A Local Audit and Accountability Act that will lead to £1.2 billion of savings has today (30 January 2014) passed into law following Royal Assent by Her Majesty the Queen. The Act will bring about the closure of the Audit Commission and in its place create a new framework for local audit.
The Audit Commission’s burdensome inspections have already been scrapped, and its audit contracts have been successfully outsourced. The legislation completes the process of devolving down local audit.
The new system will sweep away the old-top down regime and offer greater responsibility and choice for local bodies whilst upholding the same high standards of audit. Local bodies will take responsibility for choosing their own auditors, while the National Audit Office will set the standards for public audit and the Financial Reporting Council will oversee quality.
The Act also introduces new measures to protect the independent free press from unfair competition by town hall newspapers by strengthening the legal status of the existing publicity code for local authorities. This allows for healthy local democracy with robust scrutiny of councils by an independent local press.
In a further boost to local accountability, the Act provides new transparency measures, so citizens and press now have the right to film and tweet from any local government body meeting. The Act also allows for the archaic rules surrounding parish polls to be updated, strengthening local democracy and making it fit for purpose for the 21st century.
Finally, the Act also extends the successful council tax referendum provisions introduced in the Localism Act so local taxpayers can veto excessive council tax increases. The Act will ensure charges imposed on them by external bodies - such as waste disposal authorities, integrated transport authorities, and internal drainage boards - are taken into account.
Local Government Secretary Eric Pickles said:
“This important new law will pass power down to people and replace old fashioned bureaucracy with local choice and transparency. The £1.2 billion of savings we will be making will help reduce the inherited national deficit for the benefit of hard working taxpayers.”
The Local Audit and Accountability Act is the final step in a programme of reforms to local audit that will deliver estimated savings to the taxpayer of £1.2 billion over a 10 year period and help local people hold their councils and other local public bodies to account for local spending decisions. The government’s decision to close the Audit Commission and ask it to outsource all of its work to the private sector has already reduced audit fees by a massive 40%.
Source: Department for Communities and Local Government
Editors note: We are reviewing the new legislation and will be updating our guides and adding new information as soon as practicable.