Clause 1 - Transfer of functions of Assembly
Public Audit (Wales) Bill [Lords]
9:25 am
Mr Don Touhig (Parliamentary Under-Secretary (Wales), Department for Constitutional Affairs; Islwyn, Labour/Co-operative)
The clause requires that the Assembly obtain the consent of the Auditor General before making an order. Amendment No. 1 would remove the requirement to obtain the Auditor General's consent before the Assembly could make an order enabling him to exercise certain of the Assembly's supervisory functions. The amendment provides for consultation with the Auditor General, but falls short of seeking his or her consent. It could mean, therefore, that the Assembly could impose the exercise of functions on the Auditor General. That would be unacceptable, and I will explain why.
The consent of the Auditor General to any exercise of the Assembly's functions provided for by the clause is vital, because the Auditor General is a Crown appointment. As the statutory auditor of the Assembly, it is important that his independence is not called into question. That is the main reason why we will resist the amendment. The Auditor General must
be satisfied that in taking on any such functions his independence is not compromised. Objectivity and independence are the two key principles underlying the auditor's work. They are promoted by the auditing practices board and observed by the Auditor General. The requirement for his consent in clause 1 ensures that those safeguards are maintained.
A further safeguard is that any order made under the clause, whether transferring supervisory functions on a once-and-for-all basis or asking the Auditor General to exercise them on the Assembly's behalf, would be subject to scrutiny under the National Assembly's subordinate legislation procedures. Those of us who have served on Committees dealing with Welsh legislation—as the hon. Member for Leominster (Mr. Wiggin) has—will recognise that the Assembly has rigorous public scrutiny of such matters.
The basic objective of the provision is to reduce bureaucracy where possible. Discussions between the Auditor General and the Assembly on the issue need not be confrontational, and I hope that they would not be. The Assembly would readily accept the fact that the Auditor General might consider it inappropriate to take on a particular function.
Amendment No. 2 would restrict the Assembly's ability to transfer supervisory functions to the Auditor General or to have him exercise such functions on the Assembly's behalf. The effect would be that the Assembly could not exercise that power in respect of a body that exercises functions of a public nature but is not entirely or substantially funded from public money. That is an unnecessary restriction and could be counter-productive. A body exercising functions of a public nature may not be entirely funded from public money, nor need it necessarily be construed as being substantially funded from public money. It may earn income from fees and charges.
I shall give some examples to assist the Committee. If such a body is a regulatory body, it may derive a significant proportion of its income from inspection or registration fees. Two examples of that would be the Care Council for Wales and the General Teaching Council for Wales. The reasons why the Assembly may wish to transfer its supervisory functions—or to have them exercised by the Auditor General—may be valid irrespective of whether a body is wholly or partly financed from public funds.
The definition of a ''public body'' in the clause is consistent with the definition used in the Government Resources and Accounts Act 2000. If there was doubt about whether a body was ''substantially'' funded from public money, it might still be covered under the first heading of the definition as a body exercising functions of a public nature. The alternatives—to define ''substantial'' in terms of a cash or percentage threshold—could result in anomalies. The Assembly could make such an order only in relation to the supervisory functions that it already has, so the regulatory burden on bodies that fall within the definition would not be increased.
The hon. Member for Leominster asked whether the definition of a public body in the clause could cover private companies. The Auditor General would not
exercise functions in respect of a private contractor; those would be carried out under the terms and conditions of the contract, and not by the statutory supervisory responsibility of the Auditor General. I hope that my explanation has been helpful, and I invite the hon. Gentleman to withdraw his amendment.