I will respond first to the new clauses tabled by the hon. Member for Corby (Andy Sawford) before addressing those tabled by the hon. Member for Hayes and Harlington (John McDonnell). I will then consider the Government amendments in this group.
New clauses 1 and 2 and amendments 13 and 12 cover familiar ground which, as the hon. Member for Corby noted, we debated at some length in Committee. New clause 1 returns to the issue of integrated audit and seeks to enable auditors to work across local authorities with the National Audit Office. I support the principle of audits being undertaken efficiently and effectively, but I do not consider that the new clauses are the right approach, or that they are necessary to support bodies in working jointly or sharing services or budgets.
The public audit framework is designed to provide assurance about how each public body has used its resources. Individual public bodies are separately accountable, and because each is accountable for its decisions and expenditure, every one is required to produce a set of accounts and have an independent audit. I do not believe that the current accountability structure prevents local auditors from auditing relevant authorities cost effectively, or that it prevents authorities from working together to share services or budgets. The requirement to have a separate audit has not been highlighted as a problem in the four areas with which the Government have been working to explore service transformation and joint working via a community budget. Neither did the Public Accounts Committee raise external audit as a barrier in its report on integrated working by Government Departments and via community budgets.
Auditors are already required by the code of audit practice to have regard to partnership working that local government and health service bodies operate, to share information and co-operate with other auditors, and to minimise the burden of regulation on audited bodies. The Financial Reporting Council’s auditing standards also state that auditors should rely on the work of other auditors where appropriate, and guidance is available to support auditors making that judgment.
The National Audit Office supports Parliament to hold Government Departments to account. It does not have a role in auditing expenditure by local public bodies, and it does not wish to have one. The NAO already carries out a number of national value-for-money examinations under existing legislation, and the Bill broadens its powers to enable it to examine all or groups of relevant authorities. That will enable a more end-to-end view on the use of public money. It will not enable the NAO to undertake examinations of individual authorities, but it will be able to look at any thematic or systemic issues across a number of relevant authorities. For those reasons, we consider that the new clause is not needed.
There has been a lot of discussion about provisions in new clause 2, both in the other place and in Committee. As I said in Committee, we believe the new clause is not necessary to enable auditors to access all the information they need because the Bill already does that. Clause 22 mirrors the provision in the Audit Commission Act 1998, and enables auditors to access every document they need in order to undertake their statutory functions.
That includes all documents held by local authority contractors which the auditor considers necessary to undertake an audit.
The Government also believe that it is not necessary to apply the Freedom of Information Act to documents an auditor has obtained from a contractor. Rather than extending that Act to documents an auditor has obtained from a contractor, the Government’s preferred approach is through the transparency agenda, existing rights of local people, and our planned revision to the freedom of information code of guidance. Local people can already access information about contracts. The Bill maintains local people’s current extensive rights to inspect detailed accounts, accounting records and audit information, and to ask the auditor questions and raise objections. Those rights enable local people to access more information than the proposed new clause would enable.