The Institute of Chartered Accountants in England and Wales (ICAEW) has called on the Government to ‘tackle the crisis’ in local authority financial reporting and audit.
Following the ICAEW's representation to the Treasury ahead of the Autumn Statement, the organisation's chief executive, Michael Izza, has written to chancellor Jeremy Hunt.
Mr Izza said the Government must increase the resilience and sustainability of public finances and a 'key component' of this would involve addressing problems in local government finance.
He said: ‘The structural failures in the local audit system, with nearly a thousand delayed audits, may have serious financial consequences for communities across England.
‘We hope the chancellor will use the Autumn Statement as an opportunity to increase the resilience and sustainability of the public finances, with a cross-government effort to clear the mountain of delayed audit opinions to get the system back on track.’
The institute also urged the Government to replace competitive bidding for short-term funds with long-term funding streams for councils.
The ICAEW said: ‘The current system sees councils spend time and money submitting bids for relatively small sums, and further resources are then used in Whitehall assessing the bids.
‘ICAEW argues that this inefficiency diverts councils and central government from delivering for local communities.’
Mr Izza told the chancellor: 'Without attention to how local government is funded, tangible and sustainable reductions in regional inequality are not possible.'
