4 April 2011
A local government think-tank has called for citizens to be given a leading role in the audit regime that follows the abolition of the Audit Commission.
In a report published today, the New Local Government Network warns of a ‘disastrous’ impact on public faith in local government if council finances fail because of the shake-up of the sector’s audit regime. The effect on the government’s localism and Big Society agendas would be equally damning, the report says.
To avoid this, the think-tank argues, the government should allow citizens to sit on local audit committees, which would then approve auditor appointments, as well as create a ‘citizen right of appeal’ in circumstances where auditor independence might be compromised.
Financial reporting should also be simplified to make it ‘more accessible and meaningful’ to local citizens, enabling so-called ‘armchair auditors’ to hold elected officials to account.
The report, Show me the money, came shortly after the government published a consultationinto the future of public audit. It examines what safeguards will be needed after the Audit Commission is abolished and local authorities are able to appoint their own auditor from an external market.
Olivier Roth, NLGN researcher and report author, said: ‘If the new model doesn’t work and we see the deterioration or collapse of some councils’ finances, then public confidence in localism will be seriously undermined. With the audit landscape and public finance in turmoil, the best way to reassure citizens is to let them take the front seat in the drive for stable council finances.’
The NLGN also gave its backing to plans to turn the Audit Commission’s in-house audit practice into a mutual.
Roth added: ‘Without the Audit Commission practice acting as an additional player in the market, there are real concerns that the market could become a closed shop, barring new business entry and raising the cost faced by councils.’
