Audit Committee (Title and Remit)
We move on to a debate on motion S3M-2988, in the name of Gil Paterson, on behalf of the Standards, Procedures and Public Appointments Committee, on its eighth report in 2008, "Audit Committee—Title and Remit".
I invite Gil Paterson to speak to and move the motion. This time, you have up to six minutes, Mr Paterson.
Thank you very much, Presiding Officer. I doubt that I will take six minutes, but let us see how we go.
The committee's eighth report in 2008 sets out our recommended rule changes on the title and remit of the Audit Committee. Again, I was not a member of the committee when the report was completed, but I am happy to open the debate.
The request for the proposed changes was made by Hugh Henry, the convener of the Audit Committee, who felt that the current title and remit of that committee do not reflect accurately its role and function. In considering the Audit Committee's proposal, the Standards, Procedures and Public Appointments Committee took evidence from Hugh Henry, the clerk to the Audit Committee and Robert Black, the Auditor General for Scotland. The proposed changes were endorsed by the Conveners Group and the Parliamentary Bureau.
The first change that we recommend, which was suggested by the Audit Committee, is that the title of the Audit Committee be changed to the public audit committee, to make it clearer that the function of the Audit Committee is not internal audit but the scrutiny of Scottish Government departments and public bodies.
The second change that we recommend is a change to the Audit Committee's remit. At present, as set out in the standing orders, the committee's remit is limited to considering documents that are laid before the Parliament or, in the case of the Auditor General for Scotland, reports made to the Parliament. When the Audit Committee considers documents that are not accounts or reports from the Auditor General, those documents must concern financial control, accounting and auditing in relation to public expenditure. However, the Audit Committee felt that its current remit does not fully reflect the range and depth of its work. For example, primary legislation is not formally laid before the Parliament, yet the Audit Committee was designated as the lead committee for the Public Finance and Accountability (Scotland) Bill. The Audit Committee is regularly consulted by the Auditor General for Scotland on documents that are produced by Audit Scotland but which are not laid before or made to the Parliament, such as documents on the adoption of the international financial reporting standards and Audit Scotland's forward work programme.
We are aware that the Audit Committee does not scrutinise expenditure by individual local authorities. The audit of local authority expenditure is the responsibility of the Accounts Commission. The changes that we recommend today will not affect that position.
We therefore propose to amend rule 6.7.1(c) of the standing orders to enable the Audit Committee not only to consider documents that are laid before the Parliament—as now—but to consider documents that are referred to the committee by the Parliamentary Bureau or the Auditor General for Scotland. Any such documents must still concern financial control, accounting and auditing in relation to public expenditure. We believe that the proposed change to its remit meets the Audit Committee's concerns without creating any increase in overlap with the work of other committees.
I move,
That the Parliament notes the Standards, Procedures and Public Appointments Committee's 8th Report, 2008 (Session 3), Audit Committee - Title and Remit (SP Paper 151), and agrees that the changes to Standing Orders set out in Annexe A to the report be made with effect from 11 December 2008.
This important report reflects some serious discussion in the Standards, Procedures and Public Appointments Committee. As the committee's convener Gil Paterson said, nearly all the members of the committee who discussed the issue have now moved on—apart from me. I now regard myself as a veteran of the SPPA Committee, at least in this session.
The rule under consideration is rule 6.7.1, which says:
"The remit of the Audit Committee is to consider and report on—
(a) any accounts laid before the Parliament;
(b) any report laid before or made to the Parliament by the Auditor General for Scotland; and
(c) any other document laid before the Parliament concerning financial control, accounting and auditing in relation to public expenditure."
Under that rule, the Audit Committee's remit is to consider and report on laid accounts, reports and other documents. However, that was considered too restrictive by the committee, as a laid document is tightly defined, and the committee's remit could be interpreted as excluding some of the things that it has already considered. The SPPA Committee took the view that the situation should be remedied and that any amendment to the remit of the Audit Committee should not change the nature of the work undertaken but should merely reflect existing and past practices. The convener of the Audit Committee, Hugh Henry, helpfully assured the SPPA Committee that that was indeed his committee's intention in bringing the matter forward.
Initial draft changes to the rule suggested that the Audit Committee would have been able to consider
"any other document referred to it by the Auditor General for Scotland".
However, it was thought that that would allow an external party unusually direct access to a parliamentary committee. It was also thought that the rules had to ensure that the Audit Committee remained focused on the impartial audit of public expenditure, rather than on wider policy issues, which—rightly—are for other committees. The SPPA Committee therefore decided that that suggested change was a step too far. It decided to recommend restricting the ability of the Auditor General to put other documents before the Audit Committee, allowing him to put before the committee only documents relating to financial control, accounting and auditing of public expenditure.
