Northern Ireland Assembly

I support amendment No 3. It is important that no restrictions be placed on the Comptroller and Auditor General, and the removal of the phrase "at all reasonable times" is to be welcomed. I also welcome the new clause put down in amendment No 9, made by the Minister himself. This is a welcome piece of progress. As regards amendment No 8, I am glad that the Minister has taken account of the concerns raised by the Public Accounts Committee and, indeed, of some of the concerns raised by the Finance and Personnel Committee.

Amendment No 8 is certainly a step in the right direction, and it is comprehensively drafted. However, I share certain concerns with Peter Robinson. Regarding the reference in the first sentence to "at any reasonable time", there is a question mark over whether that should be in the legislation.

For the sake of clarity, I would also like the Minister at some stage to define "substantially funded from public money". It is clear that a body which is entirely funded by public money has 100% funding from the public purse, but the definition of a body which is "substantially funded" from the public purse is more vague. It would be appropriate for the Minister to clarify that.

Bodies receiving significant public funds were covered in amendment No 7, which is not now being moved, and I would like to see that changed by way of an amendment for the Further Consideration Stage. That was the principal weakness of amendment No 8. Again, there needs to be clarity about what that will entail. It is important that the Comptroller and Auditor General be given these inspection powers, which are of a lesser strength than audit powers. They should be much more comprehensive in the areas they cover.

For example, if there are two bodies - and reference has been made to community groups - there could be a situation in which one group, perhaps a relatively small one, receives funding from the public purse. It employs one or two people and perhaps has an annual budget of £30,000 or £40,000, all of which comes from the public purse. To ensure that there is no abuse of that funding, and to ensure that it is spent correctly, we rightly have powers of inspection. But another community group may have a budget of £200,000, of which perhaps £80,000 or £90,000 comes directly from the public purse. It may well be that that group falls outside the definition of being "substantially funded", because less than 50% of its budget comes directly from public money. However, the amount it receives is in excess of what other groups receive.

To take another example, there may well be, by way of contracts, various private bodies which receive tens of millions of pounds, but this may not constitute substantial funding from public money because it may be less than 50% - if that is the definition - or it may well fall below the level which would constitute "substantially funded". Yet no one could argue that that public body is not receiving significant public funds. That money needs to be traced to ensure that it is being spent properly. To close this loophole, when the Bill comes to Further Consideration Stage I would like to see an amendment that takes account of the proposals in amendment No 7 to bring on line my opinion that the power of inspection should also extend to bodies which receive significant public funds.

Most community groups receive a cocktail of funding from various sources, of which a small amount may come from rural or district councils to prime the pump. Most of those money providers have a different system of auditing, so community groups have great difficulty in presenting their accounts in such a way as to be understandable because often each provider demands its own system. It is imperative that those accounts are properly scrutinised. Recent reports have indicated that community groups have shown gross negligence in how their money has been spent. It is imperative that the Comptroller and Auditor General has a remit that allows him to inspect these bodies fully.

I accept the Member's point, but I only cited community groups as one example -there is a myriad of bodies that are outside direct departmental control, and it is important that any public money be spent in the right fashion. Events in recent years in Northern Ireland have shown that some groups are effectively fronts for paramilitary organisations, and we must be particularly careful that we are not funding such organisations.

That is why I believe that the powers of inspection - as opposed to the audit powers - should be drawn as widely as possible. It is why, while I am happy to support amendment No 8, I would like further amendments to be made at Further Consideration Stage. I want to ensure that, as far as possible, we have a Government Resources and Accounts Bill which we can stand over and of which we can be proud.

I understand the arguments put forward in respect of amendment 3, but it is not desirable to remove any reasonableness test from this clause and, therefore, I oppose the amendment.

The provisions for the Comptroller and Auditor General to have rights of access to documents "at all reasonable times" is included simply to ensure that it could not be thought that the Comptroller and Auditor General was exercising his rights in an unreasonable manner. The intention is not to restrict the Comptroller and Auditor General's rights, but rather to have a reasonableness test which is consistent with other legislation and which others have to pass. If the context were such that access was needed urgently, that would be reasonable.

Will the Minister acknowledge that there is a duty upon any public official, in those circumstances, to behave reasonably and that this reasonableness test does not need to be explicitly spelled out in legislation? There is a general requirement for reasonableness that would be tested, for example, in a judicial review of any decision. There is no need for the words "at all reasonable times" to appear in the Bill.

I was going to comment on that matter. The explicit inclusion of the reasonableness test in the Bill would not jeopardise the effectiveness of the Comptroller and Auditor General's work. Equally, if the Wednesbury test of reasonableness applies anyway, why should objection to its inclusion be so strong that an amendment is needed.

Contrary to Mr Peter Robinson's suggestion, the Department of Finance and Personnel would not be seeking to define "reasonableness" case by case. It is a reasonableness test that would apply anyway in the approach taken by the Comptroller and Auditor General. Some Members seem to be suggesting that this is an attempt by the Department of Finance and Personnel to rig or restrict things. That is certainly not the case.

