Local Audit and Accountability Bill [HL]

Lord Haskel Excerpts

Wednesday 19th June 2013 Grand Committee

[The Deputy Chairman of Committees (Lord Haskel)]

I have to inform your Lordships that if Amendment 14BB is agreed I cannot call Amendment 14BBA on the supplementary list because of pre-emption.

[Lord Wallace of Saltaire]

My Lords, we are, in a sense, continuing the previous debate. Before I directly address the amendment in terms of defining “independent”, I shall speak with another hat on. As noble Lords will know, I speak for the Cabinet Office on issues of civil society and I am struck by the fact that the largest single part of the population that is becoming more active in all civil society activities is the fit retired. There is a very large and growing element there and it is precisely the area from which local bodies are likely to find the independent members that they are looking for. Looking around this room, I note that many of us would fit into that category but, unfortunately, we are not retired. Therefore we have less time than we would otherwise like to have. The noble Lord, Lord Tope, is particularly fit, although I like to think that I am fitter than he is.

We are happy to look into the question of how one defines “close friend” and of course we will have discussions on a range of these issues between Committee and Report. However, I reiterate that a third of audit committees already have independent members and 15% have two independent members. We see the independent panels which will appoint external auditors as not having the heavy weight of work that audit committees have but as fulfilling a rather more distinctive function.

The proposal in the amendment for mandatory audit committees is addressed more directly in other amendments but, as I understand it, this specific amendment is intended to ensure that, as well as being independent of the authority, members of an auditor panel or audit committee do not have wider conflicts of interest that might compromise their independence. I agree that potential conflicts of interest should of course be taken into account in appointing members of auditor panels. However, the Bill already includes a duty for relevant authorities to have regard to guidance issued by the Secretary of State in relation to their independent auditor panels.

We intend that such guidance will cover exactly these sorts of issues, such as how auditor panels will operate and who should sit on them. We intend to work closely with the sector and interested parties on developing such guidance and identifying what wider interests should be considered in appointing members of a panel. I hope these reassurances are sufficient for the noble Lord to withdraw his amendment, or perhaps to ask for further discussion between the Committee and Report stages.

--- Later in debate ---

Clause 16 agreed.

[The Deputy Chairman of Committees]

The question is that Clause 17 stand part of the Bill.

[Lord McKenzie of Luton]

My Lords, I think that we agreed to draw stumps at the end of Clause 16. We will get on to Clause 17 next week.