Government Resources and Accounts Act 2000 (Audit of Public Bodies) Order 2008

rose to move, That the draft order laid before the House on 26 February be approved. The noble Lord said: My Lords, the order is being made under the Government Resources and Accounts Act 2000 and is intended to make the Comptroller and Auditor General the statutory auditor for four non-departmental public bodies and for the NHS Direct NHS trust. I am grateful for the assistance that we received from the National Audit Office in preparing these provisions. This is the fourth time that we have taken such an order through Parliament since 2003, although it is the first time that we have used the order-making powers in the Government Resources and Accounts Act to give the Comptroller and Auditor General statutory audit responsibility for an NHS trust. It might be helpful if I set the draft order in context. In 2003, the Government implemented key recommendations made by the noble Lord, Lord Sharman, on audit and accountability in central government. In particular, the Government responded to concerns expressed in Parliament by strengthening the statutory powers of the Comptroller and Auditor General in two ways: first, by making the Comptroller and Auditor General the statutory auditor of certain non-departmental public bodies, where he is not already the statutory auditor; and, secondly, by giving the Comptroller and Auditor General greater powers of access to documents held by bodies in receipt of grants or in relation to contracts with organisations where the Comptroller and Auditor General is the statutory auditor. The House may recall that in 2004 and 2005, the Government continued this policy by extending the Comptroller and Auditor General’s statutory powers in respect of a further six non-departmental public bodies. Since the policy was established, new primary legislation to set up a non-departmental public body usually includes provision for the body to be audited by the Comptroller and Auditor General. The four non-departmental public bodies affected by the order have either recently been reclassified as non-departmental public bodies or were established under arrangements or legislation in which no provision for audit by the Comptroller and Auditor General was included. The Treasury has worked with the affected non-departmental public bodies to prepare them for the Comptroller and Auditor General’s audit. In line with policy, current audit contracts need to run their course before the Comptroller and Auditor General begins auditing the non-departmental public bodies. This order is intended to continue the process that Parliament approved in 2003, 2004 and 2005. It provides for the Comptroller and Auditor General to be made the statutory auditor for the Royal Ulster Constabulary George Cross Foundation, the Independent Living Fund (2006), the Ombudsman for the Board of the Pensions Protection Fund and the Pensions Ombudsman. In doing so, the draft order applies a long-standing policy, endorsed by all sides of the House, that non-departmental public bodies are to be audited by the Comptroller and Auditor General. The order also provides for the Comptroller and Auditor General to retain statutory audit responsibility for NHS Direct, even though it has become an NHS trust. I thought that it would be helpful to explain the Government’s reasoning behind this, given that this body is not specifically a non-departmental public body. NHS Direct was formerly a special health authority. Indeed, it was made subject to Comptroller and Auditor General audit in an earlier order under the Government Resources and Accounts Act. NHS Direct became an NHS trust on 1 April 2007 as part of the implementation of the review into the Department of Health’s arm’s-length bodies. But the National Health Service Act 2006 provides that all NHS Trusts are to be audited by the Audit Commission. In the Government’s view, however, NHS Direct remains a national body, as opposed to all other NHS trusts that provide services locally. It is right that NHS bodies that provide services locally should be subject to audit by auditors appointed by the Audit Commission. But NHS Direct NHS trust provides services at a national level. Like other similar bodies, it should continue to be audited by the Comptroller and Auditor General, and this order provides for that. The proposals in the draft order continue the Government’s commitment to improve parliamentary accountability. I beg to move. Moved, That the draft order laid before the House on 26 February be approved. 12th report from the Joint Committee on Statutory Instruments.—(Lord Davies of Oldham.)