§ 2.49 p.m.
§ The Parliamentary Under-Secretary of State, Department of the Environment (Lord Bellwin)
My Lords, I beg to move that the House do now again resolve itself into Committee on this Bill.
§ Moved, That the House do now again resolve itself into Committee.—(Lord Bellwin.)
§ On Question, Motion agreed to.
§ House in Committee accordingly.
§ [The EARL OF LISTOWEL in the Chair.]
§ Clause 13 [Declaration that item of account is unlawful]:
Lord Bruce of Donington moved Amendment No. 61:
Page 11, line 10, at end insert—
(" (2A) The auditor in determining whether under subsection (1) above it appears to him that any item of account arising from the exercise of discretionary power is contrary to law, and the court in deciding whether in the same circumstances to make a declaration under subsection (2) above, shall regard the political policy of the body concerned independent from and in addition to any matters to which it must
have regard under any statute as a matter of particular relevance which ought to have been taken into account when exercising the power.
(2B) In determining the political policy of the body whose accounts are being audited for the purposes of subsection (2A) above, the evidence of that body as to its political policy shall be conclusive and shall not be questioned by the Court.").
§ The noble Lord said: I beg to move the amendment standing in the name of my noble friend Lady Birk and myself. This raises once against the whole question of politics and audit. I think it is common ground in the Committee that so far as possible that should be dealt with.
When an auditor is acting in the capacity of auditor to a local authority, whether he belongs to the old district audit service or is an independent practitioner, and bearing more particularly in mind the increased responsibilities of auditors under Clause 9 and the wider, and sometimes diffuse, area that is projected to be covered by his activities, it is of the utmost importance that he should be seen to be acting in a non-political manner, and perhaps more importantly, that he himself should feel that he is not, directly or indirectly, there to serve a political purpose. For the Government, Mr. Tom King, in the course of debates in the other place, has made it clear that he assents to that broad general proposition. He said on 25th March last:
I want to make it clear that it is not the auditor's duty to consider political merits. It was to avoid any misunderstanding on this point that we agreed to the deletion of ' carrying out of its policies' in Clause 9(1)(c). Auditors themselves have no doubt upon this point ".
He went on to quote an extract from Annexe 2 to the Local Government Audit Code of Practice, which was published as an annexe to Circular 79/73 issued by the Department of the Environment, which explained their duties. It is to be emphasised that a circular does not have any statutory authority. Nor does any sentiment expressed, however clearly, honestly and properly, in either House of Parliament. If the courts have to construe what a measure means, they are prohibited from taking parliamentary proceedings or the intentions of Government, in whichever House they are expressed, into account; they rely only on the law either in statute or on case precedent.
As for the wishes of the Minister, on the assumption that the Local Government Audit Code of Practice, as published in 1973, nine years ago, still represents, and will continue to represent under the new code of practice which is to be issued, those wishes, then the words in the 1973 circular are of some importance. I quote from paragraph 5 of Annexe 2:
It is, however, not the function of the auditor to express his own opinion as to the wisdom of particular decisions taken by councils in the lawful exercise of their discretion. It is to be expected that any report which related to such decisions would follow discussions with officers and members and refer to facts which had not previously been brought to the notice of the council or which ought to be reported for public information. The report would enable the council to give further consideration to the matter in the light of the facts reported and any public reaction thereto. The role of the auditor as here described has met with the approval of the courts for many years ".
On the assumption that that is still the Government view, there seems to be little reason why it should not be incorporated in the statute, and that is what the amendment seeks to do; namely, to translate into the Bill the intentions of the Government as previously expressed.
§ I foresee great difficulties arising, particularly when we move into the sphere of an auditor's activities which have been referred to as "value for money audits", a term that is not generally known in the accountancy or even in the legal profession. Its significance and real meaning still have to be established in terms of the juxtaposition of the words there expressed, although there is a special section in Layfield which deals with value for money—I am well aware of it. It may well be that the work of evaluation of value for money is proper for the accountancy profession, public or private, to deal with, but the term "value for money audit" is not well known and, in professional terms, it has little meaning.
