Lord Jamieson (Con)

My Lords, again, I raise my interest as a councillor in central Bedfordshire, which, just being slightly boastful, is a council that for the 10 years I was leader had its accounts audited and signed off every year within the deadline and was one of the few councils to do so. I am grateful to the Minister for introducing this statutory instrument. The instrument raises the threshold, as has been discussed, to £15 million in annual income or expenditure. Public bodies below this will no longer need to have the full audit and can follow the streamlined annual governance and accountability return—AGAR—process. This reform is in response to the long-standing and well documented challenges that England’s local audit system faces. It is worth noting that this is not a new policy initiative. The foundations were laid under the previous Conservative Government, who published the consultation in December 2024, setting out proposals to overhaul the local audit framework. The consultation highlighted widespread concerns around audit capacity proportionality and long-term sustainability. A formal response was subsequently published on 9 April 2025. I ask the Minister to update the Committee on progress towards implementing the remaining elements of this broader strategy. We believe that the instrument before us is a pragmatic and proportionate reform. It recognises that many smaller authorities do not carry the same level of financial risk as larger bodies and should not be burdened with audit requirements that are both costly and unnecessary where they are unnecessary. The Government have suggested that this change will ease the financial and administrative burden on smaller authorities, reduce the pressure on the over- stretched audit market and allow scarce audit resources to be better focused on higher-risk councils where scrutiny is most urgently needed. We note that 55% of the consultation respondents supported raising the threshold, indicating that the proposal carries a degree of support from within the sector itself. In closing, I would be grateful if the Minister could address a few further points. First, what safeguards are in place to ensure that smaller authorities, no longer subject to the full audit, continue to operate with high standards of financial transparency and sound governance, which I think addresses the point that the noble Lord, Lord Sikka, was raising? While £15 million is a sensible threshold, will other factors be taken into account, such as the debt levels of councils? A council that is heavily in debt, even if it is just below the £15 million threshold, is clearly at much higher risk than one that is just above it and has no debt. Secondly, will the department be issuing updated guidance to support these authorities as they continue using the AGAR framework? As my noble friend Lord Fuller mentioned, are there other consequences that are not in this paper, and that are coming as a change to this definition, that we are not considering today and should be considered? Finally, can the Minister provide an update on the progress of the wider local audit reform programme, as set out in December 2024? In particular, will she address the issues of proportionality, risk-based accounting and focusing that limited resource on higher-risk areas and not on low-risk, bureaucratic processes? I have one other question; I apologise. Can the Minister update the Committee on how the Government are addressing the shortage of local government audit practitioners? These are my last few sentences. We support this instrument in principle. It is a sensible step forward towards a more proportionate, risk-based local audit regime. However, I raise those various issues. We need to ensure that there is robust oversight, transparency and regular review, to ensure that public accountability is not diminished in the process.