Audit Commission plans to slash fees

10 Dec 10
The Audit Commission is proposing to cut its audit fees by up to 20% next year, saving public bodies £11.8m
By Lucy Phillips

13 December 2010

The Audit Commission is proposing to cut its audit fees by up to 20% next year, saving public bodies £11.8m.

The reduction comes on top of £12.8m in rebates and inspection waivers already agreed for the current year, giving a total of almost £25m in savings across the two years.

The watchdog published its consultation on charges for 2011/12 on December 10. The plans include cutting fees by up to 20% for local government bodies spending less than £6.5m and between 2% and 10% for other local government and health bodies.

Local authorities, police and fire and rescue services will be given an extra 3% reduction in fees to reflect the fall in audit costs associated with the introduction of International Financial Reporting Standards. Rebates will also be issued on work related to the Comprehensive Area Assessment, which was scrapped in May by the new government. 

Larger national park authorities, integrated transport authorities, probation trusts and strategic health authorities are among bodies that would experience a fee cut of between 10% and 20%.   

The commission also revealed that the Department for Communities and Local Government has agreed that any costs associated with the abolition of the watchdog should not fall on fees.

The Audit Commission is set to be abolished in 2012, with its audit practice moved into the private or third sector. There are expected to be significant transitional costs. 

Commission chair Michael O’Higgins said: ‘The commission wants a simplified approach that will deliver clear and transparent savings to the bodies it audits and inspects. For 2011/12 it will take each audited body’s 2010/11 fee and reduce it by the proposed cuts. This will result in savings for audited bodies while allowing the commission to wind down its business in an orderly manner.’

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