18 January 2011
Councils should all receive a share of the Audit Commission’s 2009/10 surplus, the Local Government Association has urged.
It said today that the £26.8m surplus had been raised from charging councils for audit and inspection and should be returned to them.
The commission has offered only a rebate equivalent to 3.5% of fees paid by top-tier councils and 1.5% for districts.
The rebates have been limited because the commission intends to use the money to meet the cost of ending the Comprehensive Area Assessment system and of closing down the commission itself. Both have been abolished by Local Government Secretary Eric Pickles.
David Parsons, chair of the LGA improvement programme board, said: ‘It is entirely wrong for a non-profit organisation like the Audit Commission to treat surplus fees as a revenue stream to offset the cost of abolishing CAAs and the commission. It is not councils’ responsibility to help a national organisation meet the costs of its own restructuring.
‘Councils are entitled to a full rebate of the £26.8m surplus the Audit Commission holds as a result of the audit and inspection fees which they have paid.’
In response, Audit Commission chief executive Eugene Sullivan said: ‘We have already announced that councils will receive a £7m rebate this financial year. But the costs of abolition have to come from the public purse and the remainder of the Audit Commission’s reserves will contribute to meeting some of those costs.
‘There will be no reserves left at the end of this financial year and the Department for Communities and Local Government will meet any outstanding liabilities relating to redundancy and premises that cannot be covered by the reserves.’
