Select committee: Housing, Communities and Local Government Committee
Recommendation 18
Second Report - Local authority financial sustainability and the section 114 regime
Published 19 Jul 2021
Paragraph 81
Addressed to Ministry of Housing, Communities and Local Government
Housing, Communities and Local Government Committee Local Authority Financial Sustainability and the Section 114 Regime All items in this report Report on parliament.uk ↗ Inquiry on parliament.uk ↗
Recommendation (the committee's words)
We recommend the Government remove the ability of local authorities to choose their own auditors. The risk is that auditors will be reluctant to flag up potential problems for fear of losing their contract. The Government should consider who will be best placed to appoint local authority auditors, given that it should not be local authorities themselves, and ARGA doing so could lead to a conflict of interest. We also ask the Government to confirm that the new system leader will be able to join up individual auditor findings with a view to identifying systemic issues across local government. Without a central body responsible for oversight of the sector, we see no way of ensuring a robust and transparent regime of local audit.
From: Housing, Communities and Local Government Committee, Second Report - Local authority financial sustainability and the section 114 regime (HC 33), paragraph 81, 19 July 2021
Government response
The government responded to the whole report on 21 October 2021 (deadline 19 September 2021).
Summary written by Accountability Index from the government's response. It is not the government's own words.The government welcomes the Committee's report and responds recommendation by recommendation, agreeing on some audit and funding-stability points while setting out its existing approach on council tax, business rates and the section 114 regime.
- On social care, it points to its 7 September 2021 announcement of an additional £5.4 billion over 3 years and says it will publish further detail in a White Paper "later this year".
- On council tax, it states it "has no plans to replace or fundamentally reform council tax", saying a revaluation "would be expensive to undertake" and could raise bills for many households.
- On multi-year settlements, it "agrees that a stable funding environment ensures local authorities can plan effectively"; the approach to the next settlement "will be informed by the ongoing Spending Review".
- On local audit, it considers PSAA "best placed" as appointing body and will keep arrangements "under review". It agrees the new system leader should be able to join up auditor findings.