My Lords, I am grateful to the noble Earl, Lord Lytton, for moving his amendment, to which I have added my name. I endorse all that he said and, in deference to the Grand Committee, I will not repeat it; I will simply add a number of points.
The amendments of course come at the instigation of the Local Government Association, but reflect fairly widespread concern, based upon experience with the Audit Commission, about what is termed “mission creep”. Most, or perhaps all, of us would agree that the Audit Commission started very well. It did some very good work and continued to do so, but its mission and role expanded to such an extent that the Government, without too much objection elsewhere, has determined that it has now reached the end of its useful life. There is concern, whether well founded or not only time will tell, that the same experience could come to the National Audit Office—that having now got the limited role that was intended, over time, just as with the Audit Commission, the mission will expand.
I have had a useful briefing from the National Audit Office. It was mostly factual and very reassuring. Paragraph 2 states:
“The NAO considers that any future responsibilities it takes on within the Government’s new framework for local public audit should … align with the NAO’s core role of providing assurance to Parliament and holding Government to account over its use of resources”.
That is the intention behind Amendment 18ZA: to try to give effect to that. It may not be the best way of doing so; I do not know. However, the intention is there to say that if the NAO’s role is to Parliament in respect of the use of government resources, then those resources which are raised locally—which in some authorities are considerable; it varies—are outside the core role of the NAO as defined by Parliament and repeated by the NAO itself.
4.15 pm
The NAO goes on in paragraph 7 to address what it describes as “Mission creep”, and give a fair measure of reassurance, including the fact that there is a local government reference panel chaired by the chief executive of the LGA that discusses and advises on future studies with a local focus, and considers progress and emerging findings on work under way. It is still very early days and we do not yet know how well and how effective that will be, but the intention is obviously quite right. But then it goes on, in the same section under “Mission creep”, to state:
“Additional limitations, regarding, for example, a maximum number of studies, or the types of public funds that can be examined, would undermine the C&AG’s independence, introduce inconsistency and further complexity to the Bill, and make the utilisation of powers inefficient and potentially unworkable in practice”.
That is the first point at which I part with the NAO, and that is exactly what gives rise to the concern being expressed in local government circles. It goes on to say that,
“the NAO is committed to the development of a Memorandum of Understanding with the Local Government Association to set out the operational framework”,
and that is currently with the LGA for comment. I do not know if the Minister is in a position today to tell us how that is going. It is a matter primarily between the NAO and the LGA.
I think that it is that concern, which is actually expressed well down in section 7 of the briefing, that gives rise to our concern—although I am sure mission creep is not the intention—that exactly the same would have been said in the early days of the Audit Commission. It crept and it crept to such an extent that we are now legislating to abolish it. We do not want that to happen with the NAO. What we are seeking here is perhaps to amend the Bill, but most certainly to have a discussion on how best, while considering the Bill, we can ensure that that does not happen in years to come.