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Lord Higgins: Perhaps the Minister will be kind enough to repeat his last two sentences.

Lord McIntosh of Haringey: Yes. We have set up a new, independent, statistics commission with the express purpose of commenting on departmental systems and commissioning independent audits in areas of concern. It is likely to cover a very wide range of performance data and its new role should be firmly established before consideration is given to introducing a similar role in statute for the Comptroller and Auditor General. We are also drawing up a performance information strategy and

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we are looking at the future need for validation of performance data. National Audit Office officials and others from outside government are being involved in this work. There are a great many issues to consider, including what data should be validated, what validation should entail, the right timescale for introducing changes and the best bodies to carry out validation.

I am very reluctant to impose a new requirement on departments when the role of the new statistics commission is not fully established and the nature of validation and the burden this would impose has not been fully thought through.

I hope I have shown that we are moving very actively in the direction in which, I am sure, noble Lords wish to move, but that it is premature to introduce any statutory requirement at this stage.

Lord Higgins: We seem to have the usual problem, which we have had on other issues, as to whether or not it should be a statutory requirement. I have obviously listened carefully to what the Minister said about the new statistics commission but the NAO has now had experience over a decade or more—in fact, probably two decades—of value-for-money inquiries, which were in a sense related to the question of performance measures.

I am not clear why the Government consider it better to have a statistics commission with no statutory basis, rather than have it dealt with by the NAO with all the experience that it now has in this area; also the case for saying that they will validate the actual figures. My understanding is that the statistics commission will not actually have the task of validating whether the performance measure has been met, but merely what it is. No doubt the Minister can clarify that point.

Lord McIntosh of Haringey: Perhaps I should not seek to clarify that now. I will instead write to the noble Lord, Lord Higgins, and to the noble Baroness, Lady Sharp, about what the statistics commission will actually do. It does meet the requirements of the amendment but that ought to be clarified in writing.

Lord Higgins: We are grateful to the Minister and look forward to receiving his comments in writing. Subject to that, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 5 agreed to.

6.15 p.m.

Clause 6 [Resource accounts: scrutiny]:

[Amendment No. 12 not moved.]

Lord Higgins had given notice of his intention to move Amendment No. 13:


    Page 4, line 14, at end insert—


("(3A) The Comptroller and Auditor General may examine any performance statement which he receives from a department under section 5 and report thereon.").

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The noble Lord said: I do not intend to move Amendment No. 13.

Lord Lyell: The Minister and his department have been extremely kind in providing some helpful notes on clauses. There is one particular aspect on which the Minister may be able to enlighten me; if not today perhaps, helpfully, in writing, although I hope not at a later stage of the Bill. Clause 6(2) provides:


    "If resource accounts appear to the Comptroller and Auditor General to suggest that a material use of resources required but did not receive the authority of the Treasury—


    (a) he shall inform the Treasury, and


    (b) if the Treasury sanction the use of resources, he shall treat it as always having had the Treasury's authority".

I immediately thought that there was something odd here. However, the Minister and his advisers and "winged counsel" will see that the Explanatory Notes to the Government Resources and Accounts Bill are most helpful. Paragraph 34 on page 7 contains an explanation of subsection (2) which goes back to the Exchequer and Audit Departments Act 1921. The paragraph states:


    "The Treasury cannot use this power to authorise illegal or improper expenditure—it can only retrospectively authorise expenditure that was itself legal and proper but which required Treasury approval".

Can the Minister explain whether Treasury approval is part of the duties of the Comptroller and Auditor General? If so, I believe that paragraph (b) of subsection (2) somewhat negates the power of the Comptroller and Auditor General. If he discovers something that he believes requires the sanction and approval of the Treasury he is expressing his views when he reports to the Treasury. Paragraph (b) seems to suggest that the Treasury can say that something is all right because it has approved it. It may be that it has done so, and perhaps that is the case under the 1921 Act. However, can the Minister explain to me what the Comptroller and Auditor General then does as part of his job as auditor? Does this not cut the legs from under his examination of the matter as part of his duties as auditor? Perhaps the noble Lord can explain the matter to me—if not today than at a later date.

Lord McIntosh of Haringey: The noble Lord, Lord Lyell, has gone a long way to answering his own question. The role of the Comptroller and Auditor General is that of a whistle-blower. He states that something has been spent here for which there is no Treasury approval. If that happens there are two possibilities. The first is that it should not have been spent, in which case all hell breaks loose. The department is brought to account and all the procedures which apply when departments overspend begin. The second possibility is that the Treasury says that it is legal and proper expenditure which should have had Treasury approval but by an oversight it did not receive it. If that is the case it will be approved retrospectively. I believe that that is all right.

Lord Lyell: The Minister is very complimentary towards me. I did not believe that I had necessarily answered my own question. He referred to the

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possibility of the Treasury suggesting that something should have received approval but by an oversight had not. In that case, what is the role of the Comptroller and Auditor General? In an earlier reply, the Minister said to me that the Comptroller and Auditor General reports to the Treasury. If he is a whistle-blower, he cannot do the two things. To whom is he reporting as Comptroller and Auditor General?

Lord McIntosh of Haringey: He is reporting to Parliament.

Lord Lyell: What is the purpose of paragraph (b)? If he is blowing a whistle, he should say to Parliament, "I think there is a problem here"; that should be part of his audit report.

Lord McIntosh of Haringey: This is like the signs on the buses. If you have a complaint about the service, you first try to resolve that complaint with the bus company and, if you are not satisfied, you go to the London passengers committee. The same applies here. The Comptroller and Auditor General finds something that, on the face of it, is wrong—in other words, money has been spent without Treasury approval. The first thing he asks is whether it is a formal technical problem and the Treasury omitted to approve something which was itself legal and proper—in which case that is the end of it, and no doubt there can be rapped knuckles for failing to obtain Treasury approval when there should have been Treasury approval. The Comptroller and Auditor General can report on that to Parliament if he wants to. The more serious case is the money should not have been spent at all, which is where he reports to Parliament through the Public Accounts Committee, and it is Parliament that has the ultimate responsibility.

[Amendment No. 13 not moved.]

Clause 6 agreed to.

Clause 7 [Other departmental accounts]:

Lord Higgins moved Amendment No. 14:


    Page 4, line 20, leave out ("Treasury") and insert ("Comptroller and Auditor General").

The noble Lord said: I shall add only one brief postscript to the previous remarks. It is some while now since the accounting officer paid up where there was improper expenditure; and perhaps that is rather sad. A sanction of that kind would encourage accounting officers not to do the kind of thing that seems to be envisaged in the previous clause.

Turning to Clause 7, I forget the amount but I believe that at the time it was quite large; allowing for inflation, £12,500. Here we have a fascinating clause, in light of the remarks that were made earlier by the Minister; namely, that the Treasury is bound hand and foot by this situation and there is no need to have an independent commission and so on, because one has only to look at Clause 7(1) and (2) which states:


    "(1) The Treasury may direct a government department to prepare for each financial year accounts in relation to any specified matter.


    (2) Accounts under subsection (1) shall be prepared in accordance with directions issued by the Treasury".

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This, of course, relates to other departmental accounts. However, once again it gives the Treasury considerable powers and, while we would be prepared to accept that our amendment is not perfectly drafted and that perhaps the Comptroller and Auditor General may not be the best person to issue such instructions, nonetheless there would seem to be a case for some independent body to do so rather than the Treasury which, so far as this clause is concerned, seems to have complete discretion as to how it sets about the matter. I beg to move.


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