Mr Bill Wiggin (Shadow Secretary of State for Wales, Local and Devolved Government Affairs; Leominster, Conservative)

I beg to move amendment No. 27, in page 13, line 25, leave out subsection (4).

Mr Win Griffiths (Bridgend, Labour)

With this it will be convenient to discuss the following:

Amendment No. 28, in clause 16, page 13, line 33, leave out subsection (7).

Mr Bill Wiggin (Shadow Secretary of State for Wales, Local and Devolved Government Affairs; Leominster, Conservative)

This is a busy morning for some of us. In speaking to amendment No. 27, I shall include amendment No. 28. They are probing amendments concerning the audit practice code in clause 16.

Amendment No. 27 seeks to delete subsection (4) in order to ascertain the Assembly's role in relation to the audit practice code. Before the Assembly gives its approval, can it amend the code? If it could, that would undermine the Auditor General's authority.

Amendment No. 28 removes subsection (7), because even after the code has been issued by the Auditor General, and has been approved by the Assembly, either House of Parliament can annul the code by statutory instrument. Can the Minister explain why that power is included, and in what circumstances it might be used?

Mr Don Touhig (Parliamentary Under-Secretary (Wales), Department for Constitutional Affairs; Islwyn, Labour/Co-operative)

The amendment would remove the National Assembly's ability to approve a draft code of practice for the audit of local government bodies in Wales before its introduction by the Auditor General. The code would incorporate best professional practice with respect to standards, procedures and techniques to be adopted by auditors in the exercise of their functions. The provision enabling the Assembly to approve the code has been incorporated in the Bill as a result of representations made during pre-legislative scrutiny and public consultation on the draft Bill. Preliminary work is already under way by the National Audit Office in Wales and the Audit Commission in Wales in the preparation of such a code.

Similarly, amendment No. 28 would remove the ability of either House of Parliament to annul the draft code by negative resolution procedures. The provision for parliamentary consideration of the draft code was also included in the Bill in response to views expressed during consultation. Under the provisions of section 4 of the Audit Commission Act 1998, the express approval of Parliament is required in relation to the existing code of audit practice in England and Wales. It is appropriate that a code of practice discrete to Wales should be approved by the Assembly and, should it wish to do so, Parliament should also have the opportunity to scrutinise the code and comment on it.

Very significant sums of taxpayers' money fund local government services in Wales, and it is right that there should be an opportunity for democratic scrutiny of the way in which local government bodies are to be audited. That does not compromise the Auditor General's independence, because neither the Assembly nor Parliament would have the right to modify the code. In the very unlikely circumstances of the draft code not being approved, it would be referred to the Auditor General for further consideration. I think that I have answered the hon. Gentleman's specific point: the Assembly would not have the power to amend the code.

Mr Bill Wiggin (Shadow Secretary of State for Wales, Local and Devolved Government Affairs; Leominster, Conservative)

I am grateful to the Minister for his reply. The concern is that the Auditor General could be undermined by tweaking by the Assembly. The Minister has made it clear that that will not happen, and I am grateful for that, but in the negotiations during the preparation of the draft code, which would be laid before the Assembly, such a problem could exist. Clearly, the Assembly must have a say over the code, as it will have to live by it. Equally, the Minister

will recognise my concerns that during the negotiation phase of any code before it was laid before the Assembly, there could be a similar problem. The same argument applies to the parliamentary element here: it is important that Parliament retains the power to annul the code by statutory instrument. I do not think that it ever will, but I recognise the value of leaving the provision in the Bill. We have expressed our concern about untoward behaviour taking place during the negotiations. I am sure, however, that that will never happen. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 16 ordered to stand part of the Bill.

Clauses 17 to 23 ordered to stand part of the Bill.