Local Audit and Accountability Bill [HL]

Debate between Baroness Eaton and Lord Tope

Wednesday 17th July 2013 Lords Chamber

[Lord Tope]

Before the Minister sits down, I ask her to comment, as she seems to have forgotten to do so, on the reported comments of the Secretary of State that this requirement will be phased out within two years. He was quoted as saying this by I think three or four Conservative councillors separately, while Brandon Lewis, the Minister, has similarly indicated that the Government intend to change the statutory requirement as a quid pro quo for the legislation that we are in the process of passing. Can the Minister not end this uncertainty now and give us some certainty on what the Government’s intentions are and when they are going to be implemented?

[Baroness Eaton]

My Lords, I apologise for not being here at the beginning of the debate. An issue that concerns me about statutory notices being advertised in newspapers is that in some of our larger cities there are large communities that have no language to read a local newspaper. It can be very helpful when the council passes out information in appropriate languages, and I do not think that any of the debate we have had so far has given any indication of how this is to be communicated to very large sections of larger cities’ communities.

Local Audit and Accountability Bill [HL]

Debate between Baroness Eaton and Lord Tope

Wednesday 19th June 2013 Grand Committee

[Baroness Eaton]

I find it somewhat surprising that there is this perceived idea of auditors being too cosy with their client, a local authority, because all the probity and requirements of audit mean that they would be being professionally negligent if they did not do the job they are supposed to be doing. I really do not think that this is quite as much of an issue as the noble Lord, Lord Beecham, is suggesting.

[Lord Tope]

My Lords, I am struggling to understand the implications of what the noble Lord, Lord Beecham, is proposing. I think we all share his concern—I accept that it might not always be a widespread concern—that sometimes, maybe after five years, it could become too cosy. I hope we would all accept that a tendering process after five years is certainly desirable; whether it should be mandatory is something that we can debate. However, in such a tendering process, would the existing auditor be precluded from taking part in that process, or, if it was to take part in it and was clearly to submit the best value tender, would the authority then be prevented from reappointing it on that basis? That is the point I struggle to understand.

--- Later in debate ---

[Baroness Eaton]

It is not often that I agree with much of what the noble Lord, Lord McKenzie, says in this context, but I fully agree with much of what he has said about the role of the audit committee. Having chaired the audit committee of a large metropolitan authority myself, I see great value in it. The proposal for an audit panel in addition is really a sledgehammer to crack a nut. It adds again to the bureaucracy.

I have slight concerns about the requirement for a majority of independent members. I see fully the value in the noble Lord’s suggestion of an independent chairman, but it is extremely difficult in many authorities to find suitably knowledgeable and qualified people to take these roles. I know that under the old standards regime, finding suitable people to chair those bodies was quite difficult. In some cases, they had the desire to take over the world and gradually grew, like Topsy, the role of that body. If we could have independent chairmen, that would satisfy what is perceived as the body’s independence. I certainly do not see the need for an additional body in the audit panel to decide who should audit the authority. There are many checks and balances already within local authorities on probity issues, as I said earlier, so this is an unnecessarily bureaucratic step. The audit committee could happily perform that role.

[Lord Tope]

My Lords, the noble Lord, Lord McKenzie, has raised a very important and useful issue. We will discuss in relation to a later amendment the actual composition of a committee or panel and the number of independent members on it. I would guess that most principal authorities have an audit committee. I do not know, but it had not occurred to me that they would not until now. In many cases, as in my own authority and as that of my noble friend Lord Palmer of Child’s Hill, that committee is chaired by a member of the opposition. That is very much not the same as an independent chairman. Nevertheless, it is a good practice that is followed by many authorities. In my case, it is a Liberal Democrat authority, while in my noble friend Lord Palmer’s case it is a Conservative-controlled authority. It is therefore a useful extension to have a panel or committee chaired by an independent member.

There is room now for further discussion and consideration about whether we really need to have completely separate and independent auditor panels, as proposed in the Bill, or whether there is some way of meeting that through the existing audit committees and amending that practice. Rather than reinventing something that in most cases is working quite well in practice, I would rather see us adapting it. It can certainly be adapted without too much difficulty to meet the Government’s requirements through the Bill, which I think we all broadly support. We are all trying to achieve the same ends, so having poked a little fun at the noble Lord, Lord McKenzie, for the previous amendment, I thank him sincerely for raising a very important issue with this series of amendments.