Audit fees contained, Armstrong tells committee

2 Mar 00
Current audit arrangements for councils, largely carried out within the public sector, keep fees down, local government minister Hilary Armstrong claimed this week.

03 March 2000

She said the 70/30 split in favour of District Audit as against private sector accounting firms had worked in local authorities' favour. 'It works reasonably well at the moment. I would be reluctant to do anything that would significantly increase the fees. The boundaries at the moment help keep fees down,' she said.

Bill Olner, MP for Nuneaton, told the minister: 'I don't think many councils would agree with you on that.'

Armstrong's comments, on March 1 to a Commons' committee examining the work of the Audit Commission, came as councils are becoming more vocal over fee costs.

The committee has heard from several worried local authorities over the past few weeks that costs were becoming excessive. Earlier, Audit Commission controller Andrew Foster had also claimed fees were being contained.

Average annual audit costs range from £45,000 for district councils to £210,000 for the metropolitan authorities. London boroughs face a bill of around £200,000, unitaries £150,000 and counties £170,000.

In the past six years, fees have risen annually by just 2.5% on average. But councils fear that Best Value, which will see performance plans audited as well, could increase costs. Conversely, several private sector firms complain that fees are too low, with two pulling out of local authority work.

Wednesday's hearing was the committee's final session. It will publish its findings in April.


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