Eric Pickles is to dismantle the Audit Commission. Here’s the full memo to staff at the Commission. The chief executive is not happy.
Communities and Local Government Secretary Eric Pickles will tomorrow (Saturday) announce his intention to disband the Audit Commission.
He wrote to Michael O’Higgins, the Commission’s chairman today, saying he wants to ‘refocus audit on helping local people hold councils and local public bodies to account for local spending decisions’.
Nothing happens immediately. The government has reappointed two commissioners to serve terms until 31 December 2012.
In a press statement issued under embargo for tomorrow morning he says ‘the Audit Commission’s responsibilities for overseeing and delivering local audit and inspections will stop; the Commission’s research activities will end; audit functions will be moved to the private sector; councils will be free to appoint their own independent external auditors from a more competitive and open market; and there will be a new audit framework for local health bodies. This will save council taxpayers’ money and decentralise power.’
He goes on: ‘As a result of the changes, the Audit Commission’s in-house audit practice, which is the fifth largest audit practice in the country, will be transferred out of public ownership. A range of options will be developed for converting the audit practice into a business independent of Government which could be sold or otherwise transferred into the private sector.
‘A new decentralised audit regime will be established, replacing the Audit Commission and providing genuine support for local democratic accountability.’
Eugene Sullivan, chief executive, said: ‘I am surprised by this decision. The decision has been taken without any consultation with the Commission on the principles involved, especially that of the independent appointment of auditors. The independence of audit, its disinterested pursuit of good value in public spending, its custodianship of best practice in financial management: these are not to be lightly cast aside.
‘We will need to work on the detail of what the government intends. This is not the end of public audit or the audit practice, even if it will be under different arrangements.’
The government says it wants to ‘work closely’ with the Commission, the accountancy profession, councils and the health service ‘to develop the detailed design of new systems, to take forward the transfer of the in-house audit practice into the private sector.’
Michael O’Higgins said ‘this is very disappointing news for all of us, although I have already been thinking about a more independent future for the audit practice. The management team will do all it can to support you. I am proud of the work you and your colleagues have done over so many years.’
Please treat this as confidential, not to be disclosed outside the Commission untill tomorrow.
Jim Pickard
Kiran Stacey
