HC Deb 25 February 1929 vol 225 cc1593-600

(1) The provisions set out in the Third Schedule to this Act shall have effect with respect to the audit of the accounts of every county council and of every town council, and the provisions of any enactment so far as inconsistent with the provisions of the said Schedule shall cease to have effect.

(2) The statutory provisions with respect to accounts and budget applicable to a county council or a town council shall apply as regards all functions transferred to the council by or under this Act.—[The Lord Advocate.]

Brought up, and read the First time.

The LORD ADVOCATE (Mr. William Watson)

I beg to move, "That the Clause be read a, Second time."

I feel sure that it will be for the convenience of the discussion if we are also able to scrutinise the details of the Schedule at the same time, because obviously this new Clause and the Schedule should he considered together. Therefore, with your leave, Mr. Chairman, I propose to deal with the question broadly, not only in regard to the new Clause but also in regard to the Schedule which is referred to in the new Clause.


I am not sure how far the right hon. and learned Gentleman can scrutinise the Schedule in detail at the moment. I notice that there is an Amendment down to the proposed new Clause but no Amendment to the Schedule. It will be difficult, however, to discuss the Clause without discussing the Schedule and the Committee will no doubt generally agree that I should allow a general discussion on the points which arise on the new Clause and on the Schedule so far as they concern or affect the proposed new Clause.


The purpose of the new Clause is to get a uniform system of auditing accounts throughout all these local authorities, both in town and county, which are being constituted or-retained under the scheme of the Bill. At the present time in the Local Government Act, 1889, there is a provision, the main lines of which we have adopted in drawing the Schedule to this Clause. Under that Act, the auditor is an, independent auditor and appointed by the Secretary of State. His remuneration is approved by the Secretary of State. Then with regard to the question of objection to the accounts, the system at present is rather different in the case of the burghs from what it is under the county code. Under the county code there is a right to the auditor to surcharge. As far as I know the right of surcharge does not exist in any of the burghs' statutory provisions, but there is a right there to the ratepayers to appeal to the sheriff against any item in the accounts to which they take objection. We think this is a matter which would be more conveniently dealt with by means of administrative audit, and that the right of appeal as to the counties should be to the auditor, and that a right of surcharge should be inserted.

Two important additions have been, made in the Schedule with regard to the right of surcharge, and one of them is very important. That is the right to the Secretary of State, if there is any question of law involved in the matter of surcharge, to state a case and to take the opinion of the Court of Session in order that that may he judicially determined by the Court. Sometimes very important questions arise. He will have to follow, and will willingly follow, the decision in the matter. There is another point with regard to surcharge. The Committee will note in paragraph 9 of the Schedule a provision which I hope will be found very satisfactory. Of course it was never intended that a member of a town council who bona fide agreed to a payment, should be surcharged. Although that was, implicit in the paragraph already drafted, it was agreed, on the suggestion of the Town Clerk of Edinburgh, to make the matter clear. It is only right that when a man elects to become a town councillor he should know what are his liabilities to surcharge, and we have thought it right to make that matter clear, which, is done in paragraph 9.

Another question is this: We are retaining the separate or additional audit, the Departmental audit of the Education Department. On a previous occasion I have explained the reason why it is considered wise, and indeed necessary, to retain this arrangement. As hon. Members are aware, a great deal of the education money is in the shape of grants, which are given for a particular purpose and are regulated by Departmental minutes. These minutes are very frequently the subject of alteration, and it is vital that someone who is constantly up to date and familiar with the Departmental minutes should be in a position to check the educational expenditure. It will involve nothing beyond what is done now. At the present time every education authority has a cash auditor of its own, and the Departmental audit is in addition to that. It has never been found a trouble at all. On the contrary the ordinary cash auditor rather welcomes the expert assistance of the Departmental auditor, who knows all these matters. Thereby uniformity of administration is secured. But in another sense you avoid uniformity, because in a matter like bursaries it is important that the administration should he varied in different districts, and that is a matter over which the Department has control. The officials at any rate both of Edinburgh and Glasgow Corporation, welcome the retention of this educational Departmental audit.

