My Lords, let me welcome the Minister, the noble Baroness, Lady Stowell, to her first, and probably last, foray into the delights of the Bill. I am sure, deep down, she regrets not having had the opportunity to be engaged in our earlier detailed debates.
Perhaps, before a more detailed comment on this group of Commons amendments, I should acknowledge that much of what is before us this afternoon springs from matters that were pressed on the Government by noble Lords—Lib Dems, as well as ourselves and others. Like others, we pay tribute to the noble Baroness, Lady Hanham, for the way in which she was receptive to these matters and to the Government for fulfilling the commitments made by that Minister.
These amendments also bear the hallmark of the diligence of my honourable friend Andy Sawford in another place. A key amendment in this group is Amendment 17, which as the Minister has explained gives the Secretary of State the power to introduce regulations for the development of a sector-led approach to collective procurement. Amendment 31 properly requires the regulations to follow the affirmative procedure.
The retention of a collective procurement capability was one of the major issues that we debated. Of course, the detail of what might be forthcoming will have to await the regulations. It was pressed, among others, by the LGA and the National Association of Local Councils. This impetus was driven by the significant savings that the Audit Commission had achieved in its outsourcing of audit contracts. Of course, the contracts in question run to 2017 and can be extended. I do not know whether the Minister can confirm, under these proposed arrangements, who will make the decision about the extension of those contracts. Any different arrangements will happen some time in the future.
It is understood that the Government’s position is that they will not themselves use these regulations to set up another entity, but will respond to any sector-led approach that might arise. Discussions have already taken place with the LGA.
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We are pleased to support these amendments because they keep alive the prospect of further collective procurement of audit services in the future. Clearly, the appetite to engage in collective procurement will be influenced by the balance of power in the market in the future—how competitive the audit market actually is and how many firms will participate, as well as how local authorities, particularly smaller ones, engage with what can be a sophisticated process.
There are other matters which neither this nor any other government arrangement addresses, covering how the existing outsourced audit contracts are to be maintained after the demise of the Audit Commission, the future of the value-for-money profiles and the Audit Commission’s current certification obligations. We have still not had satisfactory answers after pressing these questions throughout the various stages of the Bill. Perhaps the Minister can help us further today.
We accept that Amendments 1, 2, 3, and 13 make minor necessary changes consequent on Amendment 17. In doing so, they obviate our concerns on the original drafting of Clause 4(1)(b). We understand
that Amendments 4 to 12 make minor changes to the provisions for the modified arrangements already provided for in the Bill for smaller authorities.
Other than consistency of drafting with Amendment 17, it is unclear whether Amendment 6 is in any way intended to change or narrow who might be appointed auditors of smaller authorities. Perhaps the Minister can clarify that.
Amendment 7 updates the function that might be conferred on a person under the smaller authorities’ provisions, but in doing so deletes any reference to the power to specify fees or a scale of fees. Can the Minister please confirm that such functions are accepted as included within the functions set out in Amendment 7, especially as Amendment 8 does not specifically refer to consulting on the scale of fees?
Amendment 14, requiring the term of an auditor’s appointment to be published together with other details, is a matter that we pressed in Committee and my honourable friend Andy Sawford argued convincingly in another place. We are grateful to the Government for their acceptance of this.
All in all, this group of amendments is generally to be welcomed. We are pleased to support them.