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99% councils miss accounts deadline in ‘public admin disaster’

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CROYDON IN CRISIS: Only 101 people in the country are qualified to carry out essential audit work on public bodies, the lack of proper scrutiny putting £100bn of public spending at risk according to a report from a Commons committee

Croydon is among dozens of local authorities across England who, despite being in deep financial problems, have no up-to-date accounts signed off.

In arrears: Croydon Council’s last audited accounts date from before the covid pandemic in 2019

A shocking report in today’s Grauniad claims that 99% of English councils did not have their 2022-2023 financial accounts signed off by the deadline this year.

This has in effect left £100billion of public spending lacking proper checks and audits.

Croydon is among these councils.

None of Croydon’s annual accounts have been signed off by its auditors since before the first covid lockdown. Croydon last had its accounts audited and approved in 2018-2019.

When Eric Pickles, the Tory minister for local government, introduced “localism” and abolished the Audit Commission, he unleashed financial chaos and catastrophe that has seen Croydon and six other councils issue effective bankruptcy notices since 2020 – Thurrock, Northumberland, Nottingham, Slough and Woking; while in 2018 Northamptonshire proved to be such a financial basket case that the authority was scrapped and replaced.

Massive disaster: Eric Pickles

The head of the civic accountancy body has described the impact of Pickles’ “reforms” as a “public administration disaster”.

Without properly scrutinised accounts, it is feared that even more councils will fall into financial black holes, and that poor managements and speculative financial deals – of the kind that has brought down Croydon, Thurrock and Woking, among others, will go unchecked.

“More than 900 sets of accounts for councils and other public bodies going back to 2017 remain unaudited,” The Guardian reports, having confirmed that Slough and nine other public bodies have not had their accounts audited for the past five years. These include Spelthorne and Warrington, both of which have borrowed more than £1billion to invest in commercial schemes.

Among those missing four years of audits are Woking, which went bust this year with debts of £2billion, and Croydon, where debts are £1.6billion and Section 114 notices have been issued in 2020 (twice) and 2022.

As has been reflected in Croydon, where the external auditors Grant Thornton have been overwhelmed by the workload of past accounts and the cash-strapped council’s repeat bankruptcies, there are often not enough external accountants available to keep up with the work demands. There are only 101 people in the country qualified to carry out such work.

“Ministers are considering an amnesty whereby incomplete past audits would be cancelled to clear the backlog,” according to The Guardian.

“This lack of scrutiny of councils’ finances removes any early warning system for local authorities in financial difficulty,” according to Meg Hillier MP, the chair of the Commons’ Public Accounts Committee. “The implications for public services do not bear thinking about at both the local and national level, and for the lives of people who depend on them.”

As The Guardian reports: “The PAC warned in June that the audit backlog was hindering the accountability for £100billion of local government spending. It said more “horror stories” like the insolvencies in recent years of Croydon, Slough, Thurrock and Woking councils could be going undetected as a result.”

Only three councils managed to complete their 2022-2023 audits on time, out of more than 300. The Guardian says that 150 councils have not been audited since 2020-2021, 61 since 2019-2020, 22 since 2018-2019 and 10 since 2017-2018.

From today’s Guardian

“Before the abolition of the Audit Commission, all local authority accounts were signed off on time and had been for decades,” said Rob Whiteman, chief executive of CIPFA, the Chartered Institute of Public Finance and Accountancy.

“It’s hard to think of a public service reform that has done so much damage.”

A Department for Levelling Up, Housing and Communities spokesperson told The Guardian: “We are taking action to tackle the local audit backlog and make the system more sustainable and timely. In July, the minister for local government wrote to the sector and the chair of the levelling up committee to share proposals to address these issues, agreed in principle with key partners. We intend to begin implementing changes following further engagement.”

Read more: We are witnessing the long, slow death of local government
Read more: Croydon needs deal that could set precedent for all councils
Read more: Croydon is in a right Pickles and it is easy to work out why


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