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Lord Elis-Thomas: My Lords, to be even handed, as I supported the Government previously, I now take the opportunity to support the noble Baroness who leads for the Opposition on this matter. As she has emphasised, all who have been involved in the scrutiny of the Bill have expressed concern about this clause, its impact and the powers within it. I should like to add one other comment on the government amendments. This seems to me a very strange way to proceed in the making of primary legislation in relation to Wales.

I obviously accept that there has to be consistency in freedom of information legislation—I am not arguing on that issue—but it is not a satisfactory way to proceed where, on the one hand, we are creating a new public audit regime for Wales but, on the other hand, we are not able to establish a coherent primary legislative base on which to do so. Of course, I would say this, would I not, after the publication of the report of the Richard Commission yesterday?

Lord Thomas of Gresford: My Lords, the Government are still following English precedent whereas we were hoping that they would create something new in the Bill. I pay tribute to the Minister and to his colleague, Mr Don Touhig, for seeing us and for discussing our concerns. I hope that the noble Baroness, Lady Noakes, and myself have been able to emphasise that the concerns go much wider than ourselves and include the National Assembly and all those who have scrutinised the Bill.

At the moment, fitting for the season, I see some flowering, some blossoming, but I do not see the fruit. Before we leave this topic we ought to have a little more of the fruit in view before we decide what we should do.

Lord Evans of Temple Guiting: My Lords, I thank the House for that short, interesting debate. In an otherwise good-natured discussion, and for the first time, the noble Baroness, Lady Noakes, made a point that was unfair. She said that everyone dislikes the clause with the exception of the Government. I had hoped that, following her meetings with Don Touhig and myself, as well as with others, she would know that the Government are worried about the clause and wish to solve the problem. As I described, the only way to solve it is to place before both Houses towards the end of the year an order that gives us, we hope, the result that I suspect that we all want. However, it is perfectly fair for the noble Baroness, Lady Noakes, to say, "You can't give me an absolute guarantee that what will be in the order will be what we want". As we are all heading in the same direction and all trying to find the "fruit" that the noble Lord, Lord Thomas of Gresford, mentioned, it is perhaps best for us to continue to think about the problem and come back to it at Third Reading. I cannot guarantee that we will be able to give a different response, because we are talking about the drafting of an order. It is not surprising that, on the first day of April, work has

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not started on an order that is due to be tabled at the latest by the end of December. However, we understand the problem and we will return to it at a later stage, but, as I said, I cannot give any guarantees that we will be able to go any further than I have today.

On Question, amendment agreed to.

Baroness Noakes had given notice of her intention to move Amendment No. 29:

Leave out Clause 54.

The noble Baroness said: My Lords, I shall speak briefly to Amendment No. 29, which would delete Clause 54, in light of the generous remarks of the Minister. He said that he would continue dialogue with the noble Lord, Lord Thomas of Gresford, and me between now and Third Reading. I hope that he is in no doubt that we are very concerned about the clause. We are concerned that we will be left with an English model that we do not like. We are trying to create a model for Wales. That is why we shall try hard to make some progress in finding out what the Government's intentions really are for Clause 54. That is also true for Section 49 if the Government wish to proceed with it, but our concern is Clause 54. I intended no disrespect to the Minister and to Mr Touhig, but it is true that the Government as a whole are clinging on to Clause 54. However, I recognise the considerable effort that the Minister and his colleagues have made.

[Amendment No. 29 not moved.]

Clause 57 [Orders and regulations]:

Lord Evans of Temple Guiting moved Amendments Nos. 30 and 31:

Page 37, line 30, leave out "The power" and insert "Any power conferred on the Assembly or the Secretary of State"

Page 37, line 32, after "Assembly" insert "or the Secretary of State"

On Question, amendments agreed to.

Schedule 1 [Best value audit and inspections]:

Lord Evans of Temple Guiting moved Amendment No. 32:

Page 45, leave out lines 30 to 32 and insert—

"(1) An auditor appointed by the Audit Commission who is carrying out an audit of an authority's performance plan under section 7 shall have regard to any provisions of a code of practice under section 8 which—
(a) are applicable to the audit, and
(b) are in force.
(2) An auditor appointed by the Auditor General for Wales who is carrying out an audit of an authority's performance plan under section 7 shall have regard to any provisions of a code of practice under section 8A which—
(a) are applicable to the audit, and
(b) are in force.

