Local Government and Public Involvement in Health Bill

That would depend on the nature of the contract between the local authority and the body. That is an extremely important point and it is why we propose to bring in the CIPFA regulations on accounting practice. Local authority treasurers must abide by accounting practice and they get their guidance from CIPFA. Annex 1 to the regulations—““Definitions in relation to group accounts””—is very specific on the points that the hon. Gentleman raised. I congratulate him on spotting the essence of the argument, which centres on where liability and control lie. The definition in annex 1 is:"““An entity other than a subsidiary or joint venture in which the reporting authority has a participating interest and over whose operating and financial policies the reporting authority is able to exercise significant influence.””" He will be familiar with the fact that the definition of ““control””, ““ownership”” and ““connected with”” depends on the degree of control, whether it be through ownership, part ownership or control through contract or other such arrangements. The provision is designed to stop local authorities overreaching and thereby to protect the public purse. The hon. Member for Bromley and Chislehurst (Robert Neill) asked about scrutiny. The definitions provided by accounting practice will translate into the definitions of scrutiny. He will remember that under the part of the Bill that deals with overview and scrutiny, it can be the contract that is scrutinised rather than the body itself. The provisions relate to what I have described as proprietary controls. The financial controls are covered not only by this part of the Bill, but by the Local Government Act 2003, which defines the new prudential borrowing arrangements. I hope that the House has not fallen asleep. These are important matters for local authorities. Question put and agreed to. Clause read a Second time, and added to the Bill.