Local Government Review — May 2014: Local Audit and Accountability Act under scrutiny

Shortly after coming into power in 2010, as part of its drive to reduce the number of public bodies and to save taxpayers’ money, the coalition government announced its intention to close the Audit Commission. True to its word, the government began stripping the Audit Commission of its powers, scrapping its inspections and outsourcing its contracts, and then introduced the Local Audit and Accountability Bill to Parliament in May 2013. The bill was passed on 30 January 2014 and is beginning to take effect. Its main purpose is to put in place a new audit framework for local public bodies in England, but there are a number of other provisions, hidden away towards the end under ‘Miscellaneous’, which are arguably of greater interest.

The legislation underpinning the existing audit regime, including the Audit Commission Act 1998, is repealed. Instead, local public bodies in England, such as county and district councils, fire and rescue authorities and clinical commissioning groups, will have to appoint their own independent auditors, similar to the audit requirements on companies and charities. The auditors will be regulated by the appropriate professional accountancy regulators and the Financial Reporting Council will have overall supervision, mirroring the arrangements under the Companies Act 2006.

The scope of the audit itself will remain very similar to the current audit. Auditors will have to comply with a code of practice and have regard to guidance. The code and guidance are being developed by the National Audit Office…

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