§ 6.57 p.m.
§ The Parliamentary Under-Secretary of State, Northern Ireland Office (Lord Lyell) rose to move, That the draft order laid before the House on 10th February be approved.
§ The noble Lord said: My Lords, I beg to move that the draft Audit (Northern Ireland) Order 1987 be approved. The draft order deals with the role of the Comptroller and Auditor General for Northern Ireland and the principle of accountability in the use of public funds. The effect of the draft order would be to restore the traditional position which, until the introduction of the National Audit Act 1983, meant that the principles governing public accountability in Great Britain applied equally to Northern Ireland.
§ At present the main Northern Ireland audit legislation is the Exchequer and Audit (Northern Ireland) Act 1921 which is modelled on Westminster statutes, in particular the Exchequer and Audit Departments Acts of 1886 and 1921. In restoring the traditional legislative link between the two parts of the United Kingdom we are simply acknowledging that the roles of the two Comptrollers and Auditors General, and the work undertaken by their respective staffs, is identical in all major respects.582
§ The order has three main purposes. First, it will establish a Northern Ireland Audit Office along the lines of the National Audit Office, headed by the Comptroller and Auditor General and staffed by personnel who are not civil servants. This new audit office will assume all the functions presently exercised by the Exchequer and Audit Department. Secondly, the order will provide statutory authority for those economy, efficiency and effectiveness audits which the Comptroller and Auditor General presently undertakes on an extra statutory basis. The order will also give him complete discretion, subject to any other statutory requirements, in carrying out his duties and in particular in regard to these value for money examinations. Thirdly, the order makes new arrangements for determining the Comptroller and Auditor General's salary.
§ While these measures go a long way towards bringing Northern Ireland into line with Great Britain, there are a number of provisions in the National Audit Act which cannot be replicated in Northern Ireland by means of an Order in Council. They deal with the Public Accounts Commission and the Committee of Public Accounts and relate to the appointment and role of the Comptroller and Auditor General, the approval of the estimates of the National Audit Office and the appointment of its accounting officer and auditor: Finally, they relate to the role of the Public Accounts Committee in advising the Comptroller and Auditor General on his conduct of value for money audits.
§ To apply these provisions to Northern Ireland would require primary legislation to amend the Northern Ireland Constitution Act 1973. The draft order mirrors the National Audit Act as far as possible but at the same time it leaves open the opportunity for a future Assembly, with devolved authority, to exercise control over its own audit arrangements.
§ I now turn to the articles contained in Part II of the draft order. Article 3 gives the Comptroller and Auditor General complete discretion in carrying out his duties, particularly in regard to the audits he conducts under Part III. Article 4 makes provision for the salary and pension to be paid to the Comptroller and Auditor General. This reflects the equivalent provision for Great Britain in Section I of the Exchequer and Audit Departments Act 1957. I am able to inform your Lordships that this 1957 Act is amended by Section 6 of the Parliamentary and Other Pensions and Salaries Act 1976. All this provides for the Comptroller and Auditor General to be paid a salary linked to that of the permanent secretaries of the Northern Ireland departments whose accounts he audits.
§ Article 5 establishes the Northern Ireland Audit Office and with Schedule I provides for the terms and conditions for staff appointed to the Audit Office. Article 6 provides for the financing of the office and its estimates and, with Schedule 2, for the auditing of its accounts. Article 7 allows the Comptroller and Auditor General in certain circumstances to charge a fee for his services.
§ Article 8, under Part III of the order, deals with economy, efficiency and effectiveness examinations. Article 8 gives the Comptroller and Auditor General 583 power to carry out such examinations in those authorities whose accounts he presently examines under statute or, alternatively, under the terms of an agreement between the authority and a department in Northern Ireland. This will regulate the present position in which the comptroller has to carry out the examinations on an extra statutory basis. In line with the National Audit Act, however, the comptroller would not be entitled to question the merits of the policy objectives of any body whose accounts he audits under this part of the order.
