Thanks to the NLGN, the ACCA and Baker Tilly accountants– with Clive Betts’ Commons CLG committee due to weigh in soonish – a public debate about the future of local audit has more or less taken off this spring. But conceptually and strategically, things are as confused as they have been since last summer when the government announced the abolition of the Audit Commission on a whim and a prayer.
It’s not a debate the government seems to want, nor the National Audit Office, nor the Big Four accountancy firms – whose reputations have taken a hammering, not least from the recent House of Lords committee report.
It’s partly the Cameron governing style. This is proving to be a hugely disorganized government. On audit, it seems to be only recently that CLG, the Treasury and Business Innovation and Skills have had any reasonably senior conversations.
Much of the blame lies with CLG. Only a couple of days ago anonymous sources in the Communities Department, presumably close to Eric Pickles’ famously motor-mouthed special advisers, claimed that the prolongation of the Commission’s life was an effort by its highly-paid executives to keep their snouts in the trough for a while longer (Pickles’ people prefer porcine analogies). Yet the suggestion that the Commission would still be going in 2015 in fact came from CLG’s own civil servants. One’s impression is that not much internal communication goes on in Eland House these days.
The NGLN’s new pamphlet Show me the money http://www.nlgn.org.uk/public/ is a low-key effort to join together some of the loose bits and pieces. But in its efforts to please all sides, it leaves ambiguities in its wake.
One thing to get clear is that the fate of the Audit Commission’s auditors is secondary. What comes first is what the content of audit should be. If audit is to be pared back to ‘fair and true’ assessments of local authority accounts and value for money dispensed with, the Audit Commission skill set becomes redundant. We’re hearing a lot of talk about mutualisation but not what it implies, which is rigging the market at least for a few years. The alternative is simplification of audit, allowing smaller and medium sized commercial firms into the game.
The critical question is whether audit of councils amount to more than audit of other organisations with cash flows and balance sheets.
One answer, from the localists, is no. Get rid of the apparatus of public audit. Separate accounts from value for money and produce different solutions for those two. Localists see vfm as the responsibility of oversight and scrutiny and those fabled ‘armchair auditors’.
The competing response is: keep public audit, and its bolted-on assessments of governance and efficiency. By its nature public audit has to be imposed on councils and, in present circumstances, that means retaining some sort of national audit regime.
Only once we’ve decided between the two can we discern possible architectures. The problem with the localists’ solution is that councils are not trusted sufficiently – the government’s latest consultation paper makes that plain. The trouble with the public audit solution is general unwillingness to reconstruct a national audit regime. The National Audit Office seems to be resisting this vocation at every turn and the government will have no truck with the alternative, which would be to recreate in some body a version of what the dreaded Audit Commission has been doing for the past two and a half decades.
Barely a month before Pickles’ announcement, the Audit Commission invited to give its annual lecture the Essex University academic Tony King, who discoursed on failure in government, listing projects and policies that had come to grief. The abolition of the Audit Commission is shaping up as a compelling example.
David Walker is the former managing director for communications at the Audit Commission