§ There are ambiguities: in view of those, we hope that noble Lords will agree that the whole matter should be clarified, and in our view the best way to clarify it is to include what is meant by the term in the Bill. Once, therefore, it has been determined to he a political matter—which involves value judgments equally as abstruse as those involved in determining value for money—that should be made clear so far as possible within the statute, and, for that reason, I commend the amendment to the Committee. I beg to move.
§ Lord Bellwin
I am obliged to the noble Lord for an interesting amendment which touches on the important matter, as he said, of the exercise by local authorities of discretion in the exercise of their powers. The Committee will be aware that authorities may be challenged for the unreasonable exercise of discretion if they fail to comply with what is known as the Wednesbury case. Those criteria are that a decision of the local authority made in the exercise of its lawful powers may be challenged only if it can be shown that, in reaching the decision, the authority acted unreasonably, first, by taking into account matters which ought not to have been taken into account; secondly, in not taking into account matters it ought to have taken into account; and thirdly, in coming to a decision so unreasonable that no reasonable authority could ever have reached it.
It is a fact of political life that political decisions guide or direct many decisions of local authorities. That is of itself not unlawful. What matters, as the court heard in the recent Camden case, is the quality of the decision reached. The judgment in that case and its effect on the Wednesbury rules have yet to be assessed. However, there is no doubt that the judgment has bolstered local authorities in the proper use of their discretion. The amendment would in effect write into the Wednesbury criteria a statement that the political policy of the authority is a matter which ought to be taken into account. If the amendment were to succeed, it would create confusion as to its meaning and consequences. In fact, with respect, I suggest that it would achieve nothing.
Political policies would not be protected from the requirements of the law. The provision would apply only where an authority was exercising a power conferred by law; nor would the amendment produce any new considerations. As I have said, political policies already guide very many decisions of local authorities; some people would go much further and say that they guide almost all of the decisions of local authorities.
958 I hope that I have explained why I think that the local authorities, in the exercise of their discretion, are hardly in need of—if I may so call it—an illusory support such as is contained in the amendment. I hope that the noble Lord, Lord Bruce, in considering the matter perhaps more carefully, will find that these arguments echo his own concern regarding the reasonable exercise of discretion by local authorities. I feel that the courts have got it right. As with so many other points that the noble Lord raises on this part of the Bill, I understand his concern that the clearer we get the point, the better it will be. I consider that in this instance, as in some other instances that we have already debated, the position as the courts have it at the moment is about right, and that is why we do not want to accept the amendment.
Lord Bruce of Donington
I am grateful to the noble Lord for his reply. If I may say so, the noble Lord seems to have a touching faith in some of the legal decisions that have been made perhaps in more recent times, in so far as they affect local authorities. That is not a view that is entirely shared in legal circles themselves, nor certainly by those of us on this side of the Committee, and therefore it is desirable that these matters, no matter how difficult they can be to formulate, should be put into the statute.
I take the point made by the noble Lord in so far as previous judgments have been involved. Of course, sometimes the difficulty about judgments in a lower court is that not only can they be upset in the appeal court, but they have been known to be upset by the Judicial Committee of your Lordships' House, not always to universal acclaim. I should still have thought that it is much better to have this point clearly stated in the statute.
We shall have to come to this matter again. Speaking as a non-lawyer, I found the noble Lord's reply quite instructive. I shall examine a little more carefully what he said, and I shall reserve the right to come back perhaps at a later stage with even more precise wording, which I hope will enable me to convince him. In the meantime, I beg leave to withdraw the amendment.
§ Amendment, by leave, withdrawn.
§ Clause 13 agreed to.
§ Clause 14 [Recovery of amount not accounted for etc.]:
§ [Amendment No. 62 not moved.]
§ Clause 14 agreed to.
§ Clause 15 [Fees for audit]:
§ 3.4 p.m.
Viscount Ridley moved Amendment No. 63:
Page 13, line 32, leave out (" shall prescribe ") and insert (" may recommend ").