§ Article 9 extends the conduct of efficiency audits to other bodies which the comptroller considers have received more than half their income in any financial year from public funds. I draw your Lordships' attention to paragraph (4) of Article 9 which exempts certain bodies from the terms of this article. This is parallel to those excluded by Schedule 4 of the National Audit Act. Article 10 allows the Comptroller access to whatever documents he requires to carry out his examinations under Articles 8 and 9. Article 11 is permissive, allowing the comptroller to report the results of his audits to another place or, where appropriate, the Northern Ireland Assembly.
§ Part IV makes some technical and consequential changes. These changes remove from the Department of Finance and Personnel its power to prescribe the form of the appropriation accounts and to direct the comptroller on how to undertake his duties. These technical and consequential changes allow the department to continue to require the audit of certain accounts, but only by statutory rule.
§ The Government wish to place the Northern Ireland Comptroller and Auditor General in a situation analogous to that of his counterpart in Great Britain. We have therefore agreed with the Public Accounts Committee and the Public Accounts Commission certain non-statutory arrangements to complement the proposed order. The Northern Ireland Comptroller and Auditor General will still be appointed by Her Majesty under Section 36 of the Northern Ireland Constitution Act 1973. Within this constitutional process, however, the chairman of the Committee of Public Accounts will have a role similar to that which he exercises under Section 1 of the National Audit Act. The appointments of accounting officer and auditor to the new audit office will be made formally by the Department of Finance and Personnel on the nomination of the Public Accounts Commission.
§ The commission has also been assured that the Estimates of the Northern Ireland Audit Office when laid by the Secretary of State will be laid as approved by the commission without any government amendments. Government advice on the Estimates will be submitted to the commission at an earlier stage, together with any advice of the Committee of Public Accounts. That is found under Section 4 of the 1983 Act. The comptroller himself has undertaken to the Public Accounts Committee that when he exercises his discretion in relation to value for money audits he will be mindful of any proposals made to him by that committee.584
§ All of those who have been most closely involved in these matters now before us have been fully consulted on the provisions contained in this order. The draft before us this evening, together with the non-statutory arrangements I have outlined, represent a widely agreed approach to re-establishing uniformity of audit principle and practice throughout the United Kingdom. With that, I commend the order to the House. I beg to move.
§ Moved, That the draft order laid before the House on 10th February be approved.—(Lord Lyell.)
§ Lord Prys-Davies
My Lords, as the noble Lord has just explained, this is yet another draft order which seeks to approximate the law in Northern Ireland more closely with the law in Great Britain. It makes sense that there should be uniformity of audit principles, though not necessarily of audit arrangements, between Northern Ireland and Great Britain. Although the order is modelled on the National Audit Act 1983, which set up the National Audit Office, its provisions in a number of respects are not identical with those contained in the 1983 Act. Indeed, the Minister has already referred to the differences.
The Minister also explained that whether there should be full integration with the Great Britain arrangements is a matter which the Government have decided should be left to a future Assembly with devolved authority. From that we conclude that the Government still consider that an effective Assembly with devolved authority may yet be established in the foreseeable future. That is encouraging news.
Therefore, the order will establish the Northern Ireland Audit Office which will take over the functions of the existing Exchequer and Audit Department. I understand that about 95 people are employed within the existing department and that many, but not all, are members of the Northern Ireland Civil Service. However, we have been told by the Minister that the staff of the new audit office will be non-civil servants. Does this mean that the existing staff could lose their status? If that is so, the effect of the order could be unsettling for some or all of the staff currently employed in the Exchequer and Audit Department. Therefore from these Benches we must ask the Minister to assure the House that the interests of the staff who will be affected by this order are being properly safeguarded.
The Minister told the House that the staff or their union had been fully consulted. The union representing staff employed in the Exchequer and Audit Department is the Northern Ireland Public Services Alliance. We know that the union was worried about the proposals in their original form as published at the end of last year and I understand that some amendments were made to meet the objections that were then voiced by the union. I should be grateful if the Minister will confirm whether the order that is now before the House is acceptable to the union or whether outstanding issues remain. If there are issues which have not yet been resolved I should be grateful if the Minister will identify them.
