17 December 1999
Although £24.25m is included in the local government settlement for Best Value audit and inspection, the Audit Commission and the Department of the Environment, Transport and the Regions now expect the cost to be £40m next year, rising to £50m or higher in subsequent years.
A source within the commission said the government was 'deeply embarrassed' by the rising inspection cost and was having to re-think its approach to Best Value as a result.
One option may be to reduce the emphasis on external audit and inspection. A spokeswoman for the DETR said: 'It is important that authorities take ownership of audit and inspection processes so that they improve standards. Costs will be met by a mixture of grants and fees. We will make available additional funds to meet the costs.
'There is £24.25m in the revenue support grant for next year and the balance will be paid as grant to the Audit Commission.'
However, the spokeswoman confirmed that in later years councils would be expected to meet an element of the costs so that they had a financial incentive to improve standards and bring down the costs of audit and inspection.
An Audit Commission spokesman said: 'Of course, the intention of the Best Value regime is to incentivise local authorities to improve the quality of their services – whether that is by a financial incentive or by other incentives is still under discussion.'
But Dave Maddison, policy officer at the Local Government Association, said he was confident that authorities would not have to pay any extra costs. The LGA says that local government minister Hilary Armstrong had given a firm assurance that authorities will not face extra charges for Best Value audit and inspection.
'The LGA will firmly resist any move to include additional Best Value audit and inspection costs within the ordinary audit fees,' added Maddison.
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