§ The noble Viscount said: With the leave of the Committee, I should like to take Amendments Nos. 63, 64 and 65 together, since the latter two amendments are consequential on the first amendment. Quite simply, the amendments seek to suggest that in determining the fees to be paid for audit it would be better 959 if the local authority which is being audited were able to negotiate with its auditor the amount of fees which are required, taking into account the amount of work involved and so forth. It would be much more appropriate that the fees should be left to the bodies concerned and the commission should not have the power to prescribe, but merely to recommend, a scale of fees. I beg to move.
§ Baroness Birk
I should like to support the amendment moved by the noble Viscount, Lord Ridley. It is quite a small amendment, but it is an important one because it would leave rather more flexibility, but without opening the gates entirely. In view of the different circumstances that can arise in various authorities, the term "may recommend" seems to be much more sensible than the term "shall prescribe". There is also the rather more complicated problem where there is an extraordinary audit; under the Bill the Secretary of State would retain a power to direct an extraordinary audit if it were desirable in the public interest. The amendments allow the authority to choose its auditor from the approved list maintained by the commission, and the commission would be able to recommend, rather than order, the scale of fees. I should have thought that there would be an advantage for the commission, because there must be occasions when it would prefer to give this kind of balanced advice, rather than acting in a very sharp and perhaps restrictive manner.
§ Lord Bellwin
Amendment No. 63 in the group of amendments would make the fee scale which the commission is required to draw up advisory rather than mandatory, and I agree that this is an important point. The problem is that an advisory fee scale would require the commission or its auditor to negotiate fees in each case, and if the Committee thinks carefully about that, it will see that it would create several problems. It would lead to uncertainty about the commission's income. It would jeopardise sensible budgeting. It might well lead to pressure to cut audit standards as a result of what might be considered short-sighted attempts to decrease audit fees. Negotiating the fee in each and every case would be quite an undertaking.
The present position is that fees are prescribed by scales set by the Secretary of State under Section 163 of the 1972 Act. The Bill continues the concept of a prescribed scale, and Clause 15(4) permits flexibility over fees if an unusual amount of work—larger or smaller than expected—is involved in any case. That is the key point to note—that there is a prescribed scale, as pertains at the present time in other like areas, but with a flexibility if the amount of work involved is greater or less than expected.
Amendment No. 64 is consequential on the proposed change from a mandatory to an advisory scale, and so it would seem is Amendment No. 65, since the provisions of subsections (3) to (7) stem very largely from the mandatory nature of the fee scale. A duty to pay the scale fee, for example, as in subsection (3) would be inappropriate if the fee scale were purely advisory. So I repeat that we feel that an advisory, rather than a mandatory, fee scale would be undesir- 960 able. It would certainly make the commission's task extremely difficult, and the point about standards is something that we should not overlook. This is an important point. I hope that my noble friend will feel able to think about it again and perhaps look at the longer-term implications. If he would care to discuss that with me separately, I should be very willing to do so.
§ Viscount Ridley
I am persuaded—as always—by my noble friend's convincing attitude and I am equally grateful to the noble Baroness, Lady Birk, who put the case so much better than I do. In the circumstances, I wish to withdraw the amendment. I beg leave to do SO.
§ Amendment, by leave, withdrawn.
Lord Bruce of Donington moved Amendment No. 63A:
Page 13, line 34, at end insert ("and in respect of the auditor's responsibilities and attendances as required under sections 11, 13 and 14 above.")
§ The noble Lord said: I am not sure how appropriate it is for a practising chartered accountant to start ventilating the subject of fees in the Committee. It is therefore proper for me to disclose once again, for the avoidance of all doubt, that I am a practising chartered accountant—a partner in the firm of Halpern and Wolf. I sincerely trust that—
Lord Bruce of Donington
I believe in the disclosure being specific for the avoidance of doubt. The purpose of this amendment is to draw attention to the considerable difference that will obtain when this Bill becomes law, and the position as set out in the 1972 Act. The responsibilities of auditors have been significantly enlarged from the area which was formally covered under the Act of 1972. I have already addressed the Committee on numerous aspects of the enlargement. For that reason it would seem that a scale of fees per se on the same lines as the scales of fees previously prescribed under regulation would not be entirely suitable under present arrangements.
