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Baroness Noakes: My Lords, I shall have to accept that. The Minister will therefore see that I am still a trifle concerned about the Government's response to my Amendment No. 13. For today, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Evans of Temple Guiting moved Amendment No. 14:
- Page 12, line 33, leave out "An individual" and insert "A person"
The noble Lord said: My Lords, in moving Amendment No. 14, I shall speak also to Amendments Nos. 15, 18 and 19, which are a direct consequence of the Government's acceptance of Amendments Nos. 16 and 17, which were tabled by the noble Lord, Lord Roberts, and the noble Baroness, Lady Noakes, after Grand Committee. The deletion of paragraphs (c) and (d) of Clause 14(4) has the practical effect of making the eligibility requirements for individuals to be appointed as auditors the same as those for a firm. Government Amendments Nos. 14 and 15 replace the reference to "individual" in subsection (4) with a reference to "person"; a word that covers both individuals and firms. As a result the separate definition of eligibility for the appointment of firms in subsection (5) is not required, nor is the definition of "firm" in subsection (10). Government Amendments Nos. 18 and 19 seek to address that. The amendments simplify further Clause 14.
On Question, amendment agreed to.
Lord Evans of Temple Guiting moved Amendment No. 15:
- Page 12, line 34, leave out "individual" and insert "person"
On Question, amendment agreed to.
Baroness Noakes moved Amendments Nos. 16 and 17:
- Page 12, line 40, leave out paragraph (c).
- Page 13, line 1, leave out paragraph (d).
On Question, amendments agreed to.
Lord Evans of Temple Guiting moved Amendments Nos. 18 and 19:
- Page 13, line 4, leave out subsection (5).
- Page 13, leave out line 29.
On Question, amendments agreed to.
Clause 17 [General duties of auditors]:
The Deputy Speaker (Viscount Allenby of Megiddo): My Lords, I have to advise the House that if Amendment No. 20 is agreed to, under the pre-emption rules, I shall not be able to call Amendment No. 21.
Lord Evans of Temple Guiting moved Amendment No. 20:
- Page 14, line 41, leave out subsections (3) and (4) and insert—
The noble Lord said: My Lords, in moving Amendment No. 20, I shall speak also to Amendment No. 32. In response to the helpful comments made by the noble Baroness, Lady Noakes, in Grand Committee, the Government have given further consideration to Clause 17. We have identified the need for an amendment to clarify that the Audit Commission's code of practice, issued under Section 4 of the Audit Commission Act 1998, will continue to apply to Wales in the transitional period until the Auditor General for Wales issues his own code under Clause 16. That was the intention of the clause, but parliamentary counsel has confirmed that it would benefit from greater clarity on that point. Amendment No. 20 achieves that.
Amendment No. 32 in respect of Schedule 1 provides a comparable clarification in relation to the code of practice for the audit of best value performance plans under the Local Government Act 1999. Section 8 of the Local Government Act 1999 requires the Audit Commission to prepare such a code. Section 8A, to be inserted under Schedule 1 of the Bill, enables the Auditor General to prepare a code of practice for Wales. Amendment No. 32 provides that, until the Auditor General does so, auditors of best value authorities in Wales must still have regard to the Audit Commission code. I beg to move.
Baroness Noakes: My Lords, I am grateful to the Minister and his officials for considering this matter. When I tabled my modest probing amendments in Grand Committee, little did I know that the issue eventually would be dealt with by six new subsections and 34 lines of amendment. But I am glad, and I am sure that the Bill is much improved.
On Question, amendment agreed to.
Clause 18 [Auditors' rights to documents and information]:
Lord Evans of Temple Guiting moved Amendment No. 22:
On Question, amendment agreed to.
Clause 19 [Auditors' rights to documents and information: offences]:
Lord Evans of Temple Guiting moved Amendments Nos. 23 and 24:
On Question, amendments agreed to.
Clause 52 [Rights of the Auditor General for Wales to documents and information]:
Lord Evans of Temple Guiting moved Amendment No. 25:
On Question, amendment agreed to.
Clause 53 [Rights of Auditor General for Wales to documents and information: offences]:
Lord Evans of Temple Guiting moved Amendments Nos. 26 and 27:
On Question, amendments agreed to.