The changes will help the new public audit committee—to give the committee the new title that it will have if the motion is agreed to—to do its work better. I am pleased by its convener's assurances in relation to keeping to the spirit of the changes. I urge members to support the motion.
I echo a point made by Gil Paterson: there is no intention behind the proposal to stray into issues of local government finance. We understand clearly that those issues are a separate interest.
As Dave Thompson suggested, it is right that we should clarify the parts of the Auditor General's work that the Audit Committee can consider. I can understand the worry that, if we simply gave the Auditor General carte blanche to put issues before the committee, some issues extraneous to his current work and our current work could end up being considered. It was right to make it clear that any documents put before the committee should have an accounting or financial basis. It was also right to reflect the nature of the work that the committee has been doing.
The suggested change is supported by all parties and all members of the Audit Committee. If we are constrained by a rule that says that a document or a report has to be laid before Parliament, we are constrained by a tight and specific definition, as Dave Thompson suggested. It is in the wider interests of the Parliament and the public that the committee be allowed to consider the financial and accounting issues that the Auditor General considers significant.
There is no intention to stray into the remit or work of other committees. People would be right to be worried if the Audit Committee wanted to become an all-encompassing committee that could delve into policy matters on justice, health or education, because that would be inappropriate.
When we think about how things might look in the future, we often refer to how things looked in the past, but there is no point in examining the past if we do not learn lessons from mistakes. However, when we are in danger of considering policy development issues, we should refer those issues to other committees.
The proposed change has the unanimous support of all committee members and all parties. The proposal better reflects the work of the committee, and the change in nomenclature will be easier for the wider public to understand, because it will take us away from the notion that we are simply an internal audit committee of the Scottish Parliament, when internal audit is not part of our remit.
I have no hesitation in recommending the proposed change to Parliament.
When I spoke in a previous Standards, Procedures and Public Appointments Committee debate, I was wrongly accused of having let myself be "got at". I trust that I will not have to endure such an attack today.
I am pleased to speak in this short debate about changes to the title and remit of the Audit Committee. I believe that the proposed changes are positive and that the clarity that they will create will be welcomed both by members of the public and by those who are involved in the vital audit process throughout public spending in Scotland.
The changes were recommended by the session 2 Audit Committee in its legacy paper, in which members understandably expressed concern about the perceived function of the Audit Committee being one only of internal parliamentary audit. I am pleased that the Standards, Procedures and Public Appointments Committee was able to act on the previous Audit Committee's suggestion and that it found consensus among those who gave evidence.
Changing both the title of the Audit Committee, so that it will become the public audit committee, and its remit will ensure that members of the public are left in no doubt that the committee has a locus in wider audit issues relating to public spending within the devolved remit of the Parliament. I agree with the Auditor General for Scotland that the public will understand the title—the public audit committee—and I commend to my fellow members the changes to both the title and the remit, which will mean that the committee will be able to consider reports that are referred to it by the bureau or the Auditor General. The changes will be good for the public audit committee, good for the committee system and good for the reputation of the Parliament as a whole.
Along with my colleague Gil Paterson, the convener of the Standards, Procedures and Public Appointments Committee, I thank the clerks to the committee, who have given me so much support as the new deputy convener. Indeed, I thank all members of the committee. It is important that our thanks are a matter of public record.
Like most of my colleagues on the committee, I joined the committee after the inquiry into the proposed changes to the Audit Committee's title and remit was concluded. I thank all those who took part in the inquiry and gave evidence. I am happy to close the debate on behalf of the committee and to cover some of the salient points.
The committee was satisfied with the arguments that were put forward by the convener of the Audit Committee and the Auditor General for the proposed changes to the title and remit of the committee. We have heard from Jamie McGrigor and Hugh Henry what those were.
Furthermore, the proposed rule changes have been endorsed by the Conveners Group and the Parliamentary Bureau. Also, the recommended changes will not affect the role of the Accounts Commission in its scrutiny of local authority expenditure.
The mechanisms of referral by the bureau regarding, for example, the consideration of legislation and by the Auditor General regarding, for example, his forward work programme will allow the Audit Committee to consider and scrutinise relevant areas of public expenditure.
I am happy to close the debate on behalf of the committee and hope that the recommended changes will receive the chamber's support at decision time.
Indeed, decisions on both motions will be taken at decision time.