In the same way, when Mr Robinson referred back to amendment No 2, and to the question of whether one should include "Department" or "department", it was made clear that this was the result of a typographical error. Do people really think that the Department of Finance and Personnel would wish to be in a position where only its officials would be accounting officers for different Departments? As a Minister, would I want to be in that position? I assure Members that I would not want that, particularly given the experience we had earlier in the life of the Administration when dealing with conflicts of interest. Such a situation would put me in an impossible position. People should be more sensible about this.

We have amendments No 7, No 8 and No 9. I need to address the issues that go to the heart of those amendments, notwithstanding the points that have already been made about amendment No 7 and the Committee's willingness to withdraw that amendment - although that willingness has been qualified by the expression of particular continuing concerns.

Although the primary purpose of the Bill was to give effect to the introduction of resource accounting and budgeting, consequential changes to the auditing of Government accounting information presented to the Assembly were also necessary. This gave rise to a more extensive debate of accountability issues than was directly relevant to the Bill. As a result, the Finance and Personnel Committee, the Public Accounts Committee and the Audit Committee each suggested possible amendments aimed at extending the powers of the Comptroller and Auditor General.

The Finance and Personnel Committee report was completed before officials were able to produce the text of an amendment to put into effect the approach that I agreed with the Committee in January. Hence the Committee's report indicated that the Committee would be prepared to consider withdrawing its amendment if it were satisfied with mine. The approach in amendments No 8 and No 9 is designed to fulfil my undertakings to the Committees, and amendment No 6 provides further assurance that the Department of Finance and Personnel will work with the Public Accounts Committee and the Finance and Personnel Committee in implementing these provisions.

The issues are complex and sensitive because they relate not only to how the Government go about business but also to the ways in which Ministers and Departments are accountable to the Assembly and the public. There has been considerable debate about the respective roles and powers of the Executive, the Department of Finance and Personnel and the key Assembly Committees. I again want to place on record my gratitude to the three Committees for the detailed thought and attention that they have given to the Bill. I also recognise that they have served notice - including what has been said here today - that they will continue to underline these concerns as matters proceed, and particularly if matters do not proceed.

This is of major constitutional significance, and I want to put some points on the record. We can all agree that the institutions here are unique and distinctive. It follows, therefore, that any model for the relationship among the various branches of the Administration will also be distinctive. The approach that we adopt in the Bill does not need to be the final word on the subject, but it can and should lay some important foundations. Some principles are clear in both the agreement and the Northern Ireland Act 1998, and, indeed, in our practice so far, though that is still evolving.

First, expenditure is subject to the approval of the Assembly, following scrutiny of, and consultation on, the annual Budget. Secondly, there is clear accountability by Departments and other public bodies to the Assembly through the Public Accounts Committee. It is already evident that on both these points the scrutiny is deeper and more intense than was possible under direct rule, although I also recognise Members' frustrations - as we have heard again today - with the timetables. I agree, yet again, that these need to be improved.

I want to affirm that I and my Department are committed to working with the Finance and Personnel Committee and the Public Accounts Committee to develop these arrangements. We want and need to see better and stronger scrutiny of Departments' expenditure, with an increasing emphasis on the outputs and outcomes that are being achieved.

We need to ensure that the Department of Finance and Personnel and the Economic Policy Unit fulfil their roles to pursue jointly value for money and effectiveness. We need to have a strong and effective public audit function, working constructively with Departments to ensure that Departments and other public bodies are held to account - to learn lessons and share best practice.

The approach to the key amendments to the Bill should be seen in that context. Amendment No 7 would give the Northern Ireland Audit Office wide-ranging powers of access to the accounts of private sector companies, voluntary organisations and individuals on an almost unrestricted basis. It has been argued that the Comptroller and Auditor General should be able to follow public money without constraint. However, I am concerned that adopting such an approach without prior consultation could lead to criticism that we are imposing unwarranted and undue burdens on the private and voluntary sectors in an uncontrolled or summary fashion. It might lead some to hesitate over participating, not least in the voluntary sector.

I am not saying that I oppose comprehensive scrutiny, but we need to proceed carefully and with consultation. We need to keep the focus, as in recent Public Accounts Committee hearings, on how Departments protect public money. Similar issues arose when the corresponding Bill was being taken through Westminster. The Government responded by commissioning the Sharman review to address them and report. That process is still ongoing, although the final report is expected later this month. I intend to examine the findings very carefully, as, undoubtedly, the Committees will.