Clause 54 [Restriction on disclosure of information]:
Lord Evans of Temple Guiting moved Amendment No. 28:
The noble Lord said: My Lords, government Amendment No. 28 has been tabled in fulfilment of the commitment given by my noble friend Lord Davies of Oldham in Grand Committee. Noble Lords will also know that the Government laid a ministerial Written Statement in the Libraries of this House and another place on 24 March setting out their intentions with regard to Section 49 of the Audit Commission Act—the current disclosure provision that applies to England and Wales—and Clause 54.
Government Amendment No. 28 incorporates an order-making power in the clause which enables the Government to repeal or relax the restriction on the disclosure of information in Clause 54 in the light of the outcome of the DCA review. The amendment makes clear that the order-making power can be used only for the purpose of repeal or relaxation: it cannot be used to impose any further restriction. An order could not be made unless a draft has been laid before and approved by a resolution of each House of Parliament.
The Statement tabled on 24 March explains that Section 49 is already within the remit of the DCA Review. The DCA currently plans to publish a final report on its review in the autumn. It also intends to bring forward the first order to be made under Section 75 of the Freedom of Information Act implementing its findings before the end of December this year. Following preliminary consideration and consultation, the Government's preferred treatment for Section 49 is to amend it so that it is consistent with the freedom of information legislation, which has an overall presumption in favour of disclosure. The Government will include the proposed amendment to Section 49 in the first order.
When Section 49 is amended, the Government amendment to Clause 54 will allow the relaxation of the restriction on disclosure to apply to Wales as well as to England. When this Bill is enacted, the Auditor General for Wales's action will be governed by Clause 54 as amended. The noble Baroness, Lady Noakes, and the noble Lord, Lord Thomas of Gresford, were concerned to know what exceptions to disclosure will be included in the amended Section 49 of the Audit Commission Act. The detailed work on amending Section 49 has not started yet. However, the Auditor General for Wales's office has indicated that he may envisage exceptions to the presumption of disclosure in two areas first,
Section 49 has been used very rarely in the past and the Auditor General for Wales has no expectation that he would increase the frequency of its usage. Nor can he, at the moment, envisage needing to apply it in any situations other than the two I have explained.
Of course the Government cannot, and would not wish to, fetter the discretion of the Auditor General for Wales to act as he might consider appropriate and necessary, but we understand that he would take account of the changes being proposed to Section 49 of the Audit Commission Act and the consequent changes intended for Clause 54 of the Bill, as amended by government Amendment No. 28, in the extremely unlikely event that a situation arose in which he might have to consider prosecuting under the powers granted by the clause.
If the Auditor General for Wales or an appointed auditor considers that it is necessary to his or her functions for him or her to publish an audit report, they should have an unfettered ability to do so. It is not the intent, nor could it be the effect, that Clause 54, as amended, could be used in any way to prevent this from occurring. This is fully in line with the principles of public audit which the new Wales Audit Office being created by the Bill will seek to uphold. I should like to affirm that an auditor of a local government body will have the power to issue a public interest report under the Bill, and Clause 54 does not make the issue of such a report conditional on the consent of the local government body concerned.
The Government have listened very carefully to the many concerns expressed with regard to Clause 54. They have done, and will do, their utmost to address and to take account of those concerns properly, in a consistent and responsible way, and in the light of the wider work that they are currently undertaking to introduce the freedom of information legislation.
Government Amendments Nos. 30 and 31 to Clause 57 are technical amendments and are consequential on the amendment to Clause 54. I beg to move.
Baroness Noakes: My Lords, the Minister is aware, I know, that this is the most contentious area of the Bill. I thank him and his honourable friend in another place, Mr Don Touhig, for the efforts that they have made to move the issue forward since Grand Committee.
The Minister has proposed an amendment to Clause 54 which would allow, but not require, the Secretary of State to amend Clause 54, but only if Section 49 of the Audit Commission Act is amended, and then only in the same way. The question that we
The Minister will be aware that the deletion of Clause 54 is the aim of Amendment No. 29, which is to be considered after this group of amendments. It would be helpful if the Minister would regard this debate as covering both groups of amendments.
Let me restate our position, which is line with all who have looked at the Bill, other than the Government. We believe that applying criminal sanctions in the wide-ranging prohibitions on the disclosure of information in Clause 54 is wrong in principle. The Assembly committee which considered the draft Bill came to that conclusion, as did the Welsh Affairs Committee of another place, and the Auditor General has not requested these provisions.
We were pleased to see the Minister's written statement on 24 March to the effect that the Government recognised the concerns about Clause 54. That was a significant improvement on their position of denial when they responded in December of last year to the report of the Welsh Affairs Committee of another place. The solution proposed is to amend Section 49 of the Audit Commission Act in the first of the Freedom of Information Act orders—which is a helpful indication of timing—and then to proceed to amend the Act which will result from the Bill.
