Clause 20

Budget Responsibility and National Audit Bill [Lords] – in a Public Bill Committee am 2:00 pm ar 3 Mawrth 2011.

Danfonwch hysbysiad imi am ddadleuon fel hyn

Question proposed, That the clause stand part of the Bill.

Photo of Chris Leslie Chris Leslie Shadow Minister (Treasury) 2:15, 3 Mawrth 2011

Many people may be surprised by the clause. People may think that the National Audit Office has been in existence for a long time, but if we look at the swirling mists of the British constitution, such as it is, with its still-undefined character, we see that in many different ways the NAO has never found its way properly on to a statutory footing, so the clause will create a body corporate called the National Audit Office. The clause also triggers schedule 2, which hon. Members will see is a quite a considerable schedule at the back of the Bill, detailing what the NAO shall do.

As I mentioned earlier, the Tiner review, and the set of circumstances that prompted the thinking about modernising the governance and constitutional arrangements of the Comptroller and Auditor General, the NAO and the scrutiny of the UK’s public accounts, have opened the box on a number of different areas, and we welcome the modernisation process. However, a number of anxieties have been voiced at different times about certain aspects; for example, it has been suggested that parliamentary oversight of the NAO and the CAG may be unwittingly diminished by the creation of a whole panoply of boards of directors and executive and non-executive directors for the NAO, and accountability will in some cases be redirected. I think Professor David Heald, a former adviser to the Public Accounts Commission, said that when the NAO begins to negotiate internally between its board and the CAG, there will be fewer opportunities for the PAC, and by extension the House of Commons, to have the same effective right.

I am not quite clear that I agree with the professor’s view, but there have been criticisms of all that activity, not least by the noble Baroness Noakes, a Conservative peer who suggested that the House of Commons ought to have pulled its finger out when the expenses and allowances issue arose for the CAG. That perhaps showed that the House of Commons procedures for keeping close account of what was going on were lax, and that it was creating all the arrangements almost as an excuse. She described the arrangements as

“a costly and cumbersome superstructure of a board and non-executives.”—[Official Report, House of Lords, 8 November 2010; Vol. 722, c. 26.]

To a certain extent, I sympathise with her anxieties. Will the Minister put on record her estimate of the total costs of creating the board, the non-executive directors and the new governance arrangements? On balance, the arrangements are probably necessary, as there is an  expectation that that is the modern way of doing business. However, Baroness Noakes made a fair point: the legislation is not exactly light touch. It is belt and braces, and there is a cost involved. It would be illuminating if the Minister could give a figure. Obviously, there are a number of issues that we will come to in schedule 2.

Photo of Roger Gale Roger Gale Parliamentary Assembly of the Council of Europe (Substitute Member)

I was just going to say that it might be helpful if we got clause 20 out of the way, and then Members can thrash out the meat of the matter under schedule 2.

Photo of Justine Greening Justine Greening The Economic Secretary to the Treasury

The hon. Gentleman mentioned a number of points that I am sure we will come on to in schedule 2. He is right to say that at the moment, the National Audit Office is not a corporate body, and the clause will establish it as a new corporate body. He is also right that there is a range of issues on governance, structure and constitution related to the establishment of the NAO as a separate legal body. However, I think we should proceed to schedule 2, where we can debate some of the issues.

Question put and agreed to.

Clause 20 accordingly ordered to stand part of the Bill.