Audit Commission to halve inspection costs

10 Feb 05
The Audit Commission is to slash £18m from public bodies' annual inspection bills after a review concluded that significant areas of the regulator's activities do not represent value for money.

11 February 2005

The Audit Commission is to slash £18m from public bodies' annual inspection bills after a review concluded that significant areas of the regulator's activities do not represent value for money.

The public spending watchdog, which has already promised to cut inspection costs by £5m, says this latest reduction will halve the total, allowing for inflation. The bill for the commission's inspection activities, mainly in local government, will fall from its high point of £49m in 2001 to £26m by 2006.

Commission chair James Strachan told Public Finance that the savings will be achieved partly by granting inspection holidays to high-performing authorities, but also by scrapping some general inspection and audit requirements.

He said the cuts were intended to advance the 'intelligent, strategic, targeted inspection regime' the commission has long advocated. They go hand-in-hand with reforms to the Comprehensive Performance Assessment regime that are due later this year.

Under these, the number of individual service inspections will be cut by two-thirds and the commission will rely instead on performance indicator data and self-assessment. Inspections will be launched only where that information indicates problems with services.

Strachan said the changes were not just about cutting costs. They would also improve the efficiency and effectiveness of regulation and drastically reduce the bureaucratic burden on councils.

'I really think the savings in terms of tens of millions of pounds is not the big issue here, because the real benefit is going to be felt on the front line,' Strachan said.

'There will be a huge cut for authorities in terms of money, resources, and time. You have to see it in a broader context than just "efficiency prevails at the Audit Commission". This goes way beyond the savings.'

The move is part of a broader drive to rationalise the inspection framework in the public sector.

The commission is working with schools inspectorate Ofsted on Joint Area Reviews for children's services. There are also efforts to co-ordinate inspection activities with other regulators such as the Commission for Social Care Inspection.

Simon Milton, chair of the Local Government Association's improvement panel, welcomed the commission's pledge but said authorities would want to see what it would mean on the ground.

'The Joint Area Reviews that authorities will be undergoing look as though they will be pretty formidable beasts. We're keen to see that a reduction in one form of inspection does not lead to an increase in another form.'

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