Councils’ poor spending data waste ‘tens of millions of pounds’

Transparency International prepares report to warn of corruption risk at local authorities

By Tim Wood | 29 April 2016

“Savings of tens of millions of pounds could be made across councils if transparency guidelines were met” – Ian Makgill, chief executive, Spend Network

Local councils are to be slammed for wasting “tens of millions of pounds” because of the poor quality of spending data published by them.

Transparency International UK (TI-UK), the anti-corruption organisation, is preparing to publish a damning report that will highlight the failings by local authorities in how they publish spending data.

A leaked draft of the report seen by Exaro says: “Local government in England is increasingly becoming a significant corruption risk.

“Over the past decade, the UK government has been keen to devolve powers and service provision downwards to authorities. However, the control and oversight mechanisms to ensure that these new powers and resources are used appropriately have been weakened.”

The report, close to being ready for publication, is entitled, ‘Absent oversight: where are all the armchair auditors?’

Ian Makgill, chief executive of Spend Network, which provides subscription services to detailed analysis of expenditure by local authorities and other public bodies, said that the failure to meet the same standards in the presentation of the data makes it far less useful.

He said that standardised data would show up, for example, why one local authority is paying far more than another for the same service. “Savings of tens of millions of pounds could be made across councils if transparency guidelines were met. Provisions for data standardisation were passed into law in 2015. I have not yet seen one single local authority adhere to them in completeness.”

Exaro revealed five years ago how up to £2 billion of spending by local authorities would become exempt from audit. It was a result of the government’s move to scrap the Audit Commission.

Instead, local authorities would be compelled to publish data on their spending, to enable greater public scrutiny, including by “an army of armchair auditors”.

But, the report by Transparency International will point out, local authorities are not making the data available properly. It identifies problems with the supply of the information, its accuracy and accessibility as well as technical problems that are obstructing the full use of it.

“The result of this is that despite being a key part of the UK government’s transparency drive, this data has not yet introduced substantive transparency for local authorities’ finances,” the draft report says.

It adds: “Local authority spending transparency is not as good as it is intended to be, which inhibits citizens’ ability to hold councils to account.”

Data specialists tell the authors of the report that such information can help flag spending irregularities. They point to examples where potential savings of “tens of millions of pounds” were identified, according to the draft report.

Proper availability of spending data would also help identify some of the £147 million a year that the government estimates to be wasted by local authorities in England on mistakenly paying the same invoices twice.

The report by Transparency International will also highlight the potential conflict of interests, as raised by Exaro back in 2011, in the hiring by local authorities of private companies to carry out audits.

Derek Elliott, former head of governance and counter-fraud at the Audit Commission, is cited in the report as saying that standing up against a council in his experience “can be a very frightening thing.” He says that councils very often “turn on you”.

He says that private auditors “may be too worried about having their contract renewed to raise issues flagged by citizens.”

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