HL Deb 06 February 2003 vol 644 cc48-9WA
Baroness Billingham

asked Her Majesty's Government:

Whether they propose to grant new statutory powers to the Comptroller and Auditor-General. [HL1515]

Lord McIntosh of Haringey

The Government set out their policy on audit and access powers for the Comptroller and Auditor-General (C&AG) in our response, published on 13 March 2002 (Cm 5456), to Lord Sharman's report Audit and Accountability in Central Government. The Government stated their intention to make two orders under the Government Resources and Accounts Act 2000 (GRAA). The orders have been laid before Parliament today. following the completion of a consultation process seeking the views of those bodies and individuals affected by the orders. The orders reflect the outcome of the consultation exercise.

The first order provides for the C&AG to become the statutory auditor of those non-departmental public bodies (NDPBs) that are currently audited by private firms or where the C&AG is currently appointed by agreement (other than companies). The order includes a schedule listing the bodies affected and sets out the legislation that is being amended and the amendments to be made. The Government accepted Lord Sharman's recommendation that the C&AG would take over the audit responsibility as existing contracts with auditors expire. NDPBs which are also companies and which need to be audited by a Companies Act auditor are not included in this order. Further legislative changes will be needed to remove statutory barriers that currently mean that the C&AG cannot carry out Companies Act audits.

The second order provides the C&AG with statutory access rights, for the purpose of his audit of government accounts and the accounts of NDPBs, to bodies and individuals in receipt of grant, registered social landlords, train operating companies and bodies contracted or subcontracted to provide goods and/or services to government and NDPBs, and to Entrust (the regulator of the Landfill Tax Credit Scheme) where the existing non-statutory access will be made statutory under the terms of the Government's response to Lord Sharman's report.

A regulatory impact assessment (RIA) setting out the impact the orders are expected to have on bodies and individuals potentially affected by them has been deposited today in the Libraries of both Houses. The RIA notes that the impact of the orders is not expected to be significant, with the overall cost of the new arrangements expected to be broadly the same as if the current arrangements had continued. It acknowledges that the new arrangements may not be completely without cost in each individual case. However, the RIA concludes that, in the light of assurances given by the C&AG, the Government are satisfied that on balance the advantages and disadvantages of these arrangements add up to a clear and continuing net gain for Parliament and the public.

It is the Government's further intention that the C&AG should have access on a non-statutory basis for his value for money (VFM) examinations to the same bodies as are designated under the order in respect of his financial audit functions. Access to such bodies would not be for the purpose of conducting a VFM examination of the bodies themselves; the access would be exercised solely in connection with VFM examinations of public sector bodies. The Government will provide this access through conditions on the award of grants, conditions in contracts and other agreements as appropriate.