Audit and inspection of local authorities in England : five years after the Local Audit and Accountability Act 2014.

Abstract

The Conservative-led coalition government announced the abolition of the Audit Commission in 2010. Following on, the Local Audit and Accountability Act 2014 set out the new local audit regime. The purpose of this report to the Housing, Communities and Local Government Select Committee is to provide an update regarding the impact of this reform on audit and inspection for local government in England. This is to inform post-legislative scrutiny evaluation scheduled by the Ministry of Housing, Communities and Local Government for early 2020, and broader reviews of audit in the public and private sector that are ongoing. This report was produced through extensive documentation review and interviews with relevant parties as part of Professor Laurence Ferry’s Parliamentary Academic Fellowship 2018/19. The main finding of this report is summarised as follows, “Public audit should, and should be seen to, serve the public interest. Public audit is not just another professional service. The audit and inspection system is not broken in terms of what it does, but the question is whether it does the right thing. Currently, for local government, it is known what local authorities have spent (financial stewardship), but not what local government got for it (Value for Money (VfM) – economy, efficiency and effectiveness), nor whether it has contributed towards fairness in society (equity). This needs to be addressed.” (Ferry, 2019) Underpinning this main finding are seven themes. These are: post-legislative scrutiny/evaluation of change; fragmentation; auditor independence; audit scope; inspection and service improvement; audit market competition and fees; and implications for accountability and democracy of the new regime. It is recommended that the main finding and themes are considered as part of any review. An executive summary and full report are provided.