By David Hencke | 7 July 2011

Government plans to reform the auditing of local government will abolish the 150-year-old public right to demand an investigation into suspected wrongdoing.

This right led in the 1990’s to the resignation of Dame Shirley Porter, Conservative leader of Westminster council, who was accused of ‘gerrymandering’ in the ‘homes for votes’ scandal by selling council houses only in Tory marginal wards to prevent Labour winning control of the council. The long-running case, which she appealed to the House of Lords, ended with her being surcharged £12.3 million.

The government’s consultation paper on the proposals to scrap the Audit Commission says that investigating cases, following an objection by a member of the public, costs too much. It says that people can instead complain to the local government ombudsman and, in some cases, the information commissioner.

“The rights for local government electors to object to the accounts are both out-dated and over-burdensome”
– Department for Communities and Local Government

It says: “Auditors have only limited discretion to refuse to investigate objections, but the costs of investigating objections… are recovered from the local public body.”

“We consider that the rights for local government electors to object to the accounts are both out-dated and over-burdensome on auditors, local public bodies and council taxpayers.”

Other measures proposed, however, would increase transparency. Councils are already subject to the Freedom of Information Act, and the government plans to extend it to cover public audit to some extent.

There would, however, be an exception where “costs associated with responding to ‘freedom of information’ requests… could have an impact on audit fees. We would also need to consider whether this could be detrimental to the auditor and audited body’s relationship.”

The consultation document adds: “We also envisage that local public bodies should be required to publish their accounts and the auditor’s report on the website.”

Grant Shapps, housing and local government minister, defends the package in his forward to the consultation paper: “Local public bodies will become increasingly accountable for their spending decisions to the people who ultimately provide their resources.”

Meanwhile, the House of Commons communities and local government committee today published a report examining plans to abolish the Audit Commission.


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