The Committee will be aware that under the 1972 Act, the approved auditor, which in practice meant a firm of chartered accountants, or a firm of accountants acting on behalf of local authorities, differed considerably from the position of the district auditor. Now they have been both brought into exactly the same level and with precisely the same function. Moreover, there is a further difference. The significance of any extra time that the district auditors spent by reason of the variations in the time taken in the discharge of various functions would be largely lost because district auditors are remunerated by salary according to a salary scale.
The position is going to be rather different now. May I draw attention not only to the provisions of Clause 8, but also to Clause 11, which will now fall to be dealt with by approved auditors on the same basis as district auditors. If the Committee will refer to Clause 11, it will see that, in addition to performing the normal audit of a local authority or other body, as prescribed in Clause 9, which is an enlargement on previous clauses, the auditor is required to comply with Clause 11. Clause 11 states: 961At each audit by an auditor under this Part of this Act any persons interested may inspect the accounts to be audited and all books, deeds contracts, bills, vouchers and receipts relating to them and make copies of all or any part of the accounts and those other documents".For reasons that the noble Lord knows quite well, while that is done the auditor or one of his staff has to be in attendance. The examination may be quite lengthy and time-consuming. At Clause 11(2) it says that the auditor is required to give an elector the chance to question him and he is required to answer. This once again is completely outside the normal audit process as is generally understood in the profession itself and may once again be very time-consuming.
In some local authorities the publication in the local newspaper of the fact that the accounts of an authority are available for inspection and the auditors are available to answer questions as from a given date to a given date, may attract no interest whatsoever. There may be other advertisements in the paper, not always on the same page as legal notices, which people find more attractive. Some local authorities may indeed "get away with it"—I do not mean it in that sense—nobody ever questioning the auditor at all.
The Committee might consider the case of other local authorities where sometimes political passions have been known to run high, either one way or the other, and a group—one or many—of local electors get very disgruntled with the way things are running. I can envisage a fairly continuous procession of one aggrieved person after the other—whether politically or actually aggrieved—going to the audit office or other prescribed address that is required in the notice and questioning them.
There is the other facility which the auditor has to deal with, of listening to objections. That is under subsection (3) of Clause 11. i emphasise that this is not a procedure to which as a profession anybody is lodging any objection—at any rate not at this particular stage—although there may be overriding political considerations which it is not appropriate to deal with when considering this particular clause. But the events can be time consuming. Certainly—at any rate in my view—they could not be accommodated within the normal scale of fees that is prescribed in the regulations, and notwithstanding the provisions to which the noble Lord referred, which enable the commission in certain circumstances to make special arrangements.
There is also the auditor's responsibility under Clause 13. Clause 13 says:Where it appears to the auditor carrying out the audit of any accounts under this Part of this Act that any item of account is contrary to law he may apply to the court for a declaration … ".This means a court application. Then again, under the same clause, it says:Any person who has made an objection under section 11(3)(a) above and is aggrieved by a decision of an auditor not to apply for a declaration under this section may—(a) not later than six weeks after he has been notified of the decision, require the auditor to state in writing the reasons for his decision … ".I am not suggesting that they will be applicable to every local authority; but they are in the law and they take a considerable amount of time to comply with in addition to the other normal duties. Then there is 962 the obligation which an ordinary auditor is not normally required to deal with under Clause 14 of the Bill. This is the certification of items that are unlawful or should be refunded. The auditor has to state in writing the reasons for making his decision. These are all matters which are additional to the normal sphere of auditing, as it is generally understood commercially.
