Local Audit and Accountability Bill [HL]

Lord Christopher Excerpts

Monday 17th June 2013 Grand Committee

Debate on whether Clause 1 should stand part of the Bill.

[Lord Christopher]

My Lords, I have a lot of paperwork here and I will try to go through it without more repetition than necessary. Like most of us here, I think, I need to declare an interest, as I did on Second Reading. I spent six years on the Audit Commission. I emphasise that I am not seeking to save my old school or some historic regiment. I am seeking to secure an organisation which has a remarkable record of achievement in saving local government money and improving cost-effective working in local government and elsewhere.

--- Later in debate ---

[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.

Clause 1 agreed.