Hon. Members who know Glasgow will remember that there was at one time a good deal of trouble there—I remember it well as a lawyer—concerning the production of vouchers. Glasgow got a Clause in one of their local Acts which enabled a ratepayer to get access to the vouchers after he had tabled his objection. In other words he was enabled to have access to the vouchers in order that he might prove his case before the sheriff. Some may say, Why not put that provision in here? The answer is obvious. The sheriff is out of it, and the person who will in future deal with the objection will be the auditor himself. The auditor already has access to and control of all these vouchers; he has all the material at his hand already.

I see that there is an Amendment in the name of my right hon. Friend the Member for Hillhead (Sir R. Horne) to provide that Articles 1 and 2 of the Schedule shall not apply to Glasgow. As far as I know the only difficulty between us and Glasgow is as to whether there should be insistence on having one auditor only for Glasgow. We have met the other points with regard to the power to vary times and other things. With regard to objections, there is on the Paper an Amendment in a revised form of paragraph 3, which will suit the convenience of different areas. I saw my right hon. Friend the Secretary of State yesterday, and he authorised me to say that he will not insist, in the case of Glasgow, in having only one auditor. If he can persuade the Corporation to agree, that is another matter, but he will not insist against their wishes. It is a matter for discussion, because the terms of the Schedule leave it quite open; the words there used are "one or more." How far that applies to an Amendment standing in the name of the hon. Member for North Aberdeen (Mr. Benn) I do not know, because so far Aberdeen has not made any representations to us of any kind against the Clause. That city has more than one auditor. Dundee used to have more than one, but has now only one.


I confess that the question raised by the proposed new Clause has perturbed Corporation of Glasgow greatly. As one can imagine, Glasgow, with all its ramifications of interests and its great population, presents a task in connection with the auditing of its accounts such as is presented by no other town in Scotland, and probably by no town in England except London. Accordingly it requires exceptional treatment. In order to give the Committee an idea of the problem in Glasgow, may I say that Glasgow in the past, appointing its own auditors according to its own system, has employed in its rating departments, 14 auditors and in its non-rating departments, 11 auditors or 25 in all. When we come to examine how many days have been spent on this business, we realise the size of the undertaking. The principal auditors spent 116 days in their task in the rating departments, and their assistants were occupied 1,834 days. In the non-rating departments the principals of these firms were employed for 616 days and the assistants for 1,003 days. Accordingly you have the principal auditors working for 177 days in the year and 2,837 days spent by the assistants. There is no scheme by which this task could be put into the hands of one auditor. I daresay a number of important firms are conducting this work and no one of them could keep a staff sufficient to carry on the work which is necessary throughout the year and to do the audit in the few weeks at their disposal.

It is only by having an enormous staff under one auditor and splitting it up over the whole year, that one could succeed in making an organisation competent, to do the business properly. Furthermore, the books of the Corporation are not available every day in the year. There are times when people are on holidays. There are rush times. There are periods when people are working on the books in the ordinary course of business, and when the books are not available to any auditor. Therefore, you must have a system in Glasgow which will suit Glasgow's particular circumstances. Glasgow has done this work in a manner corresponding to its usual activity in matters of business. Under the present system they are able to have the audit complete in six weeks with the result that they have their accounts available at the end of the year so as to inform the minds of the people who, are dealing with the estimates for the following year. I hope nothing will be done to interfere with the efficacy of this system in Glasgow. I do not feel that at the moment, or until I get some further assurances, I can be content with the new Clause as composed by the Lord Advocate. To say "one or more auditor" may mean anything, and I must have some assurance that this proposal is not going to mean that a sole auditor will be called upon to do this work.

