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.

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