28 February 2011
Audit fees for local government, health and community safety bodies will be cut by up to 20% in the 2011/12 financial year, the Audit Commission confirmed today.
Following a consultation on its proposals, the watchdog said the fees would be 5%–20% lower than in 2010/11. Some organisations will also be given rebates on their 2010/11 fees, in addition to the £9m already announced by the commission, which is due to be scrapped.
Audit Commission chair Michael O’Higgins said: ‘The commission is continuing to drive down its costs and become more efficient. So it has been able to achieve almost £40m in savings over three years, which are being passed straight back to health, local government and community safety organisations to help them with their own budgeting.’
The drop in fees was also attributed to a reduction in ongoing audit costs as a result of the transition to International Financial Reporting Standards, which first applied to local government bodies in 2010/11.
During the watchdog’s consultation, it emerged that many in local government wanted the costs of ending Comprehensive Area Assessments to be met by central government rather than public bodies.
O’Higgins added: ‘The costs of ending CAA, and of the commission’s own abolition, must come from the public purse. Some will be met from reserves, and any balance will be funded by the Department for Communities and Local Government.’
It is expected to cost about £450m to abolish the commission because of staff redundancies, pension liabilities and penalties for breaking contracts on leases.
Since its abolitionwas announced in August about 300 of the 2,011 staff have left, with a further 300 currently working their notice. Itis not yet clear exactly when the commission will finally close.
