Among the multi-layered answers to “how did we get in this mess?” over Croydon’s, and other local authorities’, financial crises, Big Eric Pickles and his 2011 Localism Act goes a long way to explaining how Town Halls across England and Wales, once the heart of civic pride, descended into such a shambolic state.
At the centre of Tory minister Pickles’ reforms was the abolition of the Audit Commission and, with it, the district auditor, whose role it was to provide an external check that councils’ accounts added up.
Under Tory austerity, with councils squeezed of cash from government, they were now expected to hire in private audit firms. And you know how well that has worked…
Covid did not help, with firms such as Grant Thornton, Croydon’s external auditors, unable to keep up with the backlog of local authority accounts. Croydon’s accounts have been published late for five successive years now.
Quietly, something is being done to try to fix the mess created by Pickles and the Tories, and provide more timely public scrutiny and checks on Town Hall finances.
The English Devolution and Community Empowerment Bill, published last week, outlined the government’s plans for a new Local Audit Office, 10 years after Pickles closed the Audit Commission.
Claire Holland, the Labour leader of Lambeth Council who is chair of city-wide body London Councils, welcomed the Bill, describing it as “important”.
Holland said: “London boroughs fully support these aims.”
New powers: local government minister Jim McMahon with the local devolution bill last week
But some who have delved into the detail of the Bill have expressed concerns that the draft legislation “is worryingly thin on detail”, especially over its enforcement powers.
The scrapping of the Audit Commission in 2015 has “resulted in declining quality of audits and a backlog that has obscured up-to-date information of the entire sector’s financial position”, according to public interest co-operative Research for Action.
According to the Bill, the Local Audit Office will take on responsibility for auditor appointments, fees and maintaining a register of audit providers. It will also prepare the Code of Audit Practice, and could itself become an audit provider.
Some of the government’s previous commitments on audit transparency and accountability – such as local audit health and public interest reports – have not been included in the legislation. Grant Thornton’s PIP in October 2020 was the first, official admission that Croydon’s finances were in a state of collapse, prompting the resignation of the then council leader and followed soon after by the council’s first Section 114.
Research for Action’s FJ Malinen said: “The government could have not acted sooner to create a national body that will simplify the current audit regime that has led to a crisis.
“It is good to see that the bill leaves open the possibility for the Local Audit Office to act as a public provider of audit, but we are concerned this will not be enough to tackle the failing market if private provision remains the norm.
“The draft legislation is worryingly thin on detail about the Local Audit Office’s regulatory role, especially what comes to enforcement powers.
“We believe the Local Audit Office should have a remit for carrying out regular investigations on cross-cutting issues, tackle fraud and corruption, and set up a complaints and appeal process for audit that is open to the public.
“The government has previously said that the Local Audit Office would be underpinned by values including transparency and stronger accountability, but we do not see any detail on how it will put those values into practice. There is no mention of the public or civil society’s role as stakeholders, or access to information or public accountability rights.
“Audit reform should put public interest at its heart.”
Read more: Ministry planning one-year stay in Croydon for Commissioners
Read more: From tantrum to grovel, Perry shifts posture for Commissioners
Read more: Agency spend scandal: Perry blasted for ‘ridiculous shambles’
PAID ADS: To advertise your services or products to our 10,000 weekday visitors to the site, as featured on Google News Showcase, email us inside.croydon@btinternet.com for our unbeatable ad rates
- If you have a news story about life in or around Croydon, or want to publicise your residents’ association or business, or if you have a local event to promote, please email us with full details at inside.croydon@btinternet.com
As featured on Google News Showcase
- Our comments section on every report provides all readers with an immediate “right of reply” on all our content. Our comments policy can be read by clicking here
Inside Croydon is a member of the Independent Community News Network
It is good to hear something is being done, but unfortunately with this Administration it seems more like evolution of the previous administrations policy rather than a radical reappraisal. When there was a Central National Administration with oversight of best practice in place it could issue reports and advice on a better course of action. The Local Audit Office just sounds like bringing the auditing of accounts back in house to make reporting more timely, but probably still just contracted out as they are now and not with the pressure of oversight acting as a stimulus to act with best practice rather than the shoddy expediency of delivering what the interested parties want to hear until it is too late again.
Point of order – Croydon has regular internal audits and publishes them here https://www.croydon.gov.uk/council-and-elections/budgets-and-spending/reports-and-reviews/internal-audit-reports/2024-2025 Does anyone read them?
As the case of Huw Rhys Lewis suggests, the answer must be “no”.
The one about the Borough of Culture is a laugh. The auditors found that
• No Business Case had been approved for the Programme, which established key criteria and the Programme plan.
• For a Programme of this size and strategic importance, a detailed schedule was not in place to help ensure the effective management and control over programme delivery.
• At the time of the audit (February 2023), the Programme did not have a detailed resource plan and existing resources were strained.
• A communications strategy or plan was not in place and key stakeholders had concerns over the delays in communications.
• There was no work breakdown structure or baseline produced for performance management over the Programme.
And what was the council’s response to these issues? The Director of Culture and Community Safety, Kristian Aspinall, said that as the audit report was delivered six months into the £3.8 million program, and was now all in the past , “I think it just needs to be closed”.
That someone can be so blasé about these issues and that amount of money and still have a job shows how rotten Croydon council is.
Was the report ever presented to a council committee?
Well what has that got to do with what happened at Croydon.
You can produce as many internal audits as you like, but if you are unable to identify a failure in financial management control that leads to the bankruptcy of the Enterprise. Then they are not worth the paper they are written on.
The Conservatives got rid of the Audit Commission to make it easier to hide that they were starving Councils of funds and they were forcing Councils into risky schemes to try to make up the shortfall. (e.g. Brick by Brick)
The return of a Local Audit Office should be a good move, but will the Government give it the powers it needs?
Labour are continuing the Conservative policy of refusing to give Councils the money they need and Labour are now forcing Councils to put up Council Tax and sell off our assets to private companies.
Will they want that exposed? Or is the Local Audit Office just going to be a way of attacking Councils who don’t want to sell off public assets on the cheap to Labour’s rich friends?
Gove (remember him?) admitted that the Pickles reforms had failed.
Whatever became of his new sub-department that he said he would set up to untangle the mess? And how many millions was spent on that waste of time?