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Public Bodies Bill [HL]

This has been a very interesting short debate. I am grateful to my noble friend Lord Warner for allowing us to debate the Audit Commission and some of the matters that arise from consideration of it as far as the Bill is concerned. My noble friend has a distinguished record as a quango basher. He led the arm’s-length body review in the Department of Health, which I succeeded him on. That reinforces the view that we, on this side, are not at all opposed to the principle of looking at each of these organisations where it is quite clear that they ought not to continue or that their functions can be done in another way. We have no problem with that. We do have a problem, however, with the architecture of the Bill. There is the general principle of the Henry VIII clauses, a huge and unprecedented power given to Ministers. I have no doubt whatsoever that, if we as a party had brought this Bill before your Lordships’ House in the last Parliament, we would have had no possibility whatsoever of having it passed. The second point is this. The noble Viscount is right to suggest that, when affirmative orders come before your Lordships’ House, consultation has to take place and impact assessments have to be published. However, we are right, at this stage, to scrutinise those bodies that are under threat in this Bill. Also, as a distinguished member of the Merits Committee, the noble Viscount may well have observed the correspondence between the committee and the noble Lord, Lord Strathclyde—the Leader of the House—on the question of the use of the conventions as regards secondary legislation. The Cunningham joint select committee report, which was approved by this House, made it clear that there were circumstances in which it was quite appropriate for the House to seek to defeat secondary legislation. My judgment is that that would apply to this Bill, because the kind of skeletal Bill that the Cunningham committee described is exactly what we are debating today. The noble Lord, Lord Strathclyde, seeks to reinterpret the convention as regards secondary legislation. Essentially, he does not accept that there is a convention that this House can seek to defeat secondary legislation in the circumstances described by the Merits Committee. That increases our nervousness about whether the scrutiny available to the House of Lords will be sufficient to meet the needs of this Bill. We would have had greater comfort if the noble Lord, Lord Taylor, who is leading this Bill through with his usual inestimable charm, had clearly indicated that the Government would not proceed with Clause 11 and Schedule 7 and would agree to use the super-affirmative procedure. If he had acknowledged that an early stage, the passage of this Bill would be an awful lot easier. I suspect that that will be the end point of our debates in your Lordships’ House. He will know that there is profound unease about this Bill all round the House. We will continually come back to the point about the architecture. My noble friend asked important questions about the Audit Commission. First, it is very difficult to know why the Audit Commission is being abolished. Of course, some of its activities may be open to question and questions may be asked about whether it needs the resources that it has, though most of them come from the fees that it levies rather than from central government. My understanding is that the quality of the commission’s work is acknowledged in local government and in the health service and that there is generally felt to have been an improvement in the efficiency of local government and of the NHS as a result of the commission’s activities. My second question concerns the cost of the commission’s abolition. I should like the noble Lord, Lord Taylor, to hazard a guess at what he thinks the cost of abolition will be. A few weeks ago, we were told by the noble Baroness, Lady Hanham, that the estimate was about £50 million. However, she was not able to be more precise than that. Far from the huge savings that we were promised, it is becoming apparent that in the next spending review period there will be a huge upfront cost as a result of this Bill. I remind noble Lords that an announcement was made from Downing Street at the time of the Queen’s Speech that suggested that £1 billion would be saved. Since then, however, the Government have been rather coy about this; in fact, there is a whiff of suspicion that costs will be greater than savings in the next spending review period. As we all know, the impact assessment is silent on all these matters. It would be good to know what is expected to replace the commission. I have no doubt that private sector firms will be able to take over individual audit work, but I wonder whether the Minister agrees with the ACCA and CIPFA that there may be more conflicts of interest if all this work goes to the private sector. As my noble friend has said, there is a real fear that the independent voice of the Audit Commission, which was able to criticise government, will be lost. My other concern relates to the work that the Audit Commission has done in relation to comparative performance and national comparators. Over the years, it has produced invaluable reports on National Health Service finance and related issues and comparative performance studies that have enabled the boards of NHS bodies to compare themselves with similar organisations, which I know board members have found invaluable. It is worth noting that its payment-by-results benchmarker was a winner in the excellence in the use of healthcare information management section of last year’s E-Health Insider Awards. Therefore, there is every indication that the Audit Commission produces quality work. There is a further question that we are very puzzled about: why is the Audit Commission not in the list of bodies to be abolished? Our assumption is that the Government consider that it should be abolished by primary legislation. However, it is very difficult to establish the criteria under which some bodies are to be dealt with in this Bill while others are to be dealt with in primary legislation. The same is true of a number of health bodies that we know will be abolished under forthcoming health legislation. Again, I should be grateful to the noble Lord if he could explain a little more about the criteria that determine in which Bill these bodies will be dealt with.