The Government does not have sufficient oversight of local authority finances due to the ‘unprecedented’ local audit crisis, according to the Public Accounts Committee (PAC).

The National Audit Office was unable to sign off Government accounts for 2022-23 because only 10% of English councils submitted reliable data for the year, with 187 failing to submit at all.

The PAC warned that the lack of information from councils means the Ministry of Housing, Communities and Local Government (MHCLG) will not be able to foresee financial issues and intervene where appropriate.

The PAC is calling on the Government to set out within six months how it will reduce the levels of missing data from local authorities.

Committee chair Sir Geoffrey Clifton-Brown said the unreliability of data on local government finances ‘hinders transparency for the taxpayer’s pound’.

‘For accounting purposes, the UK public finances are virtually a closed book when viewed through the WGA [Whole of Government Accounts],’ he added.

An MHCLG spokesperson said: 'This government inherited a crumbling local government sector, with no functioning early warning system in place to sound the alarm when a council requires support. That’s why we committed to reforming failing local government audit in our manifesto.

'As part of this overhaul we have already taken decisive action to clear the local audit backlog to fix the system. This on its own is not enough and that is why we have published a strategy setting out our commitment to radically overhaul the system over the coming years through our Plan for Change.'