By Lucy Phillips
18 April 2011
The government today appointed the financial consulting firm FTI to advise on disbanding the Audit Commission and transferring its audit practice out of the public sector.
The consultants have been hired on a four-week contract following a competitive tender process. They will look at the various options facing the government in its plans to take the local government spending watchdog out of public ownership. This includes the possible mutualisation of the in-house audit practice.
A spokeswoman for the Department for Communities and Local Government said: ‘We have set in train measures to radically scale back centrally imposed, bureaucratic and costly inspection and auditing, saving council taxpayers money.
‘Auditing provides the assurances and confidence that public money is being properly spent. But having an effective audit system is not dependent on it being part of the public sector. The audit function of the commission will therefore be moved into the private sector. Bringing in commercial expertise to support this process is a sensible measure that will help us to secure value for money for the public purse.’
The government claims that abolishing the commission will save the taxpayer £50m a year as well as establishing an audit market that boosts competition and choice.
All these assertions were disputed in the Commons communities and local government select committee’s inquiry into the abolition and future of local government audit.
