A decade after England abolished its council spending watchdog, failed audit reforms have led to soaring costs and delays. A damning report reveals that instead of saving £100m yearly, taxpayers now face higher fees and financial chaos. In 2015, the Conservative-Liberal Democrat coalition scrapped the Audit Commission, promising £100m in annual savings. However, a University of Sheffield study found the opposite. Private-sector auditors now charge at least £50,000 more per council than before.
Therefore, the report highlights failed audit reforms as a key issue. Audit delays and rising fees have left local authorities struggling. Only 1% of audits were completed on time in 2022-23, with some delayed for years. Many councils, including Birmingham and Woking, have declared bankruptcy after years of austerity. Audit fees skyrocketed, with Woking seeing a 620% increase. Runnymede and Spelthorne faced hikes of 470% and 450%, respectively.
Moreover, private firms dominate the market, but profit margins remain slim. Deloitte and BDO have exited, leaving EY, Grant Thornton, and Forvis Mazars as major players. A Forvis Mazars spokesperson said they remain committed to improving audit quality. England’s failed audit reforms contrast sharply with Scotland and Wales. Both nations kept stronger oversight, resulting in smaller fee increases. Experts argue England’s decentralized system caused inefficiency and higher costs.
Furthermore, Ministers allowed delayed audits to proceed with qualifications to clear backlogs. A new Local Audit Office will centralize oversight. The Ministry of Housing, Communities, and Local Government (MHCLG) pledged £49m to help councils catch up. An MHCLG spokesperson said reforms aim to restore accountability. However, critics demand faster action to fix the failed audit reforms and prevent further financial strain.
The abolition of the Audit Commission has backfired, leaving councils paying more for slower audits. With rising financial pressures, England must address its failed audit reforms to protect taxpayers and local services.
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