Communities and local government secretary Eric Pickles has announced that the government will disband the Audit Commission and instead focus on posting local authorities’ spending data online.
Local governments will have to post details of all spending of more than £500 online by January 2011, in a move to increase transparency and help local people hold local authorities and public bodies to account for their spending decisions.
But there is not yet a standard format in which the data should be published.
“At the moment, it is raw data but as time passes you’ll probably see some changes and the way this data is reported will be gradually improved,” said Jan Duffy, research director at IDC’s government insights team.
A lack of internal resources will prove a problem for some local authorities.
Duffy said that when it comes to posting the data online in a structured and comprehensive way, some local governments have in-house expertise that will be able to cope with the new demands, but others may struggle.
“Some have sophisticated IT departments, others don’t,” she said. “So for some, this is going to be a challenge.”
Pickles hopes the move will empower the public, replace bureaucratic accountability with democratic accountability and save the taxpayer £50m a year.
Councils will be free to appoint their own independent external auditors from a more competitive and open market, said Pickles, and there will be a new audit framework for local health bodies.
However, Duffy said that she had mixed feelings about the decision to move auditing to the public sector.
“I’m not persuaded that this will actually lead to a cost saving for local councils,” she said.
“I think the cost savings will be achieved by cutting back on what the private sector does – I think it will do certain audits on a financial basis, but I don’t think it will be doing best practice audits – so it will make it more difficult for local governments to exchange best practices.”
Twenty-eight local governments already provide details on their expenditure and spending figures will be available on the local authorities’ web sites, rather than in a central database.
Pickles has aimed to lead by example, by publishing details of how £314m of taxpayer funds was spent by the Department for Communities and Local Government last year.
As a result of the announcement, the Audit Commission's responsibilities for overseeing and delivering local audit and inspections will stop, the Commission's research activities will end and audit functions will be moved to the private sector.
Letter from Michael O'Higgins to Eric Pickles
Creator: O'Higgins, Michael
Published: 16/08/2010
The following letter was sent this afternoon by Michael O'Higgins to Communities Secretary, Eric Pickles following his letter of 13 August:
The Future of the Audit Commission
Thank you for your letter, which I received on Friday 13 August, following our conversation that morning.
I believe that the Commission has more than fulfilled Lord Heseltine's ambitions for it when he set it up in 1983. While we obviously regret your decision, we can reflect upon the very significant successes that the Commission has had. We feel that it is critically important that, during the coming period of uncertainty, and the transition period, we ensure that local accountability, and the accurate audit of public spending, is carried out effectively.
The Commission is keen to work with Ministers and officials to develop the details of the new systems that you propose. It may also be helpful if we work with the Bill Team as they draw together the draft legislation.
However, we have been disappointed and dismayed at the misleading press reports in response to your announcement. I am sure that you share our concerns at these factual inaccuracies, and would not wish them to be repeated, so we are publishing the attached corrections, with this letter, on our website.
We noted with great interest your suggestion of an employee buy-out to form a mutual organisation and will pursue this avenue energetically.
Eugene Sullivan and I would be happy to meet you, or any of the Ministerial team, and officials, to discuss how your proposals are being taken forward, if that would be helpful.
The Commission was not reluctant to disclose its spending:
The Chairman wrote to the Secretary of State on 9 June offering to publish its own £500+ spending data from July. The Commission was asked by the Department of Communities and Local Government to delay publication to meet CLG's own timetable for disclosure, on 12 August 2010. The Commission has always favoured openness, accountability and disclosure, being among the first to publish the expenses of its Chairman and Chief Executive online.
The Commission informed its staff of the news by meeting, phone and e-mail last Friday:
The Secretary of State phoned the Chairman of the Audit Commission at 10.00 am on Friday 13 to tell him of the intended abolition. A letter confirming this followed at mid-day. The Audit Commission has over 2,000 staff nationwide, many working at client sites, so there was no opportunity to 'call everyone together' as has been claimed. Employees at our main bases, were given face-to-face briefings by senior managers, and many colleagues were contacted by phone. An all-staff e-mail was also sent to ensure every member of staff, wherever he or she was on Friday afternoon, had access to the news before hearing it on TV or radio.
The Commission's spending details do not show 'days at the races':
The Commission made payments to Newmarket racecourse for meeting and conference facilities. These were briefings for local government and NHS bodies on technical issues the might arise from the current programme of audits. The dates were not race days. Racecourse facilities often offer good value for meetings compared to hotels or conference centres. The £8,000 payment to Newmarket was for three events training 90 officers from local authorities and the NHS - around £67 a head. And not a horse in sight!
The Audit Commission did not hire a PR firm to 'lobby' against shadow ministers:
The Audit Commission did not pay a public affairs company to lobby shadow ministers. In January 2009, it asked Connect Public Affairs to undertake a specific piece of work called a Perceptions Audit and Influence Map, to help staff better understand the expectations of the forthcoming Comprehensive Area Assessment. This report cost £9,000 and was an assessment of views among opinion leaders across the political spectrum. It was used by communications staff and not seen by senior managers or members of the Commission Board. Neither Connect, nor any other business, has ever been asked by the Commission to 'lobby' anyone on its behalf.
The Commission has not forced councils to adopt fortnightly bin collections:
The Commission has only ever encouraged local authorities to review their waste management plans and rubbish collection arrangements. It is the Commission's duty to push for maximum value for money in local services. But it holds strictly to the view that it is for local elected members to decide their own policies, which includes the frequency of bin emptying.
Posted by: Eric Pickles 17 Aug 2010
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