Some of the staff currently employed will be entitled under Paragraph 5(2)(b) of the schedule to request—and I underline the word "request"—within 585 a period of three years from the appointed day that the Comptroller and Auditor General shall transfer them back to the Northern Ireland Civil Service. It is possible that in the light of their experience in the new Audit Office some may wish to avail themselves of that facility, but on the face of the order it is not clear that the staff to whom the paragraph is addressed will have a legally enforceable right to return to the Northern Ireland Civil Service. That is a matter of some concern. The right is merely a right to request the Comptroller and Auditor General to seek to make arrangements for their return.
The key words therefore are "to request" and "to seek to make arrangements". Nowhere in the order have I seen a correlative duty placed on the Northern Ireland Civil Service to find the applicant a place within the Civil Service. If it were intended to give the staff concerned the legal right to be transferred to the Civil Service, surely that should have been spelt out in the order and a correlative duty placed upon the Northern Ireland Civil Service.
Of course it is too late to redraw the order. Therefore I ask the Minister, if the intention is that they should have the right to be transferred to the Civil Service, how will that transfer be dealt with? Will it be covered by another administrative arrangement? Or is it the case that it was never intended that they should have the right to transfer to the Northern Ireland Civil Service?
There is one other point to which I should like to refer. Three years after the appointed day the Audit Office staff will become non-civil servants. They will be isolated from the Northern Ireland Civil Service. They will number no more than 95, whereas I understand that the national Audit Office in Great Britain employs about 1,000 staff. Will the Northern Ireland Audit Office on its own, standing apart from the Northern Ireland office, be capable of providing an adequate career and promotion structure for its staff? Will the Minister give the House a reassuring reply to that question? I should be grateful if the Minister could answer the few questions that I have addressed to the Government, but the order as a whole receives our support.
§ Lord Hampton
My Lords, I should like to say quite briefly that we support this order. As the Minister said, the intention is largely to bring the situation in Northern Ireland into line with that in the rest of the United Kingdom. He also mentioned that he hoped that the situation would be dealt with further by a future Northern Ireland Assembly. We are very glad to hear that there is such talk, as the noble Lord, Lord Prys-Davies, mentioned.
§ 7.15 p.m.
§ Lord Blease
My Lords, I support this order and welcome the constitutional principles and the structure upon which the order is based; namely, the 1974 Northern Ireland Act, which has already been mentioned by my noble friend on the Front Bench Lord Prys-Davies. I consider that the proposed legislation is timely and in keeping with current developments as well as the objectives and standards of performance set by public service management. 586 Those objectives and standards seek to achieve efficiency and effectiveness in the use of resources as well as probity and accountability in the use of public funds.
Having set out those principles, I think it is important to bear in mind that, while the principles are enshrined in the general objectives, they must be carried into effect by expert personnel in the appointed Audit Office. With that thought in mind I reinforce (if that is the proper word to use) or support the views and the concern expressed from these Benches by my noble friend Lord Prys-Davies. We are aware of the anxiety suffered by some of the staff, as put forward in document form and in negotiations by the union which represents them, the Northern Ireland Public Service Alliance. My noble friend Lord Prys-Davies has covered that issue in detail and has asked very pertinent questions that require precise and detailed answers.
We are aware that during negotiations there was an acknowledgment by the department that six members of staff in the Exchequer and Audit Department were not covered appropriately, and a declaration was drawn up by the Comptroller and Auditor General, Mr. Calvert, and the Permanent Secretary to the Department of Finance, Dr. Quigley. These are two very honourable men who are noted for their ideals in respect of industrial relations in Northern Ireland. Certainly I consider that document will be honoured to the hilt. The point is that there are perhaps 25 others apart from those six members of staff who are not covered by such a declaration.
Finally in my closing remarks perhaps I may just mention that the whole concept of audit has changed considerably in the public mind and so indeed has the expertise required in dealing with public management, public funds and public service work. I feel that it would be wrong for the Northern Ireland Audit Office to become isolated from the general public service arrangements throughout Northern Ireland or to lose the opportunities for staff to exchange between national and local government, because in operating with local government and with other agencies throughout the Province and throughout the United Kingdom expertise and understanding can be gleaned about what motivates, what activates and what are the general objectives in social and economic and perhaps also in political terms.
