The decision to abolish the Audit Commission has resulted in higher costs and a chaotic audit system for councils in England. Promised savings of £100 million annually from the reform have proven elusive. After the abolition, private-sector auditors raised costs sharply, with audits now costing over £50,000 more than before. Only 1% of audits were completed on time in 2022-23, reflecting significant delays. The average audit costs have seen a 238% increase since the reform, contrasting sharply with more stable costs in Scotland and Wales.
The average cost of external auditors checking a local authority's finances was now at least 50,000 higher in cash terms than when the Audit Commission was disbanded in 2015.
Ten years on, however, it now seems clear that these reform ambitions have failed, the authors of the report wrote. Only 1% of audits were delivered on time in 2022-23.
The report found that average audit costs in England had more than tripled - an average increase of 238% in the year to 2023-24. It blamed most of this increase on private-sector auditors hiking their rates.
Private-sector accountancy firms took over the job of auditing local government accounts in England after the agency was abolished, in an austerity-driven push by Tory and Lib Dem ministers to find savings and efficiencies.
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