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(3) Subsection (4) applies at any time before there are provisions of a code of practice under section 8A to which an auditor appointed by the Auditor General for Wales is required under subsection (2) to have regard in carrying out an audit of an authority's performance plan under section 7.
(4) The auditor shall have regard to any provisions of a code of practice under section 8 which—
(a) are applicable to an audit of a performance plan published by an authority of a corresponding description to the authority, and
(b) are in force."

On Question, amendment agreed to.

Schedule 2 [Minor and consequential amendments]:

Baroness Noakes moved Amendment No. 33:

Page 55, line 32, at end insert ", or

( ) the functions of the Auditor General for Wales under sections 41 and 42 of the Public Audit (Wales) Act 2004"

The noble Baroness said: My Lords, I have the privilege of moving the final amendment on Report. In Grand Committee, I tabled both the equivalent of this amendment and one that would have given the Auditor General much wider powers to extend his examinations into England. I hope that the Minister will be pleased that I have chosen to take forward only the more modest of the two amendments on Report.

Amendment No. 33 would amend paragraph 34 of Schedule 2, which, in turn, amends the Audit Commission Act 1998. Specifically, it would confer an extra duty of co-operation on the Audit Commission. It would have to co-operate with the Auditor General in his value-for-money studies of Welsh local authorities under Clauses 41 and 42.

I explained in Grand Committee that the Auditor General will be the poor relation when it comes to local authority value-for-money audits. He has no right to examine English authorities, in contrast to the Audit Commission's right to examine Welsh authorities. Nor has the Audit Commission any duty to co-operate with him in respect of his functions in Wales. He can of course have access to data that the Audit Commission has published, but he has no right to unpublished data and the Audit Commission needs to make no effort to assist the Auditor General in his Welsh value-for-money studies.

I am concerned that that will weaken value-for-money studies in Wales. There may well be many issues that are important in Wales, but that are low on the priority list in England. If the Government will not give the Auditor General powers to investigate matters that go wider than Wales, they must surely ensure that he has sufficient access to data and other forms of co-operation that are relevant to his Welsh studies. The most natural source of that co-operation is of course the Audit Commission. I hope that the Government will be prepared to strengthen the regime for the Auditor General for Wales. I beg to move.

Lord Evans of Temple Guiting: My Lords, Amendment No. 33, which affects the Audit Commission Act 1998, would require the Audit Commission to co-operate with the Auditor General, where appropriate, for the efficient and effective discharge of the latter's functions in undertaking studies under Clauses 41 and 42 of the Bill.

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As drafted, the Bill places a reciprocal duty to co-operate on both the Auditor General and the commission for the efficient and effective discharge of their own—I emphasise that it will be their own—functions in respect of those kinds of studies. The requirement to co-operate is placed on the initiator of the study. Our intention is to minimise the burden on the bodies subject to the study and to rationalise the efforts of the commission and the Auditor General. The duties are intended to ensure that, in proposing a study, each would consult and co-operate with the other on timing and exchange of relevant information, as well as explore the potential for joint working. That seems to be common sense.

The amendment would extend the duty placed on the Audit Commission. It would be obliged to co-operate with the Auditor General in studies initiated by him. It would not, however, extend a reciprocal duty to the Auditor General in respect of the commission's cross-border studies.

The Government have not sought to impose a duty on the Audit Commission or the Auditor General to co-operate with each other's studies. The firm expectation of the Government is that regulatory and audit bodies such as the commission and the Auditor General will collaborate closely on work of cross-border interest. The Bill encourages them to do so and pre-legislative scrutiny of the draft Bill demonstrated a clear willingness of both parties to do so. A duty could create operational difficulties in areas such as forward work planning. Ultimately, it may have a restrictive effect.

The Government agree, however, that there could be a benefit in a mutual duty, but it would need to be drawn more tightly than that proposed by the noble Baroness, Lady Noakes. For instance, a duty to provide relevant information to the other body for comparative use could be beneficial. The Government will give further consideration to that in discussion with the Auditor General and the Audit Commission. It will also look again at other co-operation duties in the Bill in the same light, such as those linking the Auditor General and the Commission for Healthcare Audit and Inspection. After that explanation, I hope that the noble Baroness will withdraw her amendment.

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