England & Wales

The Audit Commission: past, present and future

On coming to power in May 2010, the coalition government lost no time in announcing a “bonfire of quangos”, but few expected the Audit Commission to be caught up in the conflagration. 

However, its inspection functions in particular were considered to clash with the government’s localism agenda.  In June, the Commission was instructed to stop Comprehensive Area Assessments and, on 13 August, the government announced plans to scrap the Commission completely.

On 21 February 2011, the government published The audit and inspection of local authorities, setting out how it is “taking forward the establishment of a new, more localist, audit regime for local public bodies, and the underlying principles on which the Government believes any such regime should be based”.

But is localism an effective approach to audit and inspection?

Provided effective safeguards are in place to maintain the quality and probity of local government audits, there seems little reason why a local council should not directly appoint its auditor, rather than have an auditor appointed by a central body. It could be argued that this is another example of benefiting the private sector at the expense of public provision but, if local authorities are to have a realistic choice over their external auditor, it is difficult to make a case against the proposals.

Far stronger arguments can be made over the abandonment of the inspection regime as  inspections gave local authorities some idea of how they were performing in a wider context.

It is true that inspections had become a burden on the inspected body and could be criticised for failing to fully take account of local factors. However, the assertion that the greatly increased availability of data will enable local residents to make an informed judgement as to how the council is performing on service delivery must be open to challenge.

It depends so much on the time and ability of individuals to both analyse available data and  to relate this to the quality of service the local authority is providing. It gives little opportunity for comparing the service provision in a wider context. It is perhaps a simplification to suggest, as the Memorandum does, that accountability via the ballot box will ensure that service delivery will in future meet local needs and aspirations.

Whilst it is accepted that localism means service standards will vary across the country, it could be argued that an external assessment of local authority services is still necessary to ensure that vulnerable groups do not lose out.

For localism then to become an effective approach to audit and inspection, local government needs to ensure that its self-directed system of improvement is robust, operative and efficient.

This post is based on a LGiU members briefing written by Sheila Camp. Briefings are available through individual subscriptions and accessible to all officers and elected members of our member authorities. For more information on joining the Local Government Information Unit please follow this link.