Local Audit and Accountability Bill [HL]
Debate between Lord Christopher and Baroness Hanham(11 years, 4 months ago)
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Lord Christopher
My Lords, before the noble Baroness sits down, will she kindly explain a point on which I am very unclear? Some time before 2017, someone will have to decide whether the existing contracts are to be extended or not. My view is that they should be extended because they are cost-effective. Who will handle that, and who will deal with the situation that would arise if perhaps a small number of local authorities covered by a particular contract do not wish to renew while the remainder do?
Baroness Hanham
My Lords, the current contracts are due to last until 2017, and there will then be an interim arrangement between 2015 and 2017, as I have described. After 2017, unless for some reason it is decided universally to extend the contracts again en bloc—which is completely outside what we are talking about today, and it is probably unlikely—it is for the local authorities to make their own decisions about the contracts: where they want them to be, and with whom. Following 2017, within that interim period between 2015 and 2017, local authorities will have to decide what they will do and how to manage it.
Local Audit and Accountability Bill [HL]
Debate between Lord Christopher and Baroness Hanham
Baroness Hanham
My Lords, there will be the interim body of the Audit Commission as it winds down, or a separate body, to oversee the contracts so that they are not left unsupervised on their own.
Lord Christopher
My Lords, it was suggested that we needed to encourage competition. The Chancellor has not been successful in persuading and encouraging business to spend the billions, if not trillions, that they have. People will invest only if there is a profit at the end of the road. It was not an accident that 70% of the redundant staff of the Audit Commission went to the firms that have contracts; they did not go anywhere else. I do not know where else they may have gone—they are scattered around.
This is just a pipedream, it seems to me. It has not really been explained by anybody why there are so few firms to which the Audit Commission gives contracts. There are two tests. One is fitness to do the job, which is not an easy one. The second is what they want to charge—and there are nearly as many who are not given contracts because they want to charge much more. It is a pipedream to imagine that any significant number of audits is going to be done more cheaply than they are currently done.
It may be unfair to refer to this but, even so, I refer to today’s Telegraph. It is not fair to the Minister to start quoting a paper which I am sure that she never reads. The Government have received a report from Ernst & Young, from which I shall quote the headlines. The report says that the suggestion would save £1 billion, which is a lot of money. The headline is that,
“Energy bills ‘could fall’ if Big Six were whittled down to Big Four … Fewer suppliers would lead to more competition in the industry, Ernst & Young tells ministers”.
That is not comparing like with like in the job, but this confirms a great deal of the evidence which the Audit Commission itself received on the truth of the fact that competition comes only from a lot of suppliers. It does not, of course.
Lastly, will the Minister be a little clearer on what resources are going to be available in the National Audit Office? She may say that she cannot tell us until the end of the month, but I take it with a great big pinch of salt that they have the resources to fill the gaps that this Bill will produce.
Garden Cities
Debate between Lord Christopher and Baroness Hanham
Baroness Hanham
My Lords, I have indicated that the principles laid out in the prospectus and draft prospectus are already being dealt with and are already being incorporated into the proposals and designs for these larger sites. The local infrastructure fund, which has recently been set up by my department, helps with the sort of matter that the noble Lord has raised—that of the additional pressures placed on local communities—by providing funding for things such as schools and opening up roads.
Lord Christopher
I have heard what the noble Baroness has said about the issues arising from garden cities, but would it not greatly speed up the provision of houses if major developers were required to develop properly and genuinely the sites for which they already have planning permission?
Baroness Hanham
My Lords, I think that these are all different matters—we have completely different proposals being put forward. Yes, some of the developments will be where planning permission has already been given, some will be where discussions have already taken place and some will be on new sites. We have to ensure that we are flexible but insistent that these are good developments for the future and that we are not just building anonymous estates that do not bring any sense of community.
Bailiffs
Debate between Lord Christopher and Baroness Hanham
Baroness Hanham
My Lords, the guidance on the fees will make that pretty clear.
Lord Christopher
My Lords, the first Question from the Minister’s own Benches was very apt. The Financial Times reported a couple of days ago that there had already been a significant rise in the scale of unpaid rent to local authorities because of the changes in housing benefit. What advice will the Government give to local authorities, since if bailiffs turn up people will not only have no home but no furniture either?
Baroness Hanham
My Lords, the changes to housing benefit are relatively new so I am not sure what the article was about. I can say no more, other than that local authorities will be expected to work closely and sensibly with bailiffs in a proper way.
Audit Commission
Debate between Lord Christopher and Baroness Hanham
Baroness Hanham
My Lords, in the current financial climate, it makes absolutely no sense for Whitehall to own the fifth largest audit practice in Britain, particularly when it provides services that can readily be obtained in the private sector. The commission’s monopoly on appointing local auditors weakens competition and also weakens the localism that should be available to local government. Certainly in my time in local government, one of the things that irritated me most was the fact that you could not choose your own auditors. Now there will be much better and more open ways of doing that.
Lord Christopher
My Lords, I declare a past interest in that I have been a member of the Audit Commission. The noble Baroness has said exactly the opposite of what the noble Baroness, Lady Thatcher, said when she was Prime Minister in 1981 and set up the Audit Commission in 1982. I quote Mr Pickles when he said:
“I'm not interested in research and evidence—I'm here to take decisions”.
We know the basis on which this decision has been taken. If the noble Baroness, Lady Thatcher, was wrong, how, according to what the Minister has described, do the Government aim to take forward the then three aims of the noble Baroness, Lady Thatcher—namely, to raise and maintain the quality of audit, to increase cost-effectiveness, and, above all perhaps, to get value for money? How will each of those aims be advanced?
Baroness Hanham
My Lords, 1981 was quite a long time ago, just in case that has not been appreciated. Also, since then, the Audit Commission has assumed far greater roles than my noble friend Lady Thatcher ever envisaged it doing. It is now our view that it is time to put audit into the hands of local authorities so that they can demonstrate for themselves that they can choose auditors. Some inspection powers will still be in the hands of Ofsted and the Care Quality Commission to ensure that there is value for money and propriety in those services. Local authorities will have to take a very keen interest in how their services are run, the value they get for the money they pay, and the standards that they achieve.