Audit Commission

Audit Commission
Name	Audit Commission
Type	Public body
Founded	1983
Dissolved	2015
Jurisdiction	England and Wales
Headquarters	London
Predecessor	Audit Services Board
Successor	Public Sector Audit Appointments

Audit Commission The Audit Commission was a statutory public body established in 1983 to oversee public audit and inspection in England and Wales. It operated alongside bodies such as the National Audit Office, the Local Government Association, the Chartered Institute of Public Finance and Accountancy, and the Treasury (HM Treasury), influencing accountability across local government finance and public services during the late 20th and early 21st centuries. Its remit intersected with institutions including the Department for Communities and Local Government, the Crown Prosecution Service, the District Audit offices, and national inquiries into public sector performance.

History

The Commission was created by the Local Government Finance Act 1982 as part of reforms following debates involving the Audit of Public Bodies and recommendations from inquiries such as reports by the Public Accounts Committee and the Royal Commission on Local Government Finance. Early years saw engagement with bodies including Her Majesty's Treasury and the National Audit Office to clarify oversight of expenditure in the wake of fiscal pressures during the United Kingdom miners' strike era and the broader 1980s public sector reforms led by ministers from the Conservative Party (UK). Throughout the 1990s and 2000s the Commission expanded activities, responding to events involving the Metropolitan Police Service, the National Health Service (England), and local authorities implicated in high-profile failures, working alongside regulators like the Care Quality Commission and the Chartered Institute of Public Finance and Accountancy. Its role evolved amid policy shifts under administrations of the John Major ministry and the New Labour governments of Tony Blair and Gordon Brown, before being abolished following a decision by the Coalition Government (2010–2015) and replaced in part by bodies such as Public Sector Audit Appointments under the Local Audit and Accountability Act 2014.

Organisation and Governance

Governance structures reflected models used by the National Audit Office and corporate governance codes promoted by the Institute of Chartered Accountants in England and Wales. The Commission had commissioners appointed by ministers from the Department for Communities and Local Government and worked with audit firms including the Big Four accounting firms and regional firms like Grant Thornton UK LLP, KPMG, PwC, and Deloitte. Its internal organisation comprised directorates similar to those in the Audit Commission's Practice, audit procurement units, and policy teams liaising with the Local Government Association and parliamentary committees such as the Public Accounts Committee. Oversight was subject to scrutiny from entities including the National Audit Office and legislative bodies like the House of Commons Treasury Committee.

Responsibilities and Functions

Statutory functions paralleled responsibilities held by the National Audit Office for central government, focusing on appointed audits, inspections, and performance evaluations of local authorities in England, police authorities, housing associations, and bodies funded by the National Health Service (England). Core duties included appointing auditors, setting audit fees, conducting value-for-money studies, and publishing reports that informed debates in the House of Commons and influenced decisions by the Local Government Association. Its remit touched on work with the Audit Commission's standards in financial reporting, interaction with the Chartered Institute of Public Finance and Accountancy on professional guidance, and co-operation with regulators like the Care Quality Commission and Her Majesty's Inspectorate of Constabulary.

Methods and Standards

The Commission developed methodologies drawing on auditing frameworks from the International Federation of Accountants and professional standards from the Institute of Chartered Accountants in England and Wales. It promulgated performance indicators, benchmarking tools, and the appraisals used in national studies that mirrored techniques employed by the National Audit Office and private audit firms such as PricewaterhouseCoopers. Its approach combined financial audit, value-for-money assessment, and inspection regimes informed by casework from entities including the Crown Prosecution Service and precedent from inquiries like the Bichard Inquiry and Henderson Review. Procurement and contracting practices reflected public procurement rules influenced by directives from the European Union where relevant before Brexit.

Notable Reports and Impact

The Commission produced high-profile reports that shaped policy debates on social services, housing, waste management, and policing, comparable in influence to studies by the National Audit Office and inquiries such as the Scarman Inquiry. Reports on council finance and performance informed parliamentary debates in the House of Commons and policy decisions by the Department for Communities and Local Government and the Treasury (HM Treasury). Investigations into failures in services prompted reforms in bodies like the Care Quality Commission and changes to auditing procurement that affected firms including Deloitte and KPMG. Its publications were cited in academic work from institutions such as the London School of Economics and policy research by think tanks like the Institute for Fiscal Studies.

Criticisms and Controversies

The Commission attracted criticism from political parties including the Conservative Party (UK) and the Liberal Democrats (UK), and scrutiny from parliamentary committees such as the Public Accounts Committee for its contracting with the Big Four auditing firms and perceived conflicts over consultancy work. Critics compared its remit and independence to that of the National Audit Office and raised concerns similar to those voiced by the National Audit Office about audit market concentration. Debates around abolition engaged stakeholders including the Local Government Association, audit firms such as Grant Thornton UK LLP, and academics from the University of Oxford. Allegations over procurement, fee-setting, and scope of inspection formed part of wider reforms enacted by the Coalition Government (2010–2015) culminating in new arrangements under the Local Audit and Accountability Act 2014.

Category:Public bodies in the United Kingdom