I am sure that the noble Lord, Lord Mottistone, will agree with me—at least, I hope he will—that, in the public companies with which he is associated, the auditor is present at the annual general meeting, he reads his report and, on very isolated occasions, he has been known to speak a short word in reply. But, normally speaking, an auditor is not required, in the exercise of his normal functions, to go into all these matters which I have ventured to lay before your Lordships. Therefore, the reason for this amendment is to put in specifically that account should be taken of the extra responsibilities and attendances that are required under Clauses 11, 13 and 14.
It may well be that I have not got the wording right, and I said to begin with that this was in the nature of a probing amendment. But it would be for the advantage of the noble Lord's department, for the advantage of local authorities and, indeed, for the advantage of the auditing profession at large, who may conceivably be involved in these matters, if the noble Lord could state his views quite clearly on the points that I have raised. I beg to move.
§ 3.21 p.m.
§ Lord Mottistone
May I briefly intervene to say that I sympathise with the general view which the noble Lord, Lord Bruce, has put forward. I hasten to add that I am not an accountant, and never will be. But I wonder whether, looking more closely at the Bill, he thinks that accountants' interests—because what he is trying to make sure of is that the accountants concerned get the rate for the job—are sufficiently safeguarded by Clause 15(2), under which the commission has to refer to local authorities, who, in this respect, are the employers, and to the accounting bodies who, in this respect, are the trade unions for the accountants. I should have thought that that was a reasonable safeguard, and the extra wording appears to put on a gloss which is not really necessary, as there is quite enough safety written into the clause as it stands.
§ Lord Bellwin
The noble Lord said that this was a probing amendment. I wonder whether I may give him a probing answer. I listened very carefully to what he said and I found it helpful, because when I first looked at the amendment I was not clear as to the precise objective in putting it down. It might help, because one wants to be sure that one is not missing a point here, if I explain the way in which we see the audit fee mechanism working.
Clause 15(1) requires the commission to fix a fee scale, and it may well follow the present practice of devising a scale which varies according to the total income and expenditure of the authority concerned. Clause 15(4) enables the commission to increase or reduce the fee, if there is more or less work involved in a particular audit than was envisaged when the scale was fixed. So if there are objections under 963 Clause 11 which involve an auditor in extra costs, or if an auditor has to spend a lot of time investigating unlawful items of account under Clause 13, or losses caused by wilful misconduct under Clause 14, then the commission can reflect that in the audit fee by virtue of Clause 15(4).
I should have thought that, as my noble friend Lord Mottistone suggested, there was no need to make a specific provision to this effect and that, as it seems to me, is what the amendment appears to do. I say again that, just as the noble Lord wants to consider the point that I make in response, I want to be sure that, arising out of what he said, there is nothing being missed here which ought to be taken up. Clearly, I cannot accept this amendment today, but it is proper that in matters of this kind we should look carefully, and we will.
Lord Bruce of Donington
I am grateful for the noble Lord's reply. As I indicated, the amendment was a probing one. I am sorry that I had to explain it even further in order exactly to elucidate the kind of information which the noble Lord has been kind enough to give. I am grateful for his assurance that he will take a look at it—without commitment, of course. I fully understand that and I beg leave to withdraw the amendment.
§ Amendment, by leave, withdrawn.
§ [Amendments Nos. 64, 65 and 66 not moved.]
§ Clause 15 agreed to.
§ Clause 16 [Extraordinary audit]:
Lord Bruce of Donington had given notice of his intention to move Amendment No. 67:
Page 14, line 25, leave out (" an auditor or auditors appointed by it ") and insert (", at the discretion of the body concerned, either an auditor or auditors appointed by the Commission or an auditor or auditors appointed by that body from the list compiled by the Commission in accordance with section 7(7) above").
§ The noble Lord said: This amendment seeks to deal with the question of extraordinary audit. We are getting a very large number of extensions of audit in this Bill. We have the ordinary audit which is dealt with in Clause 9, and which has already been enlarged quite significantly—
§ The Earl of Avon
Would the noble Lord just give way? I think that he is speaking to Amendment 68, and that No. 67 has been spoken to already.
§ [Amendment No. 67 not moved.]
