Response to the Department of Communities and Local Government’s announcement about the Audit Commission’s work

 Eugene Sullivan, Audit Commission Chief Executive, said: ‘As Grant Shapps said, we have been working closely with the Department on options to externalise the work of the in-house audit practice. We have agreed to the Permanent Secretary’s request to start preparatory work for the potential outsourcing with effect from 2012/13 audits.

 We have been asked to design a procurement process that allows a range of firms to bid, including the possibility of an in-house bid, which could form the basis of a new and distinctive provider in the market, possibly a mutual.’

Copies of DCLGs news release and the letter it has sent to council chief executives are now available on the Department’s website.

‘Improving value for money in adult social care’ – new briefing out on 2 June 2011

Are councils changing their approach to providing adult social care to make services more efficient? Demographic change and financial pressures have combined to create tough times for adult social care. Not only is the population ageing, but the pressure on services from people with learning disabilities is increasing as those people live longer.

Journalists can get more information about the briefing from Louise Neilan (0844 798 2128) in the Commission’s media team. Otherwise the report and supporting news release will be available on http://www.audit-commission.gov.uk/ on Thursday 2 June 2011.

This briefing is the first in a series from the Audit Commission, looking at value for money in social care.

Driven to disrepair? New report on road maintenance out on 26 May.

England’s 236,000 miles of local roads – used by 30 million drivers every day – are under attack from increasing traffic, severe winters, higher repair costs, and dwindling highways funding. 

The challenges faced by the country’s 152 council highways authorities are the subject of a new Audit Commission report ‘Going the Distance: Achieving better value for money in road maintenance’, which is published on Thursday 26 May 2011.

Journalists can get more information from Mark Nicholson (0844 798 2128) in the Commission’s media team. Otherwise the report and supporting news release will be available on www.audit-commission.gov.uk on Thursday 26 May 2011.

Statement – Audit Commission use of Government Procurement Cards

Following stories in today’s media about the use of GPC cards, the Commission has issued the following statement.

A spokesman said: ‘In common with many public bodies the Audit Commission uses Government Procurement Cards (GPC) for low value transactions or where a purchase order is impractical. Procurement cards are recognised as the most cost-effective way of dealing with such transactions and often result in lower prices.

 Between April 2008 and March 2010 we processed 8,818 transactions at an average cost of £125. All purchases were for legitimate business purposes. Payments made by these procurement cards are routinely checked to ensure the cards are being used correctly.’

FTI to look at Commission’s in-house practice

The Department for Communities and Local Government (DCLG) has issued a press release announcing the appointment of FTI as the financial consultants to give it advice on the best approach to externalising the Commission’s in-house audit practice and its valuation under different options.

More details on DCLG’s website.

Services for Young People resource pack – available from 19 April

A free resource pack launched on 19 April will help make sure money spent on services for young people is well-used and has the right impact.

‘Services for Young People: Value for Money Self-Assessment Pack’, is a collaboration between the Audit Commission and the Confederation of Heads of Young People’s Services (CHYPS).

Journalists can get more information from Callum Collins (0844 798 8844) in the Commission’s communication team. Otherwise the resource pack will be available on www.audit-commission.gov.uk on Tuesday 19 April.

NHS spending on low clinical value treatments – new briefing published on 14 April

Our new briefing, published on Thursday 14 April, looks at primary care trusts’ (PCTs) spending on low clinical value treatments and how some PCTs have successfully reduced their spending in this area. By low clinical value treatments we mean those treatments that are either clinically ineffective or not cost-effective.

The aim is to free up money spent on low clinical value treatments and use it either to deliver a PCT savings plan or to invest in services with better clinical outcomes. Deciding where to spend money and the clinical effectiveness of services commissioned will be just as relevant for GP consortia as they take control of the NHS budget.

Journalists can get more information from Louise Neilan (0844 798 2128) in the Commission’s media team. Otherwise the briefing will be available on www.audit-commission.gov.uk on Thursday 14 April.

Checking the scale of fraud and corruption nationwide

Over 450 public bodies – including councils, police authorities and probation boards – have been asked to take part in the latest Audit Commission national fraud and corruption survey.

The survey is the only one of its kind in the public sector. Last year over 94 per cent of organisations responded to the 2009/10 survey. The last survey showed that local government have been successful in detecting over 119,000 cases of fraud and corruption committed against it, the majority relating to housing and council tax benefit fraud, equating to more than £135 million lost to public services.

Covering the 2010/11 financial year, the annual survey issued on 8 April 2011 will collect important information about a wide range of fraud and corruption issues, including housing tenancy and procurement fraud.

The survey can be used to inform the national debate, and develop national and local strategies, on combating fraud and corruption. The results will be published in our national report ‘Protecting the Public Purse 2011’ towards the end of this year.

Audit Commission passes more cost savings on to public bodies in lower fees

The Audit Commission has completed a consultation on its proposed audit fees for health, local government and community safety organisations for 2011/12. Scale audit fees for these bodies will be between 5 and 20 per cent lower in 2011/12 than in 2010/11. You can get more details of the fees on our website. 

And the Commission has agreed, subject to affordability, to give additional rebates in 2011/12. This means that public bodies audited by the Commission will see a significant net reduction in fees compared to 2010/11. They will be notified of the amount due to them in the summer.

Subject to the timetable for the Commission’s abolition, it is also committed to delivering further significant fee reductions of up to 15 per cent in 2012/13.

Chairman of the Audit Commission, Michael O’Higgins said: ‘We have listened to what respondents to our consultation have said and want to do more to help the bodies we audit. The Commission is continuing to drive down its costs and become more efficient. So it has been able to achieve almost £40 million in savings over three years, which are being passed straight back to health, local government and community safety organisations to help them with their own budgeting.’

Fees are the principal way the Audit Commission finances its activities, and it has a statutory duty to cover its costs, taking one year with another. During the consultation many respondents recognised that the Commission faces a difficult period leading up to its abolition. The proposals to give a rebate on 2010/11 fees, and reduce fees in 2011/12 were welcomed.

However, most local government respondents expressed the view that the previously proposed rebates and reductions were too small given the financial pressures councils will face next year. That is why the Commission has decided to increase the cost savings to audited bodies.

Others suggested that central government should pick up the costs arising from the ending of Comprehensive Area Assessment (CAA) and the abolition of the Commission, rather than public bodies.

Michael O’Higgins adds: ‘The costs of ending CAA, and of the Commission’s own abolition, must come from the public purse. Some will be met from reserves, and any balance will be funded by the Department for Communities and Local Government.

Because of the savings plans we already had in place and the timely and effective action we have taken to control our costs, we have been able to make rebates of £9 million to audited bodies in 2010/11, even after meeting the costs of ending CAA, including the cost of making several hundred staff redundant. We are committed to giving additional rebates in 2011/12 and further fee reductions in 2012/13.’

Eight councils fail to publish an annual return for the last three years

The new report ‘Auditing the Accounts 2009/10: Parish Councils’ summarises the results of auditors’ work on the annual return. Overall, the report found that parish councils’ financial reporting is improving. Auditors issued the opinion on the 2009/10 annual return by 30 September at 8,768 parish councils (93 per cent). However, it names eight parish councils that failed to publish an annual return for the last three years or more.