Temple Guiting: My Lords, Amendment No. 1 would give the Auditor General discretion to undertake economy, efficiency and effectiveness studies—known as 3Es studies—in respect of registered social landlords under Clause 3 of the Bill. The Auditor General could undertake the registered social landlord studies if at some future stage the Assembly were to transfer to him, or ask him to exercise on its behalf under Clause 1, supervisory functions in respect of them.

Clause 3 as currently drafted excludes registered social landlords. There is a more appropriate power for undertaking comparative studies on social landlords in Clause 5. Clause 5 enables the National Assembly and the Auditor General to agree on a programme or programmes of study designed to enable the former to make recommendations for improving the economy, efficiency and effectiveness in the sector.

There are sound reasons why agreement between the National Assembly and the Auditor General is the most effective way to progress 3Es studies in this sector. There are more than 100 registered social landlords in Wales. The Assembly provides more than 50 million in social housing grants a year to the sector. At any one time, however, the majority of these organisations—around 75 per cent—do not receive funding from the National Assembly in respect of new building development. They meet their

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administration costs, including maintenance costs, from rental income and other sources independently of the Assembly.

The differing, and potentially changing, financial relationship of registered social landlords in relation to the Assembly should be taken into account in planning participation in such studies. The Assembly has statutory responsibilities which mirror those of the Housing Corporation in England to fund and regulate the registered social landlord sector in Wales, and in particular to ensure that registered social landlords in Wales are financially viable, properly governed and properly managed.

The exercise of those responsibilities includes the determination of standards of performance, the issue of guidance on the management of housing, the approval of the constitutions and rules of the registered social landlords, and powers of intervention to ensure that regulatory requirements are complied with.

The work can inform in a positive way the direction and emphasis of the programme of studies which can be agreed between the Auditor General and the Assembly. The programme of studies agreed would complement and inform the Assembly's statutory responsibilities. Agreement would give focus and direction to the studies in a sector where the financial relationship between individual bodies and the Assembly differ.

The noble Baroness, Lady Noakes, raised the question of whether the Assembly has a veto over the Auditor General. What would happen if there was a disagreement, or no agreement? This question is predicated on the presumption that the Assembly would in some way be resistant to the Auditor General's ability to undertake such studies. The contrary is in fact the case. Such study programmes are already agreed with the Audit Commission under the Audit Commission Act, and they are valued by the Assembly as a means of informing policy. Clause 5 makes provision for the results of such a study and the Auditor General's recommendations to be laid before the Assembly. In the extremely unlikely event that agreement could not be reached between the Auditor General and the Assembly, the Auditor General would be free to report this fact and the reasons for it in his annual report, which is laid before the Assembly and published. I hope that in the light of what I have said, the noble Baroness, Lady Noakes, will withdraw her amendment.

Baroness Noakes: My Lords, I thank the Minister for that comprehensive reply and for explaining the financial context of registered social landlords and the relative financial contribution made by the Assembly. My main concern was to ensure that the Auditor General was not fettered. I do not accuse the current Assembly of wishing to withhold consent for such studies at the moment, but supposing they became politically inconvenient for some reason, we would have to rely on the Auditor General being able to report ex post facto. That is, I suppose, some form of backstop ability to air the issue. On that basis, I am content with what the Minister said. I beg leave to withdraw the amendment.

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Amendment, by leave, withdrawn.

Clause 4 [Studies at request of educational bodies]:

Lord Evans of Temple Guiting moved Amendment No. 2:

    Page 5, leave out lines 22 and 23.

The noble Lord said: My Lords, in moving this amendment, I shall speak also to Amendment No. 3, which stands in my name. Amendment No. 2 is the first of 19 government amendments tabled as a direct result of the discussions in Committee. I thank the noble Baroness, Lady Noakes, and the noble Lord, Lord Thomas of Gresford, for airing these issues in Committee, which have now resulted in amendments which, in the Government's view, will improve the Bill.

