Parliamentary Democracy and Standards in Public Life

Lord Shipley Excerpts

Thursday 11th January 2024 Lords Chamber

[Lord Shipley (LD)]

My Lords, this debate is about standards in public life. I want to focus on audit and risk management in the public sector, particularly in local government. I should remind the House that I am a vice president of the Local Government Association, but I should make it clear that it has had no role in what I will say.

I mentioned audit when we debated the gracious Speech because the hoped-for Bill was absent. Since then, audit has been in the spotlight as never before. Robust audit is central to building public confidence in decision-making and particularly in major investment decisions by public bodies. Yet, too often, audit has become part of the problem. Since the abolition of the Audit Commission 10 years ago and the increased role for private audit companies, standards have slipped. Audits are delayed, too many local authorities have dangerously high levels of debt and risky investments are ploughed ahead without proper scrutiny. Earlier this week, the Financial Reporting Council imposed penalties totalling some £40 million, including costs, for audit failures in 2023. In so doing, its aim is to improve the quality of audits, whatever the sector, and it is right to do so. In local government, the timeliness and quality of audits have declined. Only five local authority audits for 2022-23 were completed by the deadline of September 2023. The Public Accounts Committee had previously expressed concern in June 2023 that only 12% of local government audits for 2021-22 had been delivered on time. There is a problem and it is getting worse.

I want to acknowledge the importance of the work of Oflog, the newly established Office for Local Government, in devising and publishing metrics that will lead to improvement by councils, which can compare themselves with other local authorities, as can the public and journalists. I welcome that, but I have two concerns. What will Oflog do to stop local authorities, such as Woking or Thurrock, getting into unacceptable and unmanageable levels of debt? Will Oflog examine the adequacy of local authority financial controls to prevent huge errors being made in the first place?

A moment ago, I mentioned journalists. When I entered local government, there were two full-time journalists reporting on Newcastle-upon-Tyne City Council. They were part of the checks and balances of our local democracy. Today, a reporter in local government is rare. A few years ago, the BBC funded support for local reporting, but it appears that it is now being replaced by BBC online reporting, in direct competition with the webpages of local newspapers and their advertising revenue. What in this scenario is going to happen to investigative journalism?