Public Audit (Wales) Bill [Lords]

---

[back to previous text]

Mr. Wiggin: I should like to be satisfied, but the truth remains that if everything that the Minister says is right, why is it necessary to apply it to social landlords or local government? There is an inconsistency here: we either need criminal sanctions or we do not. I would expect a judicial review to be a long and difficult process, so it makes it much easier to have, if necessary, criminal sanctions throughout the Bill, or not.

At present, there is a difference between social landlords and local government, and the amendment. That is the problem that the Government face, and I do not think that the Minister answered that. He must understand why I am concerned about this, and unless he receives any divine inspiration, it will be difficult for him to answer the point. It is important to be consistent in legislation. Many Members have turned up this morning to contribute to our debates, and they would want, just as much as I do, a consistent Bill for the people of Wales, not different rules for different people according to how they are pigeonholed. I am not at all happy with the Minister's reply at this stage.

Mr. Touhig: I am sorry that the hon. Gentleman is not happy— [Interruption.] I am mortified. It will keep me awake for most of the night. I point out to him that in a later debate, which I do not want to anticipate, he will be arguing against criminal sanctions. The Opposition should exercise a degree of consistency as well. In my response to him, I sought to point out a number of provisions that will be in place in order effectively to deal with his problems, short of applying criminal sanctions. I am sure that in our later

Column Number: 26

debate, we shall hear much about the need not to have criminal sanctions in respect of other matters to be considered by the Committee. On that basis, I hope that he is prepared to accept the points that I have made.

Mr. Wiggin: I take the Minister's point about criminal sanctions. I think that I emphasised enough that I do not believe that criminal sanctions are necessary. On that basis, I should like to see them removed for the other classes. We are not going to agree on this, and I want to make progress. It is an important Bill, but this is another of those little wrinkles that need to be ironed out, and we are doing our best to do so.

Mr. Touhig: We have talked today about the Second Reading debate in the other place, which helped to improve the Bill. I point out to the hon. Gentleman that one of his colleagues in the other place regarded criminal sanctions as a blunt instrument. Why should we want to extend them?

Mr. Wiggin: I do not mind if we remove criminal sanctions from the Bill, but the problem is the inconsistency. Either they are good for registered social landlords and local government employees, or they are not. That is the sticking point for the Committee. I have sought to remove them, I have sought to put them back in, and I shall probably seek again to take them out, because I am not going to let the Minister, with such an inconsistency—[Interruption.] The Minister is accusing me, from a sedentary position, of being like a Liberal Democrat. That is something that would give some people a sleepless night; what a very low and dirty insult that must be, and I am deeply hurt.

I was about to withdraw my amendment, but I shall now push it to a vote on the basis of that rotten insult. No, Mr. Griffiths, I am joking, and I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 11 ordered to stand part of the Bill.

10.45 am

Clause 12

Local government bodies in Wales

Mr. Touhig: I beg to move amendment No. 47, in page 11, line 38, leave out paragraph (g) and insert—

'(g) a fire and rescue authority in Wales constituted by a scheme under section 2 of the Fire and Rescue Services Act 2004 or a scheme to which section 4 of that Act applies;'.

The Chairman: With this it will be convenient to discuss Government amendments Nos. 49 and 54.

Mr. Touhig: I shall be brief in speaking to these amendments, which take account of the effect of the Fire and Rescue Services Bill on this Bill. The Fire and Rescue Services Bill will replace fire authorities with fire and rescue authorities. The amendments will change the three relevant references in the Bill in clauses 12 and 46 and schedule 1. The Fire and Rescue

Column Number: 27

Services Bill has completed its passage through the House. Consideration on Report in another place in scheduled for early July and the debate on Third Reading will take place before the end of July. There is a reasonable expectation that it will receive Royal Assent in this parliamentary Session, so I hope that the Committee will allow the amendments to stand.

Amendment agreed to.

Mr. Wiggin: I beg to move amendment No. 3, in clause 12, page 12, line 7, leave out 'or substantially'.

