Clause 16

Budget Responsibility and National Audit Bill [Lords] – in a Public Bill Committee at 2:00 pm on 3 March 2011.

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

Photo of Chris Leslie Chris Leslie Shadow Minister (Treasury)

This is a short clause about the services that the Comptroller and Auditor General may provide in any place within or outside the United Kingdom under agreements or other arrangements that they enter into.

I suspect that this clause relates primarily to audit support for other domains and territories and so forth. Given that the Government have decided to abolish the Audit Commission, which clearly has had a role in auditing local authority activities in England and Wales for a considerable period, and given that there is an opportunity for the National Audit Office potentially to take on some of those residual but necessary audit and scrutiny functions that the Audit Commission formerly pursued, I take it that this clause also then allows the NAO to extend some of its scrutiny role into local public service activities as well as Whitehall and other Departments. Will the Minister confirm that?

Photo of Justine Greening Justine Greening The Economic Secretary to the Treasury

The thinking behind this clause was mentioned by the hon. Gentleman when he started his comments. As he pointed out, the NAO supports a wide range of international institutions. Some of its work can be helping to build up financial management and audit skills. He mentioned that it can work in different countries—Vietnam is one example—as well as auditing a number of international organisations such as the World Food Programme. He will be aware that the NAO also supports and encourages the professional development of the international community of audit offices. The Comptroller and Auditor General has been elected to the UN board of auditors, which is responsible for auditing the United Nations.

Closer to home, the NAO also provides support to a number of Select Committees, including the Public Accounts Committee. That is the backdrop to clause 16. The hon. Gentleman asked whether there is any link to the Audit Commission. Ultimately, the Secretary of State for Communities and Local Government is taking forward work to create a new local audit framework. This clause is not designed to tackle that. Future local audit arrangements will allow local authorities to appoint their own auditors, and it is proposed to move the Audit Commission’s in-house practice to the private sector. Some services that are currently being carried out by the  Audit Commission will in future be done by the NAO, but the arrangements in this Bill are purely about modernising NAO governance, so no additional audit or value-for-money responsibilities are being given to the NAO. I hope that that is clear.

Question put and agreed to.

Clause 16 accordingly ordered to stand part of the Bill.

Clauses 17 to 19 ordered to stand part of the Bill.