The Audit Commission needed its wings clipped but abolition was not the answer

By Andy Sawford | 28 March 2018
  • Andy Sawford

As a resident of Northamptonshire, I have watched up close the slow motion crash that Eric Pickles set in train in 2010. He offered local up government to the Treasury for the biggest cuts of any part of Government, then systematically set about making it as hard as possible for councils to cope by phasing out grant support and locking in year-on-year cuts.

Eight years on, most councils are to be praised for the resilience and ingenuity they have shown.

It was unrealistic to think all councils could cope – some have exceptional financial pressures, others do not benefit from the most effective political and managerial leadership which local government has to offer.

Northamptonshire CC is the first council to fall over. If it had been Toys ‘R’ Us, the receivers would already be taking possession.

The council’s leadership are right to highlight the pressures they have faced. Yet these are no greater than other local authorities and it is clear the leadership of the council has been woeful.

The blame game is unpleasant and I do not enjoy seeing any councillor or public servant vilified.

Some of the heat went out of the situation when the council leader did the honourable thing and resigned. She is right to highlight the impact of central government policies, but wrong to show such little humility about local policies which have compounded the problems her council faces.

The Pickles legacy goes further than cuts. Under the guise of localism, the effect of the abolition of the Audit Commission and the poorly-handled transition to new audit arrangements, is also on display in Northamptonshire.

As the shadow minister leading the scrutiny of Mr Pickles’s Local Audit and Accountability Bill, I had some sympathy with criticisms that the Audit Commission had over-reached.

The mighty inspection regime was not all necessary, but the financial audit of councils very much was.

In his haste to abolish Michael Heseltine’s creation, Mr Pickles hurled the baby out with the bath water.

I pressed the Government to see the inadequacies of a free-for-all and helped win the small concession which led to the creation of Public Sector Audit Appointments – a national ‘opt-in’ initiative to procure audit services.

This body is fairly new and relatively toothless, but in time, new legislation will likely confer more powers on it.

This will be too late for Northamptonshire’s residents though, as we now face swingeing further cuts to services and political fallout which could lead to local government restructuring.

The Audit Commission should have had its wings clipped, but abolition was not the answer.

The issue is not just about austerity. The complex landscape of public service delivery, with many joint arrangements all over the country, including combined authorities, along with the push to bring health and local government together, also require sophisticated and specialist public sector auditors, not to mention the prospect of illegal budgets being set in councils where new administrations after this May’s elections feel they have an anti-austerity mandate.

Northamptonshire is the first example of Eric Pickles’ massive real-time experiment going wrong. It will not be the last.

Andy Sawford is managing partner of Connect and a former MP and shadow local government minister

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