Although I am concerned that we should not act without consultation, I have been supportive of the general principles underlying the approach sought by the Public Accounts Committee and the Finance and Personnel Committee. Following lengthy consultation with the Comptroller and Auditor General and the Committees, I have brought forward this amendment, which further extends the powers of the Comptroller and Auditor General. In some respects, these go further than the corresponding powers of the Comptroller and Auditor General in Whitehall, and represent a significant advance on the original proposals. In my view, this is the furthest we could reasonably go without consultation with the other affected bodies. It has been argued that the public auditor has more extensive powers in some other jurisdictions. I am not aware of any case where such powers were rushed through in a context such as our present position.

For all bodies in the public sector - except district councils, which are the responsibility of the Department of the Environment's local government audit function - amendments No 8 and No 9 would, in essence, give the Comptroller and Auditor General powers to inspect relevant documents and to initiate value-for-money studies. For any other body undertaking functions of a public nature or substantially funded from public money, they would give the Comptroller and Auditor General powers to inspect relevant documents. For other bodies in receipt of significant funds, the effect of my proposals would be that the Department of Finance and Personnel would facilitate the Comptroller and Auditor General by using the new power to make an order giving him inspection rights where necessary. The Bill, as originally presented, contained a proposed power for the Department of Finance and Personnel to make an order granting the Comptroller and Auditor General access.

Although that was intended to facilitate accountability, some members of the Committee interpreted it as placing the Comptroller and Auditor General's powers under the discretion of the Department of Finance and Personnel. In order to emphasise that the power should be used mainly to open doors, I am proposing a further amendment - amendment No 6 - which will place an obligation on the Department of Finance and Personnel to have regard for any views expressed by the Public Accounts Committee in relation to the issue.

I have also proposed that the Comptroller and Auditor General should only exercise these powers if it appears to him to be appropriate to do so in view of public concern or interest about a matter. This condition is there to provide reassurance that the powers will not be used without good reason.

As I have indicated to the Committee and others, the amendment represents only a first step in the process of developing improved local accountability arrangements. I am committed to revisiting this area in the forthcoming audit reorganisation Bill.

Going any further at this stage would have direct implications for other bodies. It would be helpful and necessary to consult, so that any factors that may emerge could be taken into account when we frame new powers. That should lead to better legislation than would be the case if we proceed on our present understanding of the issues.

It is my intention that, following consultation, we should seek to agree definitions that will clarify the extent of the Comptroller and Auditor General's locus for inclusion in the audit reorganisation Bill - which is also the obvious place to address any issues in respect of district councils. This will mean widening the scope of the audit reorganisation Bill, which is primarily designed to improve the organisation of the functions of the audit of local government and of the Health Service. However, as it was not possible to resolve all the issues of the Comptroller and Auditor General's locus in the very tight time scale for the Government Resources and Accounts Bill, it will be necessary to review those issues in time for the next Bill.

To take that forward, I propose that the Department of Finance and Personnel consult widely on the implications of providing access for the Comptroller and Auditor General to the types of bodies that would be affected. The views of all Departments regarding the scope, remit and nature of public sector audit will be sought as part of the preparatory process - particularly its remit for health boards and trusts, local government, limited companies and other entities.

I wish to draw to the attention of the House that the moment of interruption is 6.00 pm and we have a substantial amount of business still on the Order Paper.

Our thinking may also need to be developed in the context of the review of public administration, as appropriate mechanisms of accountability will need to be part of the overall proposals that emerge there.

A Cheann Comhairle, you will be glad to hear that my voice will not allow me to speak very long, so I will be brief. I too recognise that there has been good co-operation involving the three Committees and the Minister in dealing with the Bill. This augurs well for the future.

As regards amendment No 3, in relation to the issue of reasonableness, although we recognise that we have a reasonable Minister currently, we are looking at legislation which may be used by future Ministers who may not be as reasonable or understanding. Therefore, it is important that we look at access for the Comptroller and Auditor General at reasonable times. It depends on interpretation. It is important that we actually open up doors to ensure that there are no barriers created to make it impossible for the Comptroller and Auditor General to carry out his functions at weekends, holiday periods and at other times when there may be unnecessary delays. It is important that that deletion be made.

The Committee met this morning and gave me permission to withdraw amendment No 7. Members can, of course, put forward any amendments for the next session. I ask the Assembly to support amendments No 3, No 8 and No 9, as the Committee has recommended.

I remind the House that if amendment No 4 is made, amendment No 5 will fall.

Amendment No 7 not moved.

"Inspections by Comptroller and Auditor General

"Economy, efficiency and effectiveness examinations by Comptrolle and Auditor General

The Bill stands referred to the Speaker.

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Assembly Business

We have a procedural dilemma. We still have two items on the Order Paper, but the time of interruption is 6.00 pm. There are two possibilities. If the business on the Order Paper is unopposed, I could put the questions forthwith. However, if we do not have the leave of Members to proceed in that fashion the Assembly will be adjourned, to resume at 10.30 am tomorrow morning for the rest of the business, after which there will be a break of five minutes. Then the business of the new day will begin.

Do Members agree to the former?

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Health and Personal Social Services Bill: Final Stage

Assembly Standing Orders

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