We are still being invited to take a great deal on trust. I accept that the Government intend to amend the Audit Commission Act and then what will become the Welsh audit Act, but we do not know in what ways these Acts will be amended. We are in the unfortunate position in relation to the Bill of being apparently dependent on the decisions of those who guard the interests of the Audit Commission. I believe that the Audit Commission has in the past expressed a wish to keep Section 49, or at least as much of it as possible.
The Minister outlined what the Auditor General for Wales would expect to see in an amended Clause 54 but, as I have just analysed, it is not the Auditor General for Wales who will be in the driving seat on this; as I understand it, the Office of the Deputy Prime Minister will consider what amendments should be brought forward in respect of Clause 49. I understood the Minister to say that it has not started on that process.
So it is one thing to say that the sections will be amended, but the nature of the amendments is crucial. We have a real concern that we are being invited to leave an unacceptable clause in the Bill against a promise of unspecified amendments in the future. It will be left on the statute book against a promise that the Auditor General will take account of potential changes—none of which we know—in deciding whether or not to use that power until such time as an amendment is brought forward by order under the Freedom of Information Act.
I hope the Minister understands that we are still struggling with whether or not the substance of what the Government are putting forward will turn out to be adequate to meet the real concerns that exist among a
"(3) An auditor must comply with any provisions of a code of audit practice issued under section 16 which—
(a) are applicable to the audit of the accounts being audited, and
(b) are in force.
(4) At any time before there are provisions of a code of audit practice with which an auditor is required to comply under subsection (3), the auditor must comply with any provisions of a code of audit practice issued under section 4 of the Audit Commission Act 1998 (c. 18) which—
(a) are applicable to the audit under that Act of the accounts of bodies of a corresponding description to the body, and
(b) are in force."
Page 15, line 22, leave out subsections (4) and (5) and insert—
"(4) An auditor may require a person whom he thinks has information of the kind mentioned in subsection (4A)—
(a) to give him any assistance, information and explanation which the auditor thinks necessary for the purposes of his functions under this Chapter;
(b) to attend before him in person to—
(i) give the assistance, information or explanation, or
(ii) produce any document which is held or controlled by the person and to which the right conferred by subsection (1) applies.
(4A) The information is information which relates to—
(a) a local government body in Wales in relation to which the auditor has functions under this Chapter;
(b) a document to which the right conferred by subsection (1) applies;
(c) a person who holds or controls such a document.".
Page 15, line 45, leave out "or (5)"
Page 16, line 12, leave out subsection (5) and insert—
"(5) An appropriate person is a person who controlled the document referred to in section 18(4A) at the time the requirement was imposed."
Page 34, line 41, leave out subsections (4) and (5) and insert—
"(4) The Auditor General for Wales may require a person whom he thinks has information of the kind mentioned in subsection (4A)—
(a) to give him any assistance, information and explanation which the Auditor General for Wales thinks necessary for the purposes of his functions under this Part;
(b) to attend before him in person to—
(i) give the assistance, information or explanation, or
(ii) produce any document which is held or controlled by the person and to which the right conferred by subsection (1) applies.
(4A) The information is information which relates to—
(a) a local government body in Wales;
(b) a document to which the right conferred by subsection (1) applies;
(c) a person who holds or controls such a document."
Page 35, line 32, leave out "or (5)"
Page 35, line 44, leave out subsection (5) and insert—
"(5) An appropriate person is a person who controlled the document referred to in section 52(4A) at the time the requirement was imposed."
Page 36, line 47, at end insert—
"(6) The Secretary of State may by order made by statutory instrument amend or repeal the preceding provisions of this section.
(7) An order under subsection (6) may be made only if—
(a) section 49 of the Audit Commission Act 1998 (c. 18) (restriction on disclosure of information) has been amended or repealed in the same Session as that in which this Act is passed or in any later Session;
(b) the Secretary of State thinks that the amendments or repeals to be made by the order under subsection (6) will (subject to paragraph (c)) have the same effect as the amendments to or repeal of section 49 of that Act;
(c) the order would not have the effect of imposing any further restriction on the disclosure of information under this section.
(8) An order under subsection (6) may not be made unless a draft of the order has been laid before, and approved by a resolution of, each House of Parliament."
1.45 p.m.
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