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

I beg to move amendment No. 7, in clause 3, page 4, leave out lines 25 and 26.

Subsection (3) prevents the Auditor General from questioning the merits of the policy objectives of a body as he studies value for money. If in the course of his studies, the Auditor General discovers a body's objectives to be causing inefficiency and ineffectiveness, he should report and question its policy. However, subsection (3) discourages him from making such comments. The amendment would ensure that he is not constrained in his work by policy considerations.

Mr Hywel Williams (Spokesperson (Disability; Health; Social Security; Work and Pensions); Caernarfon, Plaid Cymru)

From the Government's standpoint, it may well be beneficial for the Auditor General not to question the merits of policy objectives. In practice, however, I do not see how that can be avoided if in the course of his work he discovers that a body's objectives do not contribute to efficiency or effectiveness.

That by no means confirms that the amendment is correct, but one point concerns me and my party—the relationship between the Audit Committee of the National Assembly, and the Government and the Auditor General. There is a good working relationship, which, in the Assembly, is based on the Audit Committee being precluded from scrutinising the policy implications of its reports. That, in respect of the clause, fits in with the role of the Auditor General.

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

We have had a short but important debate that perhaps goes to one of the big issues that have faced auditing and public inspection these past years. Amendment No. 7 would delete the prohibition on the Auditor General being able to question the merits of policy objectives of any relevant body while undertaking or promoting comparative cost-cutting studies on economy, efficiency and effectiveness—or, as most of us know it, value for money.

It is a long-standing principle that the Auditor General, and similarly the Comptroller and Auditor General in England, cannot question the policy objectives of a body for which he has audit responsibilities. That does not prevent him from expressing a view on how the body set about achieving its objectives and whether its approach represents value for money. He may also, as the clause seeks to promote, inform future strategic policy development. We touched on that on Second Reading.

However, questioning the merits of policy could compromise the Auditor General's independence if, for instance, he undertook audit work or a ''value for money'' study relating to a policy area on which he had previously expressed a view. That would not be conducive to the exercise of his functions, and we fear that it might be seen as a blight on his independence.

The amendment would also raise an inconsistency between the Auditor General's powers in respect of cross-cutting studies provided for under the clause, and studies in respect of the Assembly and Assembly-funded bodies undertaken under the Government of Wales Act 1998, where the prohibition on questioning policy merits would still apply. For those reasons, we believe it would be inappropriate for the Auditor General to question the merits of policy objectives when exercising his functions.

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

I am particularly keen to intervene on the Minister because I do not want him to finish before having the chance to consider this. We all recognise the importance of an expert being able to comment, but quite a harsh turn of phrase is used to prevent the Auditor General from commenting. Surely, in the interests of effectiveness and efficiency, he ought at least to be able to say something that would be helpful. I am prepared to recognise that simply deleting the wording is not the best solution, but might not some modification be possible to enable him to make a constructive input without impinging on his independence?

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

The hon. Gentleman makes a perfectly valid point. In my initial comments, I sought to point out that the Auditor General has the ability to question the merits of policy and how an operation is being worked. He may express a view on how a body sets about exercising its objective and whether its approach represents value for money. We are at one on that. I will take the hon. Gentleman's point on board and reflect further on the wording, although I do not know whether it will be possible or appropriate to make any changes.

The hon. Member for Caernarfon (Hywel Williams) makes an important point. I am aware of the good relationship in the National Assembly in respect of the work of the Audit Committee. Again, I will broadly reflect on the provisions of the clause. If the Government feel that there is anything that we could or should do to take account of the points made by both hon. Gentlemen, we will perhaps reconsider at a later stage.

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

I am grateful to the Minister for those comments. I know now that the Official Report of this Committee plays a part in any legal questioning. His answer enables us to withdraw the amendment because we now know that should the Auditor General wish to make a comment he can do so. That was the

purpose behind the amendment. I am happy with the Minister's reply and I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Question proposed, That the clause stand part of the Bill.

Mr Hywel Williams (Spokesperson (Disability; Health; Social Security; Work and Pensions); Caernarfon, Plaid Cymru)

May I draw the Committee's attention to the need to keep the Assembly's Audit Committee informed of and involved in these studies? I note the Minister's confirmation that he will take this point into account. Section 145 of the Government of Wales Act states that the views of the Audit Committee should be taken into account, yet there is no such statement in proposed new section 145A. However, I take his point that the importance of the Audit Committee will be borne in mind.

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

The hon. Gentleman is right. Sections 100 and 145 of the Government of Wales Act enable the Auditor General to undertake value-for-money studies in respect of the National Assembly or its sponsored bodies. When undertaking such studies, the Auditor General must take account of the views of the National Assembly's Audit Committee.

Clause 3 adds proposed new section 145A to the Government of Wales Act, which enables the Auditor General to undertake forward-looking cross-sectional value-for-money studies. The clause does not specifically state that the Auditor General will take account of the Audit Committee's views, although, in practice, I believe he would. As I said earlier, I will take account of what the hon. Gentleman says, and if there is anything we ought to do to make that point clearer, we will consider it.

Question put and agreed to.

Clause 3 ordered to stand part of the Bill.