My Lords, I start by thanking the noble Lord, Lord Wills, for our useful discussions about Amendments 1 and 2, both after
Committee and again earlier this week. I also acknowledge his commitment to this agenda and the enthusiasm with which he pursues it.
Amendment 1 seeks to give auditors a right to access audit documents of significant contractors to local authorities and to make these available on request. Amendment 2 is concerned with extending freedom of information rules. The debate we have just had has extended over both amendments and, to some extent, I have to answer both amendments, even though the noble Lord chose to separate the two last night.
I acknowledge that there is a wider issue here, as the noble Lord, Lord Beecham, has just said, about the appropriate levels of audit, transparency and accountability for private providers of public services—whether they be for-profit companies, not-for-profit voluntary organisations or others. This issue has grown over the past 25 to 30 years as successive Governments of all parties have outsourced public services, both from the national and from the local level. As the noble Lord, Lord Beecham, pointed out, recent publicity over inadequate performance has heightened public interest and interest in this House, although I should note that almost all the recent cases publicised have been about nationally negotiated contracts, not local contracts. Noble Lords may have noticed that the Atos contract with DWP on work disability assessment included provision for DWP audit. That has now discovered certain weaknesses for which Atos has apologised.
I encourage the noble Lord to pursue this issue further. I will repeat what I said on Report: both Parliament and the Government need to look at this issue in general. With my Cabinet Office hat on I would say that the Cabinet Office is actively looking at the issues of commissioning and contracts and how to make sure that we are raising standards across Whitehall. The new Commissioning Academy, the Government’s champion for the non-profit sector, is part of how we are working at learning from mistakes that have been made, both under this Government and under our predecessor, and raising the level of approach. It would be highly appropriate for Parliament to look at this in parallel with the Government. As I suggested on Report, I encourage the noble Lord, Lord Wills, to consider whether he should bid for a sessional committee, for example, which would examine the changing relationship between non-governmental providers of public services and local authorities and national authorities to see whether we can find consensus across the parties on how we approach this issue.
On the wider issue, nevertheless, I have to say that the case has to be made. I suspect that the noble Lord, Lord Wills, was, in his commitment to greater transparency and freedom of information, in a minority in the previous Government. I recall that the Prime Minister Tony Blair said that the Freedom of Information Act was the biggest mistake that they had made. I share, as do all those in my party, a commitment to transparency in government, and the coalition Government have done their best to extend transparency. In many ways, however, there is rather further to go, particularly when one comes to the relations between the private sector and the public sector—the private for-profit
sector, which pleads commercial sensitivity and additional costs from the extension of the sort of transparency and audit which the noble Lord is approving.
This specific amendment is not necessary because the Bill already gives these powers to local auditors. Clause 21 enables local auditors to access whatever documents and information they think are necessary to undertake their functions under the Bill. That includes documents held by local authorities’ contractors if the auditors consider that these are necessary in order to undertake their functions. That covers all the functions in the Bill, not just the audit of the financial statement but all the additional functions that are unique to local public audit such as the consideration of questions and objections from the local electorate and the issue of public interest reports. Schedule 11 to the Bill also includes provisions which enable local auditors to disclose information necessary to answer those questions and objections. The Government’s code of recommended practice for local authorities on data transparency recommends a minimum set of data to be published locally. All local authorities now publish expenditure over £500 and many publish their contracts. No audit firms have yet indicated that the current access rights are inadequate or lacking.
That being the case, I argue—I hope the noble Lord recognises that I do not argue the resistance to his amendment primarily on cost grounds—that the case is not made on this amendment. We all recognise that there is a wider issue about the overall transformation over the past 25 years of the relationship between government as provider of funds and the private, profit and non-profit sectors as the provider of those services in return for funds. However, I agree strongly with my noble friend Lord Palmer of Childs Hill, who said that much of this is covered in the contractual relationship. We are all learning about how to improve that contractual relationship. The Government, particularly within the Cabinet Office, are working on how to extend best practice across the Government nationally as well as assisting local authorities. Having given all of those assurances, I hope that the noble Lord feels able to withdraw his amendment on the condition that we will continue to discuss and examine this very broad issue.