IfG criticises timetable to scrap Audit Commission

11 Mar 14
The government’s ‘insanely ambitious’ timescale to wind up the Audit Commission will spread many of its functions across Whitehall, reducing their effectiveness, an analysis has found.

By Richard Johnstone | 11 March 2014

The government’s ‘insanely ambitious’ timescale to wind up the Audit Commission will spread many of its functions across Whitehall, reducing their effectiveness, an analysis has found.

The Institute for Government said abolition of the commission mirrors the fate of other improvement agencies closed in the last decade, including the National Police Improvement Agency and the NHS Modernisation Agency.

Today’s Dying to improve report warned that closure of the commission, which will be completed by the end of March 2015, removes the important principle of independent appointment of auditors to local government and the protection of public money this affords.

Nicholas Timmins, a senior fellow at the institute and report co-author, highlighted that once the commission is abolished an interim body will be formed to take over existing outsourced audit deals. ‘So there remains a chance that a genuinely independent audit function could arise like a phoenix from the ashes of the commission.’

Other functions are also set to continue and will be redistributed across the public sector, he noted, with the National Audit Office assuming statutory responsibility for the Code of Audit Practice and the Cabinet Office adopting the National Fraud Initiative.

Such a split could impede the effectiveness of the programmes, the report warned. ‘The timetable for the commission’s abolition has proved insanely ambitious,’ it stated.

‘In practice, most if not all of the commission’s functions will continue, though scattered, probably less effectively.’

There are a number of reasons why improvement bodies are scrapped, including mission creep and poor decision-making, the institute said.

The lesson from previous abolitions is that scrapping agencies should not be the first resort, and, if a decision to abolish is taken, successor arrangements must be clearly thought through.

Agencies are more likely to succeed if they have clarity of purpose and governance alongside active monitoring of their purpose and function by the relevant department to measure effectiveness, the IfG concluded.

Tom Gash, the institute’s research director and other report author, added Whitehall restructures are now so common that the civil service must develop greater central expertise in both setting up agencies and managing closures.

‘This means being clear about the purpose, accountability and governance of these bodies and measuring and demonstrating cost-effectiveness on an ongoing basis,’ he said.

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