Audit Commission (England and Wales)

Audit Commission (England and Wales)
Name	Audit Commission
Formation	1983
Dissolution	2015
Type	Non-departmental public body
Purpose	Local public services audit and inspection
Headquarters	London
Region served	England and Wales

Audit Commission (England and Wales)

The Audit Commission (England and Wales) was a non-departmental public body responsible for auditing local public bodies and inspecting public services. It operated across councils, health bodies, police forces and housing associations, interacting with institutions such as Department for Communities and Local Government, National Health Service (England), Home Office, Ministry of Housing, Communities and Local Government, and regulators including Care Quality Commission, Ofsted, and Her Majesty's Inspectorate of Constabulary. The Commission’s remit intersected with legislation like the Local Government Finance Act 1982, Local Government Act 1999, and Police and Justice Act 2006 while engaging with auditors from firms such as PricewaterhouseCoopers, KPMG, and Deloitte.

History

The Commission was created during the premiership of Margaret Thatcher following reviews linked to the Fowler Committee and debates in the House of Commons and House of Lords, reflecting reforms associated with figures like Michael Heseltine and legal frameworks influenced by the Audit Commission Act 1998 and predecessors. Early operations involved scrutiny of authorities in metropolitan areas including Greater London, West Midlands, and Greater Manchester and related agencies such as Metropolitan Police Service, London Borough of Hackney, and Manchester City Council. Throughout the 1990s the Commission’s activities were shaped by interactions with bodies like National Audit Office, Public Accounts Committee, and academic analyses from institutions such as London School of Economics and University of Oxford.

Establishment and Legal Framework

The Commission's statutory basis was rooted in statutes debated in the Parliament of the United Kingdom and influenced by policy papers from the Treasury and white papers under administrations of John Major and later Tony Blair. Governance arrangements referenced case law from the Court of Appeal of England and Wales and statutory instruments tied to Local Government Finance Act 1992 and the Audit Commission Act 1998. Its powers to appoint auditors, set audit codes and inspect services were exercised alongside responsibilities defined by the Audit Commission Order 1998 and oversight by committees such as the Public Accounts Committee and auditors coordinated with the Comptroller and Auditor General.

Functions and Responsibilities

The Commission audited financial accounts of councils like Birmingham City Council and health trusts including Manchester University NHS Foundation Trust, assessed value for money across services delivered by entities such as NHS England, inspected housing authorities including Peabody Trust and examined performance regimes applied to bodies like Transport for London and police authorities such as Merseyside Police. It produced reports on topics intersecting with agencies like Department for Education, Department of Health and Social Care, and charities regulated by Charity Commission for England and Wales, and contributed to national performance frameworks that related to benchmarks used by Office for National Statistics.

Organisational Structure and Governance

The Commission was led by a board appointed by ministers in the Department for Communities and Local Government and included members with backgrounds from organisations such as Institute of Chartered Accountants in England and Wales, Association of Chartered Certified Accountants, National Audit Office, and private firms like Ernst & Young. Operational divisions engaged with regional audit teams across Yorkshire and the Humber, South East England, North West England, and Wales reporting to committees comparable to scrutiny panels in City of London Corporation. Governance incorporated codes from bodies such as Chartered Institute of Public Finance and Accountancy and oversight from parliamentary select committees including the Public Accounts Committee.

Funding and Financial Arrangements

Funding derived primarily from fees charged to audited bodies including councils for London Borough of Islington, health trusts such as Guy's and St Thomas' NHS Foundation Trust, and police forces including Metropolitan Police Service, supplemented by grants from the Treasury and budgetary approvals debated in the House of Commons. The Commission’s financial relationships involved procurement frameworks with firms like Balfour Beatty and contracting arrangements scrutinised by the National Audit Office and subject to audit standards set by International Federation of Accountants influences.

Major Programmes and Performance Regimes

Major programmes included Best Value inspections implemented after the Local Government Act 1999, Comprehensive Area Assessments coordinated with Department for Communities and Local Government initiatives, and joint work with regulators such as Care Quality Commission and Ofsted. The Commission developed performance indicators comparable to metrics used by Office for National Statistics and engaged in shared projects with agencies like Homes and Communities Agency and campaigns intersecting with campaigns by Society of Local Authority Chief Executives.

Controversies and Criticisms

The Commission faced criticism over procurement decisions involving consultancy contracts with Capita, audit quality concerns highlighted by National Audit Office reports, and disputes over fee structures raised in debates within the House of Commons. High-profile controversies included contentious reports on councils such as Rochdale Metropolitan Borough Council and the handling of matters related to the Child Sexual Exploitation in Rotherham scandal, provoking inquiry by bodies including the Public Accounts Committee and commentary from academics at University of Manchester and University College London.

Abolition and Legacy

Abolition was enacted under the coalition government led by David Cameron, with closure arrangements overseen by ministers in the Cabinet Office and final functions transferred to local arrangements and to bodies such as the National Audit Office and the Public Sector Audit Appointments Limited. The legacy influenced subsequent reforms affecting Local Government Finance Settlement mechanisms, audit procurement practises debated in the House of Commons, and ongoing discourse in institutions such as Institute for Government and British Academy on public accountability.

Category:Public bodies of the United Kingdom