30 March 2011
The government today published a consultation on its plans for local authority public audit following the abolition of the Audit Commission.
It comes nearly eight months after Local Government Secretary Eric Pickles announced that the spending watchdog would be abolished from 2012.
Ministers are now consulting over a new audit regime that would allow all local public bodies with a turnover of more than £6.5m to appoint their own external auditor from an open market.
Auditors would be regulated under a system akin to the audit of private companies, with an expanded role for current Companies Act audit regulator the Financial Reporting Council. The National Audit Office would set a code of audit practice.
Public bodies with a turnover below £6.5m would be audited in a more ‘proportionate’ way.
Local government minister Grant Shapps said: ‘The Audit Commission has lost its way, becoming too focused on reporting to Whitehall and supporting the previous era of target-driven government.
‘The options we are developing for a future audit regime will shift power from Westminster to people, save taxpayers money, deliver high standards of auditing practice and maintain inspection and intervention arrangements for the most vulnerable.’
The consultationruns until June 30 and draft legislation will be published in the autumn.
Yesterday CIPFA chief executive Steve Freer said he expected audit fees to rise under the new regime. He was giving evidence to the Commons communities and government select committee.