Therefore I hope that in setting up its staff and becoming a separate entity within the Northern Ireland context, the Audit Office will not isolate itself from an exchange of management and staff moving into other forms of operation. I hope that Northern Ireland civil servants will have the opportunity freely to move to and from the Audit Office.
When the national Audit Office was established, it found it necessary to publish a pamphlet outlining its mode of operation and objectives. A new office is being set up in Northern Ireland which will have an impact on the general business world and public service problems in the Province. I invite the Minister to consider suggesting to his colleagues that there is a need soon to produce a pamphlet or some public document to explain the aims and structure of this public office. I understand that the national Audit 587 Office can trace its history to 1314. In Northern Ireland, the Comptroller and Auditor General can be traced back to legislation passed in 1921. From a historical point of view and to give information and promote understanding of what the Audit Office seeks to achieve, it is important that such a leaflet should be published soon.
§ Lord Lyell
My Lords, I am sure that we are all grateful to the three noble Lords who have spoken and who have studied this rather complicated and, as the noble Lord, Lord Blease, said, technical little order. I admit that I found it technical. I had some experience of being an auditor in the distant past as part of my professional training. I had to ferret out facts and seek to establish truth. The principle behind the Audit Office and what it seeks to achieve has been spelt out in the order.
I am grateful for the welcome given to the order by all noble Lords who spoke. The noble Lord, Lord Prys-Davies, rightly picked up questions about the transfer of the staff of the Exchequer and Audit Department to the new office. That is dealt with in Schedule 1, Part II, paragraph 5(1). The noble Lord's main query, apart from the unions' outstanding problems, to which I shall return, related to the guarantee. He suggested that there should be a legally enforceable provision. He asked whether any transfer request from the Exchequer and Audit Department would be legally enforceable. The noble Lords, Lord Prys-Davies and Lord Blease, will agree that it would not be practicable to guarantee that everyone who sought a transfer from the Northern Ireland Audit Office to a Northern Ireland department of the Civil Service would have his request met.
When I use the terms "guarantee" and "have his request met", I am not trying to be a lawyer. We have to cover against 100 per cent. of requests being met. It would not be practicable to guarantee that, any more than that an officer of the Exchequer and Audit Department, which is part of the Civil Service, would be given such a guarantee. It is important to say that the conditions will be the same as the normal Civil Service conditions of employment which apply at the moment. I would not use the word "guarantee", but all reasonable efforts will be made to facilitate requests such as the noble Lord has mentioned.
The noble Lords, Lord Prys-Davies and Lord Blease, will appreciate that if a member of the Audit Office sought to transfer to another department, for whatever reason, a replacement would have to be sought. As noble Lords will understand, not every civil servant would be able to fit in to the Audit Office immediately. I do not think that that would stand in the way of any reasonable effort being made. "Reasonable effort" are the two words that I stress to facilitate any request for a transfer from a member of the department or the office, as it will be next month.
It is important to note that staff of the new Audit Office will be able to apply for departmental trawl, as it is called. That sounds somewhat odd, but I am given to understand that that is the term used. When a new post requires filling, suitable candidates from all over the Northern Ireland Civil Service are sought. I understand that such trawls will apply to the Northern 588 Ireland Audit Office as they apply to the department at present. I hope that the undertaking that trawls will apply to members of the new Audit Office and to the present department, as they have in the past, will meet the query justifiably raised by the noble Lords, Lord Prys-Davies and Lord Blease.
