By Vivienne Russell | 27 April 2012
Abolishing the Audit Commission will save £650m over the next five years, more than originally envisaged, ministers have claimed.
In a written statement, local government minister Bob Neill said: ‘Working estimates from the draft impact assessment of local audit reforms show that these savings, together with the end of inspection work and the disbanding of the commission, will save around £650m over the next five years.’
He added that the assessments, including the details underpinning the savings figures, would be published later in the year.
When the abolition of the Audit Commission was announced in August 2010, ministers said it would save taxpayers £50m a year.
The statement, issued on April 25, also included assurances on the future of the Audit Commission pension scheme.
Neill confirmed that scheme would be closed to new entrants once legislation had been passed and the commission ceased to exist. But he said the government was guaranteeing the scheme and ensuring that the ‘accrued rights of past and present Audit Commission staff are protected’.
Neill went on: ‘As the scheme is relatively young and well-funded, I expect there to be no immediate or short-term cost to government. Subject to future investment returns, the eventual cost could be limited, or even nothing if the scheme is able to fully cover its liabilities.’
Early results of the 2011 valuation of the pension scheme showed that it had assets of £665m and estimated liabilities of £641m.
Neill said the government guarantee was being issued on condition that ministers had oversight of the scheme’s future investment and funding strategy.
Legislation to disband the Audit Commission has yet to be published. It is intended that a draft Bill will be issued later in the year.
