Councils Fear Whitehall Regulators

By Johnstone, Richard | Public Finance, June 2012 | Go to article overview

Councils Fear Whitehall Regulators


Johnstone, Richard, Public Finance


Ministers have been urged to rule out greater Whitehall monitoring of local government after fresh concerns were raised that the abolition of the Audit Commission could lead to increased central oversight

The government confirmed its plans to scrap the watchdog in the Queen's Speech on May 9. A draft Bill to wind it up and usher in the new audit regime for England is expected to be published in the summer. This will allow councils to appoint their own auditors and, in the interim, agreements have been reached to outsource the commission's audit work to private firms.

But both the Local Government Association and audit experts have highlighted dangers with the changes, warning that Whitehall departments are starting to take on some regulatory functions.

LGA chief executive Carolyn Downs has said that she is 'quite worried about the future' following the reforms.

Speaking at the launch of the Society of Local Authority Chief Executives' Future of public audit pamphlet, Downs said that she was concerned that 'Whitehall departments are setting themselves up as regulators'.

She singled out the Department for Education, saying it was introducing performance measures, such as adoption scorecards, that councils have to comply with. Coupled with the existing regulators, such as Ofsted and the Care Quality Commission, 'some departments are working in that space of regulators', she said. 'I'm not sure they have either the capacity or the understanding to undertake the role in the way that the Audit Commission did.'

George Jones, emeritus professor of government at the London School of Economics, told Public Finance that he shares this fear of greater Westminster scrutiny. Jones, who also contributed to the pamphlet, said government should ensure that the legislation reinforces the independence of local audit and accountability to remove the 'danger* of more central examinatioa

He said that he favours local authorities appointing their own auditors, and added: 'What we don't want is local authorities to be in any way accountable to the Public Accounts Committee [when the Audit Commission is abolished].

'Parliament has set up local authorities with their own accountability with their local voters and we don't need the PAC or National Audit Office messing around trying to audit local authorities.'

PF understands that the PAC is set to examine the draft Bill to abolish the commission to assess its impact on local NHS and police bodies, which the commission currently oversees. …

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