Our discussions on this amendment should be quick because it deals with a subject that we have already covered. I am glad that the Committee has been proceeding with a degree of humour—who says that audit is humourless? Amendment No. 3 would delete from clause 12(3)(b) the words ''or substantially'', which also appear in clause 1(2)(b). The phrase ''substantially funded'' is too vague and has a wide-ranging interpretation. What exactly is meant by

''substantially funded from public money''?

Will the Minister clarify what private sector bodies might be included under paragraph (b) as being substantially funded from public money? I know that he dealt with that question earlier, but this is an important subject and I am sure that he will clarify the situation for anyone with doubts over what ''substantially'' adds to the Bill.

Mr. Touhig: The amendment also deals with the definition of ''public body'' in the context of enabling the National Assembly by order to amend the categories of body defined as local government bodies in Wales to take account of future circumstances. The definition used in clause 12 is consistent with that used in clause 1, which we considered earlier. Again, the amendment could have an unnecessarily restrictive effect.

The purpose of the definition in clause 12, and the rest of the Bill, is to maximise the scrutiny and safeguards in respect of the use of public money. The amendment would undermine that intention. It would mean that a category of body wholly funded by public money could be added to clause 12(1), but a category of body that derived anything less than 100 per cent. of its funding from the public purse could not.

As I emphasised earlier, many public bodies do not receive all their funding from a public source. For example, a body could not be added to clause 12(1) if it raised a proportion of its funding from income derived from the provision of services. In that case, the body could not be added unless it was clearly carrying out public functions. Income derived from fees or leisure-related receipts, such as theatre tickets or leisure centre admissions, would not count as public funding if the amendment was accepted. With that explanation, I hope that the hon. Gentleman will reflect further and withdraw the amendment.

Column Number: 28

Mr. Wiggin: Indeed. I am grateful to the Minister for that reply and, as I hinted earlier, I suspected that that would be the case. Having reflected further, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 12, as amended, ordered to stand part of the Bill.

Clause 13 ordered to stand part of the Bill.

Clause 14

Appointment of auditors

Mr. Wiggin: I beg to move amendment No. 23, in

clause 14, page 12, line 23, leave out subsection (3).

The Chairman: With this it will be convenient to discuss the following amendments: No. 25, in

clause 14, page 12, line 30, leave out subsection (5).

No. 24, in

clause 14, page 12, line 35, leave out subsection (6).

Mr. Wiggin: I hope that the Minister will not again accuse me of belonging to some dodgy party.

Mr. Roger Williams: On a point of order, Mr. Griffiths. I am not sure that that term is appropriate to parliamentary procedure.

The Chairman: We will reflect on that.

Mr. Wiggin: Indeed. I think that I was very kind to the Minister, as were you, Mr. Griffiths.

Amendment No. 23 would delete subsection (3) of clause 14 and enable the Auditor General to audit local authorities, as he does with public bodies under part 1. He should not be prohibited from doing so, as proposed in subsection (3). That is why we seek to delete that subsection.

Why is there special treatment for local authorities, which are also substantially funded by central Government through the Assembly? Why have not all public sector bodies been placed on the same footing in the Bill with respect to the appointment of auditors? If that has happened in NHS auditing, which creates a new model for Wales, why not for local authorities? That is another reason why the Minister cannot use the principle of consistency with England, as the Bill creates an inconsistency in relation to NHS audits. If he claims that there would be a conflict of interest in auditing local authority bodies, surely there is a conflict of interest in the Auditor General auditing NHS bodies too.

On Second Reading, the Minister argued that local authorities are different because they are democratically elected. Can he explain why that is a legitimate argument for ruling out the Auditor General for Wales being able to appoint himself? If the situation requires an even hand, who better to apply that than the Auditor General?

Amendment No. 24, which is probing, would delete subsection (6), under which the Auditor General is required to consult the local authority before appointing an external auditor. The amendment's

Column Number: 29

purpose is to discover why the Auditor General has to consult the local authority in the first place and what would happen if it were to refuse his recommendation.

Amendment No. 25 would delete the power in subsection (5) of joint audit appointments. There are potential problems with joint audits, such as duplication and cost. There is also the risk of omission when things escape audit. Joint audits are not the norm in the private sector for those reasons. Again, provisions have been lifted from the Audit Commission Act 1998, but I believe that they are unnecessary.

 

---

Prepared 29 June 2004