The effect of Amendments Nos. 2 and 3 is that the National Council for Education and Training for Wales and the Higher Education Funding Council for Wales will not be able under Clause 4 to ask the Auditor General for Wales to undertake an economy, efficiency and effectiveness study into themselves. The Government are of the view that their inclusion in Clause 4 is not needed. The National Council for Education and Training for Wales and the Higher Education Funding Council for Wales are both Assembly-sponsored public bodies. The Auditor General has statutory responsibility for their audit. He is already able to undertake economy, efficiency and effectiveness examinations into the way they have used their resources under Section 145 of the Government of Wales Act. In addition, the proposed new Section 145A of the Government of Wales Act—in Clause 3 of the Bill—will enable the Auditor General to undertake forward-looking economy, efficiency and effectiveness studies in respect of them. I beg to move.

Baroness Noakes: My Lords, I recognise that the Government have tabled many amendments in response to our discussions in Grand Committee, for which I thank the Minister.

On Question, amendment agreed to.

Lord Evans of Temple Guiting moved Amendment No. 3:

    Page 5, leave out lines 28 and 29.

On Question, amendment agreed to.

12.45 p.m.

Clause 5 [Studies relating to registered social landlords]:

Baroness Noakes moved Amendment No. 4:

    Page 7, leave out lines 1 to 5.

The noble Baroness said: My Lords, in moving the amendment, I shall speak also to the other amendments in this group. At one level, these amendments concern the sanctions that are attached to non-compliance with the Auditor General's access rights, but on another level these amendments highlight inconsistencies that still permeate the Bill.

Some of these amendments are alternatives. Amendment No. 4 takes out the criminal sanctions that attach to non-compliance with access rights for

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registered social landlords. The criminal law is a blunt instrument for a public audit regime, and the amendment is along the right lines. I am reinforced in this by the absence of criminal sanctions attaching to Clause 11, which is the substantive clause dealing with the Auditor General's access rights for bodies other than local authorities within the new arrangement for public audit in Wales.

The other side of Amendment No. 4 is Amendment No. 12, which would create criminal sanctions for a breach of the Clause 11 access rights, so that if the Government stick to their guns in respect of Clause 5, there will at least be consistency across the Bill. In Grand Committee, the Minister told us that criminal sanctions were not appropriate to bodies that were covered by the accounting officer conventions. I hope that the Minister does not repeat that argument, because I do not think that it is valid. First, Clause 11 already goes beyond the bodies that are covered by the accounting officer conventions. That is the effect of paragraphs (b) and (c) in new Section 95(1) introduced by Clause 11. Secondly, the Audit Commission audit regime for the NHS, which currently applies in Wales and will continue to apply in England, has criminal sanctions attached to access rights, despite the fact that accounting officer conventions apply throughout the NHS.

In Grand Committee, the Minister also told us that Clause 11 was all right, because the Auditor General could use judicial review or apply for a mandatory injunction. Why is that good enough for Clause 11, but not good enough for Clause 5? Since Clause 11 applies to many public audits, including that of registered social landlords by virtue of paragraph (b), can the Minister explain the purpose of the Clause 5 provisions?

It is also the case that where the Bill includes criminal sanctions, it has different versions in different parts of the Bill. Clause 5 has one version, while extended versions of the sanctions exist in Clause 18 and Clause 53, which deal with local authority access rights. So, Amendments Nos. 5 and 6 in this group largely replicate the Clause 18 and Clause 53 provisions, again to try to achieve consistency.

In Grand Committee, the Minister made much of the Bill's consistency with England. He elevated this to a grand principle underlying the Bill, so as to justify the patchwork nature of the Bill. The audit regime in England is not exactly a shining light of consistency. The way in which it has grown up, with different bodies and sporadic legislative reform, has resulted in something that is not coherent. This principle of keeping Wales the same as England is just another way of saying that the Government are ignoring an opportunity to create a coherent public audit regime for Wales. We think that is the more important principle.

In Grand Committee, the Minister also talked about consistency between criminal law in England and Wales. That is an irrelevance. The Assembly already has power to create criminal sanctions in different circumstances by order and, under Clause 39, this Bill creates another such opportunity.

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The amendments offer the Government the chance to repent of their apparent determination to create an illogical public audit regime in Wales. I hope that the Government will seize the opportunity. I beg to move.

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