Draft Local Audit (Appointing Person) (Amendment) Regulations 2021

Jeff Smith Excerpts

Monday 22nd November 2021 General Committees

[Jeff Smith (Manchester, Withington) (Lab)]

It is a pleasure to see you in the Chair, Mr Mundell, and you will be pleased to know that I intend to be brief in my remarks.

I thank the Minister for her introduction, and I thank the officials who talked me through the regulations last week. The Opposition recognise that the 2020 review by Sir Tony Redmond found concerns about the state of the local audit market and made a number of recommendations to address that, and that this statutory instrument is a result of those recommendations. We also recognise the importance of effective audit procedures so that stakeholders, and ultimately residents and voters, can hold local authorities to account for their performance, so we will not be opposing the statutory instrument.

We note that a large majority of respondents to the Government’s consultation, including stakeholders and local authorities, were supportive of the proposals, and so is the Local Government Association. The LGA agrees with the idea of a framework of set-scale fees rather than a large number of variations within a year, and there is general support for the flexibilities in relation to audit timescales and the period of appointments, so we will be agreeing with those proposals.

I have two questions for the Minister. First, I am aware that the Government have earmarked £15 million in extra resources for local authorities to deal with the potential extra costs of audit this year. That funding needs to be ongoing. Can the Minister give any indication about whether the Government plan to roll it over into future years?

Secondly, this is only one part of the response to Sir Tony Redmond’s review. There were a number of other recommendations, not all of which have been as well supported or as unanimously accepted as the proposals that we are debating. Some are quite significant issues, such as a new regulatory body for audit. I know that the Government were supposed to respond to the big parts of the review earlier this year. I may have missed it, but I have not seen that response. Can the Minister give us an indication of the full details of the Government’s response to those major issues, or of the timescale to achieve the vision set out in the review?

Finally, these regulations may well result in cases of fee increases for audit. It is essential that local authorities are able to carry out their functions, such as audit, properly. I acknowledge the £15 million for this year, but we really need our councils to be properly funded for the long term. We have now had 10 years of underfunding of local authorities, and it is the area of government that has been hit hardest—first by austerity and now, under huge challenge, by the pandemic. It is not just local services for residents that have been hit, but the ability of local councils to carry out their essential functions properly. We really need the Government to recognise that, and at long last to start funding our councils properly.