Plan to overhaul local audits

A BILL to establish new arrangements for auditing local bodies was included in the Queen's Speech.

The draft Audit Bill will be published during the summer for pre-legislative scrutiny.

It will be debated by MPs as soon as parliamentary time allows.

The legislation would free local councils and other public bodies to appoint their own independent auditors from an open and competitive market.

Local audit reforms, together with the end of inspection work and the disbanding of the Audit Commission, aim to save the public purse around £650m over five years.

A more transparent and accountable local public audit framework based on the private sector model would be established in the Audit Commission's place.

Ministers first announced plans to formally close down the Audit Commission's centralised inspection regime in 2010.

Local government minister Grant Shapps said: "This new Audit Bill will allow us to formally close down the centralised Audit Commission and replace it with a more streamlined and competitive local system.

"Putting councils in control of their own auditing affairs will save the public purse £650 million over five years and bring about the new arrangements that increase their public accountability."

Around 11,000 local public bodies are audited under the Audit Commission's regime, including local government, health and police bodies, national parks authorities and passenger transport executives.

Smaller bodies are handled separately from larger bodies

Halting the Audit Commission's central inspection regime is said to already be saving around £45m a year.

Outsourcing of the Commission's in-house audit practice to the private sector has also commenced.

The government says this will deliver 40% fee reductions for councils when the contracts commence in September 2012, saving local bodies an estimated £250m over five years.


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