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Lord Dixon-Smith moved Amendment No. 335:


Leave out Clause 113 and insert the following new Clause--

PROPER FINANCIAL ADMINISTRATION

(“ .--(1) The Authority shall--
(a) make arrangements for the proper administration of its financial affairs, and
(b) secure that one of its officers (its “chief finance officer") has responsibility for the administration of those affairs and for the oversight of the financial administration of the functional bodies.
(2) Every functional body shall--
(a) make arrangements for the proper administration of its financial affairs, and
(b) secure that one of its officers (its “chief finance officer") has responsibility for the administration of those affairs.
(3) In subsection (1)(b) and (2)(b) above, the reference to officers includes a reference to employees or members of staff and, in the case of Transport for London and the London Development Agency, includes a reference to members of the relevant Authority.").

The noble Lord said: My Lords, this amendment suggests the deletion of Clause 113 and the insertion of what, in effect, would become a new Clause 113. Here one is dealing with what I suppose is really a matter of taste in drafting. There is a very significant difference between the two clauses--that is to say, the one which appears on the face of the Bill and the one that we have suggested should be in its place.

Clause 113 provides that there should be a “relevant authority", which means the authority, the GLA, or a functional body. It also provides that every relevant authority,


    “shall make arrangements for the proper administration of its financial affairs",

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and so on. That is all very fine; indeed, it will undoubtedly produce an arrangement which works. However, what it does not do is something which our proposed alternative would do. It does not, in our view, provide for the finance department of the authority to have sufficient oversight as regards the financial affairs of the functional bodies.

The Minister will no doubt say that the functional bodies are free and independent and are perfectly entitled to keep their affairs to themselves and manage themselves, subject to the overall constraints imposed by the mayor's budget. That will work extremely well until something goes wrong. At that point, the lines of accountability, which, under the Bill, are blurred, may present a problem. We like our proposed amendment rather better for that reason. The lines of accountability under our clause mean that, in managing their fiscal affairs, the functional bodies would be subject to the overall supervision of, and ultimately sanctioned by, the authority. We think that that arrangement is preferable. I beg to move.

Lord Whitty: My Lords, as he said, the noble Lord's amendment would effectively ensure that the chief finance officers of the functional bodies reported to the chief finance officer of the GLA. We considered the alternative represented in the proposed new clause, but, contrary to the noble Lord's view, we felt that his proposition would be the one to blur the lines of accountability and add to confusion.

The mayor, subject to the assembly, will be responsible for setting the budgets of each of the four functional bodies but will not be accountable for the management of their financial affairs. That responsibility rests with the bodies and with the authorities themselves, as provided elsewhere in the Bill. For that reason, it is essential that the functional bodies--and, of course, the GLA--should each have their own chief finance officer. Each body and each authority will be responsible for ensuring probity, regularity, and so on, in financial management. Indeed, each will be expected to have regard to reports and recommendations made by its chief finance officer. As each functional body is responsible for its own financial affairs, it is not appropriate for the GLA's chief finance officer to have a further role in a functional body's finances. That would blur accountability and deprive each board and authority of a single source of specialist financial advice.

To reflect the mayor's interest, we have provided that where a chief finance officer of a functional body makes a report concerning a functional body he is required to provide a copy for each member of the relevant body, the mayor and the chair of the assembly. However, the responsibility for dealing with the report will rest with the board or the authority concerned, as made clear by the other provisions of the Bill. It cannot transfer this responsibility to the mayor, or indirectly to the mayor via the chief finance officer of the GLA.

We consider that the Bill provides for clearer arrangements for finance administration. Responsibility in that respect lies where it is set out in

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the rest of the Bill. The amendment could lead to a blurring of the lines of accountability rather than what the noble Lord seeks. I hope, therefore, that he will not press the amendment.

Lord Dixon-Smith: My Lords, I admit to a marginal intellectual weakness in our amendment--I am surprised that the Minister did not mention this--in that it could be argued that it is centralising. However, we are dealing with the way in which the Greater London Authority is to work. Nothing in our amendment would prevent the functional bodies keeping their own accounts; nor would it prevent their dealing with matters properly. It would have provided a proper line of control back to the authority. None the less, I hear what the Minister has said and I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 116 [Functions of chief finance officer as regards reports]:

Lord Dixon-Smith moved Amendment No. 336:


Page 65, line 38, leave out from first (“the") to end of line 42 and insert (“Chairman of Transport for London or, in his absence, the Deputy Chairman of Transport for London".").

The noble Lord said: My Lords, this amendment would work in relation to Clause 116, which deals with what is to happen to reports of financial irregularities in one of the functional bodies that might come from the Audit Commission. As drafted, the Bill provides that any member might be appropriate to be the person who receives such reports from the finance officer. Alternatively, I believe it says that an employee of the functional body could be the appropriate person. We do not think that that is a proper way to deal with reports as significant as such reports might be.

One hopes that these reports would be extremely rare and that preferably they never occur. However, if they do occur, it is our view that they should be dealt with at the highest level in the functional body; namely, by its chairman or deputy chairman. I beg to move.

Lord Whitty: My Lords, this requirement on the chief finance officer to consult with other officers of the authority in this clause seeks to ensure that there is agreement among the officers of the authority about the legality of the course of action being taken and all the relevant facts are clear. Where the chief finance officer completes a report about, say, the actions of Transport for London, the body must then consider it at a full meeting of the board. To require--as this amendment does--the chairman, and only the chairman, or his deputy to be consulted before the report is finalised would limit the discretion of Transport for London to appoint whom it sees fit to fulfil the consultation role, and appointments may change from time to time or from case to case.

The arrangements we propose will ensure that matters are considered properly and promptly by those with the necessary responsibility for taking action on them. I do not think that we should seek to

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limit the discretion of Transport for London to appoint whom it considers most suitable to undertake these consultation roles. The other amendment in this group proposes that, where a chief finance officer completes a report, the mayor should publish it within seven days. I understand the intention behind this amendment. It is important that the GLA and the functional bodies are publicly accountable for their actions and that all relevant reports are publicly available. However, I do not consider this amendment is necessary because, where a chief finance officer completes a report under the provisions of Section 114 of the Local Government Act, the authority or functional body must consider it at a meeting within 21 days. That meeting must be convened in accordance with Part VA of the Local Government Act 1972, which requires that generally details of the agenda and the reports themselves must be made available three days before the meeting. There is therefore already a deadline.

Specific provision has been made for Transport for London to be subject to the provisions of that section of the 1972 Act. It will therefore have to hold a public meeting in those circumstances within 21 days and make the chief finance officer's report available. The responsibility for publication rests--as I think it rightly should--with the authority and with each functional body. I believe therefore that this amendment is not necessary. I ask the noble Lord to withdraw both of the amendments.

Lord Dixon-Smith: My Lords, I hear what the Minister said. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 337 not moved.]


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