Government Resources and Accounts Act 2000 (Audit of Public Bodies) Order 2017

Lord Tunnicliffe Excerpts

Wednesday 29th November 2017 Grand Committee

[Lord Jones (Lab)]

My Lords, I thank the Minister for his exposition. I shall be very brief. Ebbsfleet Development Corporation figures largely in the draft order. Can he say in some detail what it is, what it does, who leads it and what is its budget?

[Lord Tunnicliffe (Lab)]

My Lords, I am sorry to be a bit picky, but I hope that the Minister has not moved the order; I hope that what he has in fact moved is that the Grand Committee do consider the order. The order itself, whatever his Treasury-produced paper says, will be taken on the Floor of the House after consideration by the Committee. I note the Minister nodding in agreement. I hope that his authors will get that little bit right in future.

I thank the Minister for introducing the order to the Committee this afternoon. The order provides for certain public bodies to be audited by the Comptroller and Auditor-General. In addition, the scope of audit is removed from the Comptroller and Auditor-General for a number of public bodies and companies that are no longer in operation, no longer exist or no longer meet the criteria for public sector audit. It is on the whole concept of criteria that I wish to ask one or two questions.

First, does the primary legislation that established these bodies have Henry VIII clauses that allow the changes to be made by delegated legislation? Secondly, with reference to those bodies being omitted from the scope of National Audit Office audit, why are they being omitted and against what criteria? Will the Minister outline the criteria to the Committee? Thirdly, why are the specific eight bodies being added, under what criteria are they being added and why are the Government adding them at this specific moment? Lastly, what other bodies are either waiting to or likely to be added to the list of bodies to be audited by the National Audit Office? Is there a question about the quality of the bodies waiting to be added?

Although I understand that the order is largely procedural, I would welcome a response from the Minister on those questions to give greater clarity to those who are affected by the order about why they are affected. In very simple terms, the Minister gave us an overall view that it was to add consistency, but I should have thought that that consistency must be against a general view of what should or should not be audited by the National Audit Office.

[Lord Young of Cookham]

My Lords, I am grateful to both noble Lords who have spoken in the debate and will try to respond as best I can.

In answer to the last point made by the noble Lord, Lord Tunnicliffe—he asked: what is the big picture?—the big picture goes back to the year 2000 and Lord Sharman’s report, which recommended that all public bodies should have as a statutory auditor the C&AG. Since then, most new bodies that have been set up have had the C&AG as their auditor, and most existing bodies have been swept up and are now caught by the C&AG. One or two have slipped through the net, which is why we need the order to capture them. That is the basic principle—that the C&AG should be the statutory auditor of all public bodies in the interests of transparency and other broad goals.

The noble Lord, Lord Jones, asked about the Ebbsfleet Development Corporation and, in particular, I think, who reads its report and what the whole development corporation costs. I would like to write to him as I do not have those figures at my fingertips. The responsibility for the development corporations rests with the Department for Communities and Local Government, and I will contact it to pass on the noble Lord’s concerns and make sure that he gets the information that he has rightly asked for. The Ebbsfleet Development Corporation is delivering 15,000 homes and creating a 21st-century garden city in north Kent, taking advantage of HS1.

Turning to the questions asked by the noble Lord, Lord Tunnicliffe, I think I have explained the broad context of audit and accountability and where central government believes responsibilities should rest. The first statutory instruments under Section 25(6) of the Government Resources and Accounts Act 2000 made the C&AG the auditor of certain non-departmental public bodies. The C&AG was also given greater powers of access to documents held by persons in receipt of grants from, or in relation to contracts with, bodies audited by the C&AG. Under the Companies Act 2006, the C&AG was given power to audit companies and specific provision was made for the auditing of non-profit-making companies. This order continues the long-standing approach of implementing Lord Sharman’s recommendations, which I mentioned at the beginning, and which have been adopted by different Governments.

I shall address the specific points raised by the noble Lord, Lord Tunnicliffe. On whether the primary legislation that established these bodies has Henry VIII clauses that allow these changes to be made by delegated legislation, for the bodies included in the scope of C&AG audit by this order, I can advise that no such provisions are available. For the bodies that are removed from that scope, the order amends provisions previously made by earlier GRAA orders and there are no other legislative provisions which would enable all the necessary changes to be made.

Regarding the bodies that are being omitted from the scope of the NAO audit, as I said in my opening remarks, these 61 bodies have ceased operation and there is therefore nothing left to audit and they are being removed. They are listed in one of the schedules to the order. Regarding the addition of the eight bodies, again, in my opening remarks I tried to outline the criteria. To address the noble Lord’s question on why this is presented now, the Treasury originally laid the order in March 2017. However, debates were not possible as a result of the election and so the order was re-laid in September, in slightly amended form, with the Commons debate scheduled for 12 December, and was presented to the Lords today. Lastly, the noble Lord raised a question on future GRAA orders. The Treasury has informed me that no further affirmative orders are planned, which I think is good news for both of us. The last affirmative GRAA order was in 2012.

We support the policy that all public bodies should be subject to C&AG audit to increase parliamentary accountability. We are now implementing that policy, bringing full accountability to Parliament for public bodies and other central government bodies that are consolidated within a department’s accounts. The draft order before us today is an important step to realising that ambition.

[Lord Tunnicliffe]

Will the Minister forgive my unreasonable curiosity and tell me what GRAA stands for?

[Lord Young of Cookham]

Government Resources and Accounts—Act. I got three out of four off the cuff. That was a very fast ball the noble Lord bowled me right at the end, and I got three out of four.

Motion agreed.