More than 370 local audit opinions for 2021-22 are still outstanding despite recent measures designed to tackle the backlog, senior Whitehall civil servants have revealed.
At a meeting of the Public Accounts Committee (PAC) last week, MPs were told most local authorities have still not completed delayed audits.
A recent letter sent to council chiefs by the Department for Levelling Up, Housing and Communities’ (DLUHC) director general of local government, Catherine Frances, revealed some councils have not completed an audit ‘in several years’.
In the letter, seen by The MJ, Ms Frances wrote: ‘This is clearly not in the interests of the council or the taxpayers.
‘We expect audit firms and local authorities to work together to resolve this, and I urge you to make every effort to collaboratively consider where historic issues are compounding delays unnecessarily and, where they are, to put in place an action plan and timetable to ensure these are swiftly resolved.’
Former DLUHC permanent secretary, Jeremy Pocklington, told MPs the backlog was triggered by changes to the wider audit market following failures such as Carillion.
He added that increased demand on auditors, stronger regulation, lower audit fees, reduced local government capacity due to financial challenges and a ‘lack of expertise’ at some councils then compounded problems.
But Mr Pocklington rejected PAC chair Meg Hillier’s suggestion that DLUHC had been ‘asleep on the job in not seeing these problems coming’.
Audited 2022/23 accounts have to be published by the end of September but DLUHC’s new permanent secretary Sarah Healey said councils would not be able to complete audits until backlogs were cleared.
Ms Healey said: ‘We are already working on next steps and we now need to ask all of our local partners to roll their sleeves up.
'It is a strained and difficult audit market.’