17 August 2010
The decision to scrap the Audit Commission was a ‘logical’ step in the coalition’s agenda and should not have come as a shock to anyone, local government minister Bob Neill has told Public Finance.
Following the announcement on August 13 that the local government watchdog would be abolished, Neill today said he was ‘surprised there was surprise’ at the decision. He claimed it was a ‘logical follow-on’ from the government’s review into the viability of all quangos and their move away from a ‘centralised top-down tick-box approach’ to public services.
He added: ‘It really shouldn’t be a surprise that we have suggested we could float off the core audit practice, perhaps as a mutual or staff buy-out, because the Audit Commission itself was openly thinking about going into the private sector. People were already thinking that way in the commission.’
Neill’s comments came after the commission’s chair Michael O’Higgins and chief executive Eugene Sullivan said they had been given no indication about its disbanding until the morning of August 13. Local government experts have also expressed dismay at the decision.
O’Higgins yesterday criticised ministers for failing to spell out a timetable for the closure. But Neill said: ‘We made it quite clear to Michael [O’Higgins] that we had been envisaging something like 2012/ 13. The whole point was that we wanted to give the commission early notice so they could let their staff know. It’s a shame they did it the way that they did.’
Neill denied reports of an ongoing rift between the Department for Communities and Local Government and the commission. Their relationship initially took a sour turn amid false accusations that the quango had hired a public affairs firm to handle relations with ministers. Matters were made worse in May when Communities Secretary Eric Pickles vetoed the commission’s proposals to pay its new chief executive a salary of £240,000 – forcing them to abandon the recruitment process.
The minister said the decision to close the body was part of a bigger picture and that they had applied the ‘same test as to everything else’. But Neill added: ‘The top brass at the Audit Commission didn’t seem to understand the way that the world has changed since the financial crisis. It just couldn’t carry on with the sort of expenditure levels on salaries that they were proposing. But that’s not a feud, that’s a statement of our policy which they accept they have to come into line with.’
Neill also reiterated earlier criticism over the commission’s relaying of the news to its 2,000 staff in an email, leading to the announcement leaking a day earlier than planned. ‘There’s always a risk when you feel you have to communicate by email that it can set hares running as much as the answers, unless you have a very swift follow up face to face... We gave them plenty of notice to deal with it appropriately.’
The Audit Commission maintained there was no opportunity to ‘call everyone together' because its staff are scattered at various bases across the country and because of the late notice given by the government. Employees at the main headquarters were given face-to-face briefings and some staff were contacted by phone, a spokesman added.
CIPFA today welcomed the ‘strong governance and public financial management’ brought about by the Audit Commission. Policy director Ian Carruthers pledged to work with the National Audit Office in its new role in overseeing local government audit and ‘to preserve the current regime’s strengths while delivering the potential benefits of the new framework’.Bob Neill will be speaking at the CIPFA Facing the Cuts conference on September 8
