Local government audit close to 'breaking point'

By Laura Sharman | 14 July 2021

The timeliness and quality of auditing local government spending is undermining accountability and effective spending decisions, a watchdog has warned today.

In a new report, the Public Accounts Committee said the system of local government audit was close to 'breaking point' with the Government 'increasingly complacent' about the issue.

After just half of local authority audits were completed on time in 2019-20, the committee said the local audit market was at risk of collapse due to its reliance on only eight firms, with two carrying out around 70% of the audits.

Committee chair, Dame Meg Hillier, said: 'As public spending and demand on local services have exploded with the pandemic, the accelerating decline in the timeliness and quality of audit of local government spending undermines that accountability, and undermines effective spending decisions.

'Even before COVID the local government audit market was strained.

'If the market cannot deliver that accountability and clarity about the costs and risks in local government the Government should be more concerned than its slowness to act suggests.

'The Redmond Review of local government audit is a thorough and sensible piece of work but some of its measures won’t be implemented until 2023 – more than four years since it was commissioned.'

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