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Mr. Wiggin: I am grateful to the Minister for what he said, especially about removing imprisonment from the list of sanctions. I am aware that he is the whistleblowers' friend from his history. As I understand it, he said that his intention to drop the imprisonment sanction may not be possible to carry out under a section 75 order. I accept that the Minister has set himself quite a challenge, but he has the opportunity before Third Reading to ensure that the Committee knows whether it will be possible for him to do what he said he would. Therefore it is not appropriate for us to press the amendment to a Division. What the Government have done is extremely constructive; I recognise that they also want transparency and clarity in the Bill. I am grateful that we have made some progress today. The idea that the Liberal Democrats were quite so compliant came from the following remark by the hon. Member for Montgomeryshire (Lembit Öpik) on Second Reading:
''Perhaps I am simply an optimist or willing to trust the Minister because he has an honest face''.——[Official Report, 17 June 2004; Vol. 422, c. 943.]
We should trust the Minister because he repeatedly said that he would do something, rather than because of the honesty of his face. We should wait and see whether it can be done. It would be of great comfort to the Committee if the Minister could write to us about the section 75 orders.
Mr. Touhig: If it helps the hon. Gentleman and other hon. Members, I said on Second Reading that if I had any further information when we reached consideration in Committee, I would reveal it. I have kept that promise: I have been able to reveal that the Government are considering the removal of the prison sanction for any breach of the clause. By Report, or Third Reading, if I have further information on how we will take this forward—with or without a section 75 order—I will ensure that hon. Members are made aware of it.
Mr. Wiggin: I am grateful to the Minister for his reply, and do not want him to row back from what he has already said today. It is fair to say that there is a question mark over how the Government will proceed. It is important, while we scrutinise the Bill, that we do our best to nail down what will happen. I know that the Minister will provide us with that information if he can, but I want to put the marker down that we will need that information if we are to support the Bill. Otherwise, we will be faced with the extraordinary situation in which, for a period of time, the rules in Wales will be different from the way that the Government want them to be. When the amendments to the other pieces of legislation then go through—
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again, the Committee has not seen how those amendments will be worded—there will be a complete change in the nature of the Bill. It is therefore important that we get as much information as we can. I know that the Minister is doing everything that he can, and I am grateful for that. I hope that he will continue to keep us fully informed on the mechanics of the matter.
Mr. Touhig: It is not intended that the Bill—assuming that Parliament approves it—should be enacted until 2005. I am not being complacent about the amount of time left, but we hope to have sufficient time to introduce the amendments that I suggested.
Question put and agreed to.
Clause 54, as amended, ordered to stand part of the Bill.
Clause 55 ordered to stand part of the Bill.
Clause 56
Publication of information by Auditor General for Wales
Mr. Touhig: I beg to move amendment No. 52, in page 36, line 42, leave out '(1)(b), (c) or (d)' and insert '(1)(a), (b) or (c)'.
The amendment corrects a typographical error in clause 56(2)—[Interruption.] Unfortunately we cannot get the proofreaders these days. The subsection should read:
''The information that may be published under subsection (1)(a), (b) or (c)''
and not ''(1)(b), (c) or (d)'', as currently drafted. The exclusion should relate only to information about public interest reports, and not to information about contraventions of the accounts and audit regulations to be made under clause 39. It is consistent with the provisions of sections 51 and 12 of the Audit Commission Act 1998. I commend the amendment to the Committee.
Amendment agreed to.
Clause 56, as amended, ordered to stand part of the Bill.
Clauses 57 to 59 ordered to stand part of the Bill.
Clause 60
Meaning of ''Welsh NHS body''
Question proposed, That the clause stand part of the Bill.
The Chairman: With this it will be convenient to discuss the following:
New clause 2—Prevention of unlawful expenditure—
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(b) is about to take, or has taken, a course of action which, if pursued to a conclusion, would be unlawful and likely to cause a loss or deficiency,
he shall refer the matter forthwith to the Assembly.'.
Mr. Wiggin: The new clause concerns the audit regime for NHS bodies in Wales. We welcome the fact that the Government have not simply copied the existing arrangements for health bodies, as they have done for most of the Bill, but have instead given the Auditor General fuller auditing responsibilities in the audit regime. However, some useful existing provisions have been excluded.
