My hon. Friend is right. The Audit Commission appoints auditors. It also prepares and keeps under review a code of audit practice and it prescribes the scale of audit fees. It can also direct an extraordinary audit in appropriate circumstances.

The main statutory responsibilities and powers of the auditors are to check that the authority's accounts have been prepared in accordance with statutes and regulations in force, and that proper practices have been observed; to satisfy themselves that the authority has made proper arrangements for securing economy, efficiency and effectiveness in its use of resources; and to comply with the code of audit practice.

I had the duty of moving the adoption of the code when it was considered by the Second Standing Committee on Statutory Instruments on 21 November last. That was the Audit Commission's code and it duly met with approval. It was noteworthy that the hon. Member for Sheffield, Brightside (Mr. Blunkett) supported the Audit Commission's role and the auditors whom it appoints. He said: There has been no conflict between the Government and the Opposition about the role of the audit service. There is no contention between us… It has never been an issue between the Government and ourselves that the audit service is a vital part of the propriety that we expect from local government". The hon. Member for Brightside went on to consider, as my hon. Friend the Member for Gedling did, one aspect of the future role of the Audit Commission. The hon. Member for Brightside said that he believed that quality, efficiency and effectiveness should replace economy, efficiency and effectiveness; as quality rather than cheapness should be the benchmark by which we judge what we are getting for our money."—[Official Report, Second Standing Committee on Statutory Instruments, 21 November 1990; c. 6–7.] The same idea of seeking quality was made one of the themes of a lecture that the hon. Member for Copeland (Dr. Cunningham) gave on 2 July 1990 as the second in the series of lectures on management of public services. He said: Quality cannot be had on the cheap. That we need a sustained period of more effective financial investment in our public services and the people employed therein is self evident. Recognising that cash will always be limited we accept the essential drive for greater financial rigour and regard that rather than cheapness for its own sake as a far better approach. If quality is our goal then efficiency is essential. I do not disagree with the intention behind those remarks, but I believe that quality can be achieved and is being achieved within the present framework. The code of audit practice is perfectly clear about that. It states: It is not the auditor's function to question policy. There is, however, a responsibility, particularly in the audit of local authorities, to consider the effects of policy and to examine the arrangements by which policy decisions are reached". My interpretation of the guidelines, which I was pleased to bring before the Committee, is that a local authority may quite properly decide what levels or quality of service to provide, but it is up to the auditor to ensure that the decision was taken in full knowledge of the financial and other consequences. I do not see that the role of the Audit Commission and the auditors that it appoints needs to be widened by legislative means. The ideas of my hon. Friend and the two hon. Members whom I have quoted can be accommodated in the present framework and I think that such ideas on quality are already being accommodated. My hon. Friend referred to the report entitled "Managing Social Services for the Elderly More Effectively" as a report which shows how a chosen level of service can be targeted to deliver the right service to the right people.

I shall now say a word about evenness and quality across the country and the spread of best practice. The quality exchange is an Audit Commission initiative to establish voluntary "comparison levels" for local authorities. The commission's first reports, which covered the seven services of refuse collection, waste disposal, highway maintenance, street cleaning, verge cutting, street lighting and gully cleaning, showed that many councils were already doing a lot to monitor and promote service quality. Nearly 200 local authorities participated in the survey. The Audit Commission's report on it highlighted the importance of four factors—management arrangements, specifications, quality control and customer satisfaction.

Some of the commission's findings may come as no surprise—many local authorities could do much more to keep their tenants' rent arrears under control, for example. Nevertheless, those points need to be made and I am sure that the objective and practical advice offered by the commission is of help to many authorities.

The Audit Commission's recent report on managing sickness absence, to which my hon. Friend referred, revealed the alarming statistics of sickness absence in certain local authorities in London. The report stated that if the six authorities with the worst sickness record in London could reduce levels of such absence to the CBI average for industry, they could save as much as £26 million, or £27 per head on the community charge. The loss to other authorities through that source is not, thankfully, quite as great, but the problem is severe and cannot be measured in financial terms alone. High levels of sickness absence can also lead to poorer services and breakdowns in management systems.

On the police aspects of the commission's work, in which, of course, my right hon. Friend the Home Secretary has the major Government interest, the commission's responsibilities for appointing auditors for local authorities extend to provincial police authorities and the commission is as concerned with recommending ways of improving the economy, efficiency and effectiveness of police forces as any of the other organisations. The remit does not extend to the Metropolitan police, because they are subject to audit by the National Audit Office.

In preparation for local audits of police forces, the commission has been conducting a special study based on fieldwork in several provincial forces. That study began three years ago and the commission has so far published eight papers, to some of which my hon. Friend has referred. I understand that the work continues and that a further two papers, one on management structure and resource allocation in provincial police forces and the other on devolved financial management, are due for publication within the next few months. The commission has also published two audit guides for use by the auditors whom it appoints.

Most of the recommendations are properly the province of chief constables and their police authorities, but the commission's work in this matter is, of course, of great interest to my right hon. Friend the Home Secretary.

My hon. Friend suggests that the Home Secretary should open up the Met to the commission's scrutiny. The Met is different from provincial forces because the Home Secretary, rather than a local authority, is its police authority. Its auditing arrangements are different, too, being linked to those for central Government, with the National Audit Office appointing external auditors and publishing value-for-money reports.

Although I have explained the structural position, it is equally clear that the Metropolitan police benefit from the Audit Commission inquiries into provincial forces. The Metropolitan police force is not ignored, nor does it ignore the work of the Audit Commission.