Big ‘no’ to Audit Commission 2.0

Sir Tony Redmond’s proposal for the establishment of a new independent regulator for local audit – the Office of Local Audit and Regulation (OLAR) – seems to have been put on the back burner by the Ministry of Housing, Communities & Local Government.

It stressed the idea of the Audit Commission 2.0 goes against the government’s long-standing intention not to create new arms-length bodies.

The ministry explained the creation of a new overarching body would mark a significant departure from the 2014 Act, adding: “This department remains committed to a locally-led audit regime which enables genuine local accountability by residents and taxpayers. We do not wish to re-create the costly, bureaucratic and over-centralised Audit Commission.”

In his report Sir Tony made 23 recommendations to help improve quality, timeliness and sustainability of local audit, and the transparency of local authority accounts. To support many of the recommendations the department has put aside £15 million in additional funding in 2021/22. This will help local bodies meet the anticipated rise in audit fees in 2021/22, driven by new requirements on auditors including the 2020 Code of Audit Practice, and enable local authorities to develop standardised statements of service information and costs.

CIPFA is worried that the government’s response “largely kicks the can down the road on one of the more pressing concerns for the sector – the absence of strong system leadership.” It believes that the implementation of OLAR would strengthen system leadership of local audit, enhance accountability, and improve assurance without recreating the bureaucracy of the Audit Commission.

You can read the government’s full response at: