Responding to the Draft Local Audit and Accountability Bill, the Chartered Institute of Public Finance and Accountancy (CIPFA) has expressed significant concerns about its potential impact on local accountability.
In respect of the local public audit section of the Bill, CIPFA previously raised its concerns both in its response to the public consultation on the draft Bill and in evidence to the 2012 Pre-legislative Scrutiny Committee. However, few if any of the concerns have been addressed in the Bill as now presented.
Principal amongst these concerns is that the wider scope of public audit has not been embedded in the Bill. This wider scope goes further than private sector audit in requiring regularity, propriety, probity and value for money to be considered as well as providing the audit opinion on the financial statements.
Ian Carruthers, CIPFA's Director of Policy said:
“Although the Bill does provide some clarity on the future shape of local public audit in England, one of its worrying features is that the wider scope of public audit is not strongly embedded, an omission which might actually serve to weaken rather than strengthen public accountability.”
Another aspect of the Bill which has implications for public accountability concerns Council Tax. Billing and major precepting authorities are already required to hold a referendum if they want to increase council tax above a certain threshold determined by central government. Levying authorities, such as waste or national parks authorities, are currently exempt from these arrangements. The Bill proposes that levying authorities’ increases within Council Tax should in future count towards this threshold.
Ian Carruthers, CIPFA's Director of Policy, commented
“The Bill tries to make levying bodies subject to the same referenda controls already in place for major preceptors and billing authorities. However, we are concerned that the mechanism chosen will confuse local accountability. The entire burden of any referendum is actually placed upon major preceptors and billing authorities despite the fact that they have no ability either to directly influence the amount of individual levies or require a body to reduce its levy as a result of a referendum.
“We are also concerned that the proposed requirement to factor in 2013-14 Council Tax increases into the referenda criteria for 2014-15 introduces an element of retrospection, potentially penalising authorities for decisions taken well before this Bill was published."
Contact: Matthew Patterson
CIPFA Press Office
t 020 7543 5600
Notes to editors
CIPFA, the Chartered Institute of Public Finance and Accountancy, is the professional body for people in public finance. Our 14,000 members work throughout the public services, in national audit agencies, in major accountancy firms, and in other bodies where public money needs to be effectively and efficiently managed. As the world’s only professional accountancy body to specialise in public services, CIPFA’s portfolio of qualifications are the foundation for a career in public finance. They include the benchmark professional qualification for public sector accountants as well as a postgraduate diploma for people already working in leadership positions. They are taught by our in-house CIPFA Education and Training Centre as well as other places of learning around the world. We also champion high performance in public services, translating our experience and insight into clear advice and practical services. They include information and guidance, courses and conferences, property and asset management solutions, consultancy and interim people for a range of public sector clients. Globally, CIPFA shows the way in public finance by standing up for sound public financial management and good governance. We work with donors, partner governments, accountancy bodies and the public sector around the world to advance public finance and support better public services.