§ The Deputy Chairman of Committees (The Earl of Listowel)
Before I call Amendment No. 68, I should point out to the Committee that, if this amendment is agreed to, I cannot call No. 69.
§ 3.27 p.m.
Lord Bruce of Donington moved Amendment No. 68:
Page 14, line 34, leave out subsection (2).
The noble Lord said: This amendment seeks to eliminate from Clause 16 subsection (2), which states:
If it appears to the Secretary of State that it is desirable in the public interest that there should be an extraordinary audit of the accounts of any such body as aforesaid he may require the Commission to direct such an audit by an auditor or auditors appointed by it ".
As I have already indicated, the auditing responsibilities thrust either on the district auditors or the auditing profession generally seem to be becoming greatly extended under this Bill. There is provision under Clause 9 for the ordinary audit, which has now been enlarged to include value for money audit—whatever that term may mean; under Clause 16, we now have extraordinary audit; later on in the Bill we shall have a series of inquiries, although whether they are to be audit, comparative studies or something else is not clear, and there is a new Clause 20 which brings even more accountancy examination, in one form or another, upon a local authority.
§ I speak subject to correction, but I should have thought that what was important was whether an auditor—a district auditor or an auditor in a private firm—did his work satisfactorily under Clause 9; and one must assume that the auditing profession does its job thoroughly. As I ventured to draw to your Lordships' attention the other night, an auditor has to be satisfied about a whole series of things, and "satisfied" in legal terms—and, indeed, as it is understood by the accountancy profession—evidently carries more meaning than may generally be thought. If, therefore, an audit has been done satisfactorily under Clause 9, it is difficult to understand the reasons for having this whole series of other inquiries which are spread throughout various parts of the Bill.
§ Once again, they are well within the competence of the accountancy profession and all the six professional bodies. There can be no doubt about that. But I wonder whether we are getting near a situation—and, if I understand the general trend of some of the remarks that have occasionally fallen from the lips of the noble Viscount, Lord Ridley, I think he will probably agree, though I do not give hostages to fortune on that—where there is a danger that local authorities will become very much hedged in with various auditing and accountancy requirements that may suddenly be sprung upon them. I have in mind also the provisions of the Local Government Act 1980 which laid down these very detailed requirements so far as maintenance is concerned; so it is going to be very difficult for local authorities.
§ My general view is that there is a tendency in Her Majesty's Government to overdo it a bit. Perhaps they ought to take a slightly more relaxed attitude towards local authotities. By the insertion of this clause it seems that they are continually on edge lest some particular local authority or local authorities decide to play fast and loose, and all the ingenuity of the Secretary of State for the Environment will be needed to prevent local authorities from going outside all reasonable bounds.
§ I do not like to use the term and I certainly do not use it in the personal sense. My relations with the noble Lord opposite are, I trust, very amiable. However, there seems to be a degree of political paranoia behind this—that unless local authorities are kept under 965 the closest possible supervision—I will not use the term "corsetted" because it is unfashionable—they will not do their job properly. I do not believe that. The noble Lord and his right honourable friend are, I think, taking matters unreasonably far.
§ I do not see the purpose of the extraordinary audit which the noble Lord has in mind, unless—I enter a caveat—some kind of public scandal breaks out in between audit times which demands the most urgent and immediate attention of somebody and therefore an interim audit ought to take place. Those circumstances would justify an extraordinary audit. However, to use the noble Lord's parlance, I should have thought that the ordinary machinery of local government and the long traditions of local government, to which the noble Lord has referred, in those balmy, nostalgic days would be quite sufficient to cover a matter of this kind. I should not have thought it would be necessary to take special powers in the Bill, bearing in mind the very extensive powers that are already in it, some of which we have still to discuss. I beg to move.
