The fall-out from the proposed abolition of the Audit Commission rumbles on, with a Commons select committee set to report on the future of auditing, and questions being raised over the timetable. David Walker, the commission’s former communication chief, gives his own take on what happens next
A stinging recent report from the Commons public administration select committee (PASC) on the Government’s shambolic quango cull was a welcome sign that backbench MPs, including Tories, are going to be uppity during this Parliament.
Cynics might say PASC’s chair had his reasons. Bernard Jenkin – son of the former environment secretary, Lord Patrick Jenkin – must have been disappointed not to get a minister’s job last May.
But Westminster-watchers are already calling this the most fractious parliament in recent times – and they have hardly got going yet.
But will bolshy MPs favour the cause of local government? That partly depends on local government’s lobbying strength, and that has now been depleted, thanks to the LGA’s decrepitude and communities secretary Eric Pickles’ assault on councils’ public affairs spending.
Still, this spring may still see fireworks over the Palace of Westminster. MPs look likely to seize the chance to embarrass the Government when the communities committee, chaired by Labour MP, Clive Betts, reports on what happens next to local audit and inspection.
It won’t spend long peppering Mr Pickles with criticism for the lazy amateurism with which he announced the Audit Commission’s abolition last year.
But that’s water under the bridge, even if Mr Pickles is now ruing his preference for headlines over consultation. Abolition legislation has not even been drafted – and the Audit Commission may stagger on past Mr Pickles’ December 2012 deadline. There’s even talk of it surviving, in some depleted form, for the good reason that CLG officials can’t think of what else to do — and that becomes more politically feasible if Mr Pickles was to move.
The hiatus, however, does gives the Commons communities committee an opportunity to open up debate. It’s not just institutional arrangements in play, but what it is auditors do.
MPs are going to have to get into the cost and extent of professional oversight of local accounts, as well, let’s hope, into inspection and data-gathering. And not before time. We surely can’t continue with yesterday’s audit and inspection set up in the context of the Localism Bill. What consequences should Mr Pickles’ promise of allowing councils to choose their own auditors have for inspectors?
Take the respective ‘visions’ of the local authority future proffered in north London by Tory Barnet LBC, and south of the river, by Labour Lambeth LBC – other councils are on the same page, but these two have set out their stall with clarity.
Both easyCouncil and the ‘Co-operative council’ involve hollowing out direct provision of services, Barnet to the benefit of the private sector, Lambeth in order to get more participation by community groups and voluntary bodies.
Both plans subvert conventional ideas about audit and inspection.
In Barnet, who follows the money out of the council door into the ledgers of private firms? Are companies to be inspected?
Meanwhile, Lambeth says out loud that ‘information gathered from citizens will be given equal weight with data gathered by the council and professional judgment’. Including financial data? It is ‘not appropriate that services be required to report large amounts of information or performance data to senior managers’.
England cannot go it alone on audit. International norms have to be upheld – at a moment when the European Commission is demanding private companies be stripped of the right to choose their own auditors, in order to fend off sweetheart deals of the kind being blamed for the financial collapse.
It is a time of ferment for the accountancy profession, and by abolishing the Audit Commission – which arguably stretched public audit beyond its natural shape by getting into use of resources and value for money – Mr Pickles has inadvertently forced a review.
Mr Betts and his fellow MPs have a great opportunity, and they have, interestingly, appointed to advise them two livewires in the form of the ACCA’s Gillian Fawcett, and Ron Hodges from Sheffield University.
But will the witnesses step forward? The Audit Commission itself, desperate not to offend Mr Pickles has, so far, said nothing about life after death. Its evidence looks likely to oppose the principle of councils appointing their own auditors – but the commission is increasingly compromised by its efforts to secure a future for its professional staff, amid confusion about a buy-out of its audit practice.
Among other voices, CIPFA, a highly-interested party, given the number of its members affected, seems also to have sworn a vow of silence.
A test for the MPs will be their handling of parliament’s own creature, the National Audit Office (NAO).
Having given its approval to Mr Pickles’ abolition announcement, the NAO has since backed-off the consequences – a big extension of its responsibility for audit of local spending.
Expect Mr Betts to have words with his Labour colleague Margaret Hodge, chair of the public accounts committee, which so far, has toed the NAO line of refusing to help clear up the local audit mess.
David Walker is former director of communications at the Audit Commission