Under the existing legislation the health body auditor is allowed to act if he believes that unlawful expenditure is about to be incurred and needs to be looked into. The auditor can carry out an extraordinary audit, and the Secretary of State can call for one. Those provisions prevent problems from getting out of control. However, there are no such useful provisions in the Bill with regard to health bodies. That sets up differences between not only England and Wales but between health bodies and local authority bodies in Wales. The amendment is a version of section 19 of the Audit Commission Act 1998, which would restore the current position for health bodies.
3.45 pm
Mr. Touhig: New clause 2 would require the Auditor General to refer any matter relating to unlawful or potentially unlawful expenditure on the part of a NHS body in Wales to the National Assembly. The Government believe that it is unnecessary for the following reasons. Clause 60 gives the Auditor General statutory responsibility for the financial audit of Welsh NHS bodies. His statutory responsibility would be the same as it is now for the National Assembly and its sponsored bodies. The audit process that applies would also be the same.
An item of public expenditure would result in a qualification to an NHS body's accounts as it does now to other bodies for which the Auditor General has statutory audit responsibilities. He would publish a report in respect of the qualification and lay the report before the National Assembly.
In accordance with Standing Order 12.5, the Audit Committee of the National Assembly would meet to consider the circumstances surrounding the qualification. In doing so, it would take evidence from relevant officials with financial accountability responsibilities. The Committee would issue a report with its conclusions and recommendations, to which the Assembly Administration, in liaison with the NHS body concerned, would be required to respond within a set time scale, currently 30 working days.
Any potentially unlawful expenditure or unlawful decision would, as a matter of course, be brought to the attention of the NHS body's accountable officer and the National Assembly accounting officer for the NHS in Wales. With that explanation, the hon. Gentleman may feel that his new clause is not needed.
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Mr. Wiggin: I am grateful to the Minister for his reply. If he is satisfied that an order to prevent illegal expenditure is not necessary, I hope that he is right. I do not wish to press the matter any further, but it is an important point to make during the drafting of the Bill. I feel that I have fulfilled my role in drawing it to the Committee's attention.
Question put and agreed to.
Clause 60 ordered to stand part of the Bill.
Clauses 61 to 66 ordered to stand part of the Bill.
Schedule 2
Minor and consequential amendments
Mr. Wiggin: I beg to move amendment No. 44, in page 56, line 8, at end insert—
'(c) the functions of the Auditor General for Wales under sections 41 and 42 of the Public Audit (Wales) Bill 2004.'.
The amendment is an alternative to our new clause after clause 42, and would ensure that if the Auditor General does not have the power to study English bodies, the Audit Commission will, at the very least, have a duty to co-operate in respect of the functions of the Auditor General under clauses 41 and 42. I suspect that the Audit Commission will co-operate, but it does not necessarily have a duty to do so, so we are pressing for that here.
Mr. Touhig: Amendment No. 44, which would affect the Audit Commission Act, 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 respect of undertaking studies under clauses 41 and 42. The Bill gives the Auditor General and the Commission various reciprocal duties to co-operate, as we have discussed earlier. It requires them to co-operate in respect of studies that they would initiate themselves, under clauses 41 and 42 and under sections 33 and 34 of the Audit Commission Act respectively.
Those duties are contained in clause 43, and paragraph 34 of schedule 2—the provision that would be subject to amendment. In those provisions, the requirement to co-operate rests with the initiator of the study. The intention is that, in proposing a study, each would consult and co-operate with the other in terms of timing, exchange of relevant information and the potential for joint working in so far as they consider it necessary and appropriate.
The Bill also gives a mutual duty to the Auditor General for Wales and the Audit Commission to provide each other with any information that they reasonably require to make comparisons between English and Welsh bodies when undertaking studies of those bodies. That provision was inserted in another place after representations from the Opposition parties and was found to be quite helpful. The duty is in clause 57, and paragraph 34 of schedule 2.
The Government have not imposed a duty on the Audit Commission and the Auditor General to co-operate with each other's studies other than by the exchange of information. Our firm expectation is that
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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 the evidence submitted by both parties during pre-legislative scrutiny of the draft Bill demonstrated a clear willingness to do so. However, a duty would create operational difficulties in matters such as forward work planning, and could ultimately have a restrictive effect.
The hon. Gentleman touched again on cross-border duties. Logically, a duty for the Audit Commission would require a reciprocal duty for the Auditor General in respect of commission work, which could fetter the latter's discretion to organise the work as he sees fit. I hope that the hon. Gentleman is content with that explanation.
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