§ Lord Bellwin
So far as the extraordinary audit is concerned, may I say that there have been powers in this country to direct extraordinary audits since 1866, so they are nothing new. Nevertheless, I understand that local government is concerned about the Secretary of State's powers in respect of the Audit Commission. I would suggest, however, that the concern is misplaced, not least in the case of the power which we are considering; namely, the power to require extraordinary audits. The power is a proper one. It means that the Secretary of State will be able to respond positively should some matter of public concern arise about a local authority's financial affairs. In such cases one might expect the Audit Commission themselves to respond by directing an extraordinary audit. I would expect this almost always to be so.
The responsibility of deciding whether to direct an extraordinary audit rests upon the commission, as provided for in Clause 10(1). Nonetheless, I think it right that there should be machinery for ensuring that the Secretary of State can himself require an extraordinary audit if special circumstances arise. I do not suggest for one moment that this will happen often, but as a point of principle I bear in mind that the Secretary of State is a Member of Parliament, and I suggest to your Lordships that it is right that the Secretary of State should be able to respond effectively to concern voiced in Parliament.
An extraordinary audit is only about timing. It means making sure that the audit happens earlier and that public objections can be heard earlier than would otherwise be the case. An extraordinary audit does not mean that either the commission or the Secretary of State has any extra power to intervene in the process of audit itself. The auditor will remain independent in the exercise of his judgment. Only he will decide, for example, whether there is anything which requires him to report or to take formal audit action—for example, if he takes the view that there has been illegal expenditure.
For these reasons, I would argue that this is a valuable provision—not one which need give rise to the concern which has been expressed. Of course I recognise the views of the noble Lord, Lord Bruce of Donington, on this point, but I feel that this subsection 966 should remain part of the Bill. As I have already said, the extraordinary audit is no new thing, and it is right that the power should be there. It is only important because of the fact that it is there as a reserve power. Its main force has to do with timing. It has always been so with extraordinary audit, and it will continue to be so. I feel that the concern which has been expressed need not arise.
§ Baroness Birk
This argument seems to me to be quite extraordinary. I would call it almost a "belt and braces" job. The Secretary of State is setting up an Audit Commission which is to be given the widest, strongest and deepest powers that one could imagine; and now to be superimposed are the Secretary of State's extra powers. It seems to me to he both unnecessary and quite wrong.
§ Lord Bellwin
The Secretary of State already has these powers. The fact that there will be an Audit Commission means that the commission will have the power to continue this process. The Secretary of State's position is a fallback position to cover the point I mentioned earlier about the parliamentary questions which may be asked. If we were introducing for the first time an extraordinary audit it would be a different matter, but there is nothing new about this.
Lord Bruce of Donington
I do not want to press the noble Lord, but it is being a little disingenuous to say that the position is exactly the same as before, because it is not. When the Bill becomes law, there will be an Audit Commission which will result in a completely different situation. I would not wish to query the competence of the Audit Commission to make such inquiries as it sees fit. It is going to be a public body of some consequence, and after the various consultations which are going to be conducted in the course of its formation it will undoubtedly comprise a very large number of extremely responsible people who are respected in their professions or occupations, whatever they may be.
What therefore is the case for giving this power to the Secretary of State when there is to be an Audit Commission? Will not the Audit Commission be quite capable of dealing with a question of this kind without the "sledgehammer" of the Secretary of State being there as well? There is no point in disguising the fact that it is no ordinary Secretary of State whom we have at the moment. Gone are the days of the nostalgic relationship with which I am quite sure the noble Lord is well associated and to which he has referred very often in this place and with which we on this side would probably agree. The relationship between the Secretary of State and local authorities is not exactly as cosy as it was in the far off days to which the noble Lord refers. Therefore to give his right honourable friend these powers to require—and the term is imperative—would appear to be outside the normal spirit of legislation which one would expect as between local government and central Government.
The noble Lord has put in his caveat. As I do not have behind me the big battalions, I beg leave to withdraw the amendment.
§ Amendment, by leave, withdrawn.967
§ Lord Sandys
It may be for the convenience of your Lordships that we now take a Statement. I beg to move that the House be now resumed.
§ Moved accordingly, and, on Question, Motion agreed to.
§ House resumed.