Audit Commission

Lord Christopher Excerpts

Thursday 14th October 2010 Lords Chamber

[Baroness Hanham]

My Lords, in the current financial climate, it makes absolutely no sense for Whitehall to own the fifth largest audit practice in Britain, particularly when it provides services that can readily be obtained in the private sector. The commission’s monopoly on appointing local auditors weakens competition and also weakens the localism that should be available to local government. Certainly in my time in local government, one of the things that irritated me most was the fact that you could not choose your own auditors. Now there will be much better and more open ways of doing that.

[Lord Christopher]

My Lords, I declare a past interest in that I have been a member of the Audit Commission. The noble Baroness has said exactly the opposite of what the noble Baroness, Lady Thatcher, said when she was Prime Minister in 1981 and set up the Audit Commission in 1982. I quote Mr Pickles when he said:

“I'm not interested in research and evidence—I'm here to take decisions”.

We know the basis on which this decision has been taken. If the noble Baroness, Lady Thatcher, was wrong, how, according to what the Minister has described, do the Government aim to take forward the then three aims of the noble Baroness, Lady Thatcher—namely, to raise and maintain the quality of audit, to increase cost-effectiveness, and, above all perhaps, to get value for money? How will each of those aims be advanced?

[Baroness Hanham]

My Lords, 1981 was quite a long time ago, just in case that has not been appreciated. Also, since then, the Audit Commission has assumed far greater roles than my noble friend Lady Thatcher ever envisaged it doing. It is now our view that it is time to put audit into the hands of local authorities so that they can demonstrate for themselves that they can choose auditors. Some inspection powers will still be in the hands of Ofsted and the Care Quality Commission to ensure that there is value for money and propriety in those services. Local authorities will have to take a very keen interest in how their services are run, the value they get for the money they pay, and the standards that they achieve.