8 March 2011
The Audit Commission overstretched its remit and placed too much burden on local authorities, which are now ready to take on elements of inspection themselves, MPs were told last night.
Representatives from the Local Government Association, Chief Fire Officers Association and District and County Councils Networks told the Commons’ communities and local government select committee that they welcomed the watchdog’s abolition. Their views were in stark contrast to evidence previously heard by the committee’s inquiry into local authority audit and inspection.
Robert Light, deputy chair of the LGA’s leadership board,
said the Audit Commission had ‘had its day’ and the sector was now in a
position to take on the value for money and performance improvement areas the
commission had branched out into.
A free market environment for appointing auditors ‘could provide a better, more cost-effective option’, he added.
Jill Shortland, vice chair of the LGA’s improvement board, said the Audit Commission’s regime was ‘over burdensome for local authorities’. She added: ‘The work local authorities had to put in for every piece of work and inspection was horrendous.... it was government reaching down and interfering with local government rather than supporting us.’
The LGA is proposing to include peer reviews as part of its membership fees in the hope of moving towards light touch and voluntary regulation for areas excluding financial probity. ‘We are making a better offer to local authorities than we have ever made before for less money,’ said Shortland.
Peter Holland, president of the Chief Fire Officers Association, said problems with the watchdog in fire and rescue services had begun over the past few years when ‘we were feeding the beast of the Audit Commission rather than getting on and delivering the service’.
The witnesses strongly rebutted previous suggestions that allowing councils to appoint their own auditors would compromise independence.
Light said: ‘A competitive process of appointing auditors will give it rigour... If the council views the role of audit as a constructive partner or critical friend, as 99.9% of councils do, then I don’t see any conflict in the council appointing its own auditor.’
On further questioning from the MPs, he added: ‘It’s not where you look for who is going to be nice to you... In the past [councils] have had to pay a fee for a commission which did not give them value for money in their view. They want feedback and value for money.’
It was also unlikely that fees would rise, the witnesses claimed.
Light said the Audit Commission had a ‘monopoly’ and ‘never justified their increase in fees’, adding: ‘I think competition will see fees level out at a more acceptable level.’
Witnesses from the District and County Councils Networks also told the committee that ‘escalating costs’ from the Audit Commission had put too much burden on two-tier authorities and it was a ‘shame’ that the watchdog had expanded its remit so far beyond financial audit.
Peter Fleming, a councillor from Sevenoaks District Council, called for the commission’s in-house audit practice to be allowed to ‘float off and mutualise as soon as possible’ in the hope that it would open up the market to smaller providers beyond the ‘Big Four’ accountancy firms, driving down costs.
