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Select Committee · Housing, Communities and Local Government Committee

Financial Reporting and Audit in Local Authorities

Status: Closed Opened: 3 Mar 2023 Closed: 18 Mar 2024 15 recommendations 16 conclusions 1 report

This inquiry will examine a range of issues relating to the purpose, understanding and impact of financial reporting and audit in local authorities. It will scrutinise the role of audit in local accountability and democracy and the extent to which accounts provide a clear picture of the financial sustainability and resilience of a local authority.

Clear

Reports

1 report
Title HC No. Published Items Response
First Report - Financial Reporting and Audit in Local Autho… HC 59 24 Nov 2023 31 Responded

Recommendations & Conclusions

2 items
24 Recommendation First Report - Financial Reporting and … Accepted

The Department should coordinate with the Chartered Institute of Public Finance and Accountancy and the...

The Department should coordinate with the Chartered Institute of Public Finance and Accountancy and the CIPFA/LASAAC Local Authority Code Board to ensure that the Accounting Code does not interpret existing legislation as placing requirements on local authority accounts disclosures that are neither mandated nor intended by the existing legislation. Read more

Government response AI summary
The government agrees on the importance of the Accounting Code aligning with legislation and will work with CIPFA to review legislative disclosure requirements and their necessity. Any changes will be implemented through CIPFA LASAAC's annual review process.
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Ministry of Housing, Communities and Local Government
30 Recommendation First Report - Financial Reporting and … Accepted

Assess potential benefits of decoupling value for money from financial audit work

The Department should work with the organisation that prepares the Audit Code (currently the National Audit Office, eventually the system leader) to assess the potential benefits (for example, to timescales and resourcing) of decoupling value for money work from financial audit work, and report the findings of the assessment to … Read more

Government response AI summary
The government agrees with the recommendation, committing to consult on decoupling value for money work from financial audit work, continue collaboration with the NAO and FRC, and report the assessment findings to the Committee before the end of this Parliament.
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Ministry of Housing, Communities and Local Government

Oral evidence sessions

4 sessions
Date Witnesses
17 Jul 2023 Lee Rowley · Department for Levelling Up, Housing and Communities, Siobhan Jones · Department for Levelling Up, Housing and Communities View ↗
26 Jun 2023 Alison Scott · Three Rivers District Council, Councillor Abi Brown · Local Government Association, Councillor Richard Wenham · Central Bedfordshire Council, Councillor Tudor Evans · Plymouth City Council, Gerald Almeroth · Westminster City Council, Michael Hudson · Cambridgeshire County Council View ↗
5 Jun 2023 Conrad Hall · Newham Council, Gareth Davies · National Audit Office, Iain Wright · ICAEW, Lynn Pamment · Financial Reporting Advisory Board, Mike Newbury · National Audit Office, Rob Whiteman · CIPFA View ↗
15 May 2023 Dr Henry Midgley · Durham University, Ed Hammond · Centre for Governance and Scrutiny, Neil Harris · Financial Reporting Council, Professor David Heald · University of Glasgow, Sarah Rapson · Financial Reporting Council, Sir Tony Redmond · Chartered Institute of Public Finance and Accountancy (CIPFA) View ↗

Who gave evidence

20 witnesses
WitnessOrganisationSessions
Alison Scott · Shared Director of Finance (Section 151 Officer) Three Rivers District Council 1
Conrad Hall · Corporate Director of Resources Newham Council 1
Councillor Abi Brown · Chair of Improvement and Innovation Board Local Government Association 1
Councillor Richard Wenham · Councillor Central Bedfordshire Council 1
Councillor Tudor Evans · Leader of the Council Plymouth City Council 1
Dr Henry Midgley · Assistant Professor in Accounting Durham University 1
Ed Hammond · Deputy Chief Executive Centre for Governance and Scrutiny 1
Gareth Davies · Comptroller and Auditor General National Audit Office 1
Gerald Almeroth · Executive Director Finance & Resources (Section 1… Westminster City Council 1
Iain Wright · Managing Director for Reputation and Influence ICAEW 1
Lee Rowley · Minister for Housing, Planning and Building Safety Department for Levelling Up, Housing and Communities 1
Lynn Pamment · Chair Financial Reporting Advisory Board 1
Michael Hudson · Executive Director Finance & Resources (Section 1… Cambridgeshire County Council 1
Mike Newbury · Director, Code of Audit Practice National Audit Office 1
Neil Harris · Director of Local Audit Financial Reporting Council 1
Professor David Heald · Emeritus Professor University of Glasgow 1
Rob Whiteman · Chief Executive CIPFA 1
Sarah Rapson · Deputy CEO, Executive Director of Supervision, an… Financial Reporting Council 1
Siobhan Jones · Director of Local Government and Communities Department for Levelling Up, Housing and Communities 1
Sir Tony Redmond Chartered Institute of Public Finance and Accountancy (CIPFA) 1

Correspondence

5 letters
DateDirectionTitle
23 Apr 2024 To cttee Letter from the Minister for Local Government to the Chair dated 17 April 2024 …
17 Jan 2024 To cttee Letter from Minister for Local Government to Chair relating to the financial re…
5 Dec 2023 To cttee Letter from the Chair to the Local Government Association dated 27 November 202…
18 Jul 2023 To cttee Letter from the Parliamentary Under Secretary of State for Local Government and…
25 Apr 2023 To cttee Letter from the Mayor of Croydon to the Chair dated 30 March 2023 concerning ac…