We want to ensure that it will be possible to have a body of auditors who will be competent to carry out this task with the same efficiency as has been shown in the past. I do not know what the Lord Advocate will say on this matter, but I would point out to him that Glasgow has been accustomed to appointing its own auditors. This power is being taken away on the principle of estab- lishing some system of uniformity. That is a great deal for Glasgow to give up, but it is possible that we might succumb, even to that suggestion, if we were assured in regard to other matters. There is one thing, however, we must be assured of, and that is that we shall get a system which will enable us to carry out this important business with the same efficiency as in the past. For the moment, I am not prepared to withdraw the Amendment standing in my name until I understand better what the Scottish Office propose to do in the matter.


Is the right hon. Gentleman prepared to move his Amendment?


I understand we are taking part in a general discussion at the moment. When it comes to the appropriate time I shall certainly be prepared to move my Amendment.


I support the position taken up by the right hon. Gentleman the Member for Hillhead (Sir R. Horne). Glasgow is in a special position among all the municipalities of Britain in regard to the amount of money which it handles. Last year it had to deal with something like£22,000,000. Its rates amount to £7,000,000 annually, and long experience has impressed upon both members and officials of the corporation the necessity of employing a number of auditors—men who are trained in business, and capable of undertaking the responsibility of looking after the city's finances in this respect. Neither the Government, nor members of the community have ever called in question this method of dealing with the city's money. As far as I am aware, there has never been any charge of malfeasance or of wrongdoing against any official or member of the corporation in this connection. As the right hon. Gentleman has said, there is a very short time available for the audit. The audit has to be finished before 1st June every year and the accounts made public by that date. This is in order that the accounts may be properly presented to the council, after the vacation in July, so that the rating proposals may be given effect to and we may begin to collect our rates about the beginning of October.

The Government's proposal would do the City of Glasgow considerable injury in regard to its accounting. It would delay matters and prevent us from getting ahead with the business in the way I have described. I hope the Government will give effect to what is the unanimous desire of the corporation, without regard to party, in this matter. This is not a party question in the Glasgow Corporation and we do not desire that it should become a party question. There are 27 auditors at present and their contention—which I support—is that One auditor will not suffice if the work is to be as well done in the future, as it is done under the present system Speaking, not on be-half of the corporation, but for myself, I object to the diversion of patronage from the corporation to the central authority. They will probably appoint a man from Edinburgh. On one occasion when I was a member of the parish council, they appointed an auditor from Edinburgh who did not know the City of Glasgow, and its requirements, and who did not know anything about parish council work there. I personally object to this proposal. I think the patronage which the Secretary of State already has, is more than enough and I do not want him to have any more. We have no objection to the education authority audit, or the parish council audit remaining as it is, but we desire that the Corporation of Glasgow, which has managed its business so well in the past, should be left free to continue its present system.

4.0 p.m.


At the present moment, as the hon. Gentleman has just admitted, in the case of Glasgow it is true that the council can appoint a person approved by the Secretary of State, and therefore at the moment there is very little in that point. But I appreciate the point raised by my right hon. Friend and referred to by the hon. Member opposite, and I appreciate also that the difficulty is partly, if not largely, caused by the difficulty of consulting my right hon. Friend the Secretary of State with regard to this question. My right hon. Friend knows that we do not desire to do anything against the wishes of Glasgow. We saw representatives of Glasgow and discussed this question and one or two other points on the Clause, and we agreed on every one except that one. If my right hon. Friend will not press his Amendment to the proposed new Clause, I will undertake to get in touch with Glasgow before the Report stage, and ascertain whether they are satisfied with the assurance I have given or not, and then the matter can be raised again if necessary.


In view of the assurance of my right hon. and learned Friend that the matter will be considered between now and the Report stage, I will not move the Amendment to the proposed new Clause which is down in my name.

Question put, and agreed to.

Clause read a Second time, and added to the Bill.