By Jaimie Kaffash
16 August 2010
The disbanding of the Audit Commission is a move away from localism and will cost local authorities in the long term, the chair of the local government select committee has told Public Finance.
Local Government and Communities Secretary Eric Pickles announced the abolition of the commission on August 13. He said that the body had become a ‘creature of the Whitehall state’. Councils would be able to choose private firms to perform their annual audits. The commission’s remaining functions – such as value-for-money studies and research – will cease.
But Clive Betts said that the ‘astounding’ decision to scrap the organisation will be costly in the long term.
‘I know the
government has a policy of reducing the number of quangos, but the value-for-money
work that the Audit Commission does should not have been abolished,’ he said.
‘These audits – where the commission looks at a particular service within local government as a whole, and points out good practice – is a very useful service and one that does not seem to be replicated or can be done by anyone else in the future,’ he added.
This will
make it harder for councils to pass around examples of good practice in the
future. ‘What worries me is that there doesn’t seem to have been any analysis.
It seems as though they are thinking that they are going to save money from
staff cuts, but there was no
analysis about how much this work saves local authorities and how this will be replaced,’
he said.
Although local authorities’ annual audits have been done by private firms in the past, Betts said it was his understanding that councils have struggled to purchase outside audit for the same price the Audit Commission charges.
Betts added that the commission promoted localism through sharing good practice, despite the ‘government spin that it told councils what to do’.
He said the select committee is conducting an enquiry into the government’s localism policy and the abolition of the commission will form part of this.