The noble Lord, Lord Prys-Davies, also asked me to give an undertaking that there are no outstanding problems with the unions. As I understand it, there are no outstanding problems. Again, I cannot give a 100 per cent. watertight guarantee. I understand that all major problems have been overcome. If there is any outstanding difficulty, it will be settled through the normal channels. The noble Lord also drew my attention to Schedule 1, Part II, paragraph 5. He will find that paragraph 5(2) (a) and (b)places members of the Audit Office on the same basis' as any other Northern Ireland civil servant. I assure the noble Lord, who asked about the power of the Comptroller and Auditor General, that he will be able to have sufficient staff. If the noble Lord glances at the provision relating to the appointment of staff in Schedule 1, Part II, paragraph 2, he will find that the Comptroller and Auditor General has power to recruit such staff,as he considers necessary for assisting him in the discharge of his functions".We are grateful for the close study, as always, of the order made by the noble Lord, Lord Hampton. We appreciate that this is a technical subject. The noble Lord, Lord Blease, clearly has also studied the order. He drew attention to staff requests. He mentioned the figures 25 and 6 in relation to members of the staff. I had some difficulty identifying who those members were, what type of work they did and why they were separately categorised in these numbers. The noble Lord drew attention to a declaration made by the permanent secretary of the Department of Finance and Personnel and the current head of the Exchequer and Audit Department. He used some very nice terms about them.
I wish to stress that the Government stand absolutely by that declaration. I understand that I should not use the term "statutory declaration". I can use only my forceful words from this position. I hope that the noble Lords, Lord Blease and Lord Prys-Davies, will hear those words and that they will be conveyed to anyone in Northern Ireland who is worried. I understand that the declaration referred to a fairly small number of people. They did not meet the exact requirements of paragraph 5(2) (b) for some reason. It was a question of what was a transfer. I understand that this declaration will have the wholehearted support of the Government.
The noble Lord, Lord Blease, also queried the exchange of staff. Any exchange of staff with outside bodies would be a matter for the Northern Ireland Audit Office under the comptroller. We would certainly welcome that. The issue of information would be under the aegis of the comptroller, The new office will not be the responsibility of any Minister. It will, however, be entirely independent of the Government. I note the request of the noble Lord. I ought to have been aware of any pamphlets that are available in Great Britain under the 1983 Act. However, I undertake to see what we can do. If there 589 is any active step that we can take I shall be in touch with him. I shall conduct my own trawl.
The noble Lord also raised the question of these two separate groups among the officers of the Exchequer and Audit Department. He mentioned the figure of 25. This group were recruited to train as audit special-ists. They were recruited on special terms and conditions of service which give them no rights of transfer at present—I stress those two words—to other Northern Ireland departments. The continuation of their employment in the Exchequer and Audit Department was conditional upon their obtaining a specific professional qualification—I understand that it was an accountancy qualification—which would entirely equip them for service in the Northern Ireland Exchequer and Audit Department.
The noble Lord will realise the other side of the coin. With these professional qualifications promotion within that department would not be guaranteed but it would be likely. As he may agree, the reverse side is that one cannot justify giving these people rights retrospectively which they did not previously possess. However, I stress what I said before. They will continue to enjoy the right to apply for posts in the Northern Ireland Civil Service which are so-called trawled.
The noble Lord also raised the question of a few other members—I believe that it was up to six, but the number may be more or less—whom this declaration concerned. There was no intention to exclude them. When the error in the drafting of the order was discovered we regret that it was too late to rectify it and this declaration was sought and obtained. I shall not say anything further on that. I have already given our undertaking. I stress again with regard to this group of officers that the same guarantee about trawl applies. They too will be covered by the trawls. If they wished to apply, were in a suitable category to go to another office and met all the requirements, we could say in my noble friend's terms of 10 years ago that they are on all fours with any other members of the Northern Ireland Civil Service.
We appreciate the care that has been taken in studying the contents of the order before us this evening. I hope that I have been able to reassure the noble Lords, Lord Blease and Lord Prys-Davies, about the members of the existing Exchequer and Audit Department—the six, the 25 and others. I hope that there are no serious problems which would cause us to lose one second of sleep with regard to the unions. If there are, I shall certainly check these matters. But I venture to consider that any of the problems can and will be resolved through the usual channels. I do not see any great enthusiasm from noble Lords to hear further comments from me. I commend the draft order to the House.
§ On Question, Motion agreed to.