Government scraps Audit Commission to promote transparency

Local authority IT teams may struggle with new workload

All local government spending of more than £500 will be posted online by 2011

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.