16 August 2010 | Angeline Albert
The UK government intends to disband the watchdog that ensures taxpayers' money is properly spent.
Making the announcement, communities and local government secretary Eric Pickles said axing the Audit Commission will save £50 million a year.
The intention is instead to give councils the power to outsource auditing work to private firms. There will also be a new audit framework for local health bodies.
“These proposed changes go hand-in-hand with plans to create an army of armchair auditors – local people able to hold local bodies to account for the way their tax pounds are spent and what that money is delivering,” Pickles said.
The government aims to put a decentralised audit system in place for the 2012-13 financial year. The legislation needed to make it happen will be sought in this parliamentary session.
Commission chairman Michael O’Higgins said: “While we obviously regret the decision, we can reflect upon the very significant successes the commission has had. Recently, more than £200 million of fraud has been detected through the National Fraud Initiative.
“There is a range of options for the future of the audit practice, including sale, a management buyout and the setting up of some sort of mutual organisation. Indeed the board of the Audit Commission mandated me last month to take soundings of potential purchasers, which has revealed significant interest in acquiring the Audit Commission’s business.”
Some 2,000 people work for the commission, which was set up in 1983, and it is expected that they will move to the private sector.