Select committee: Housing, Communities and Local Government Committee
Recommendation 19
First Report - Financial Reporting and Audit in Local Authorities
Published 24 Nov 2023
Paragraph 91
Addressed to Ministry of Housing, Communities and Local Government
Housing, Communities and Local Government Committee Financial Reporting and Audit in Local Authorities All items in this report Report on parliament.uk ↗ Inquiry on parliament.uk ↗
Recommendation (the committee's words)
The establishment of the local audit system leader will require primary legislation. The legislation required to establish ARGA has been significantly delayed and there appears to be little or no forward momentum or urgency in the Government to introduce it. Moreover, the Department for Levelling Up, Housing and Communities, which will be responsible for the local audit system leader, informed us that only the Department for Business and Trade, as ARGA’s sponsor department, can move forward with this legislation. It is fundamentally unclear how the Government’s Financial Reporting and Audit in Local Authorities 37 departments are being coordinated to establish ARGA in a timely fashion. The Government must make it a priority to establish the local audit system leader, in a different form if necessary.
From: Housing, Communities and Local Government Committee, First Report - Financial Reporting and Audit in Local Authorities (HC 59), paragraph 91, 24 November 2023
Government response
The government responded to the whole report on 5 February 2024 (deadline 24 January 2024).
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 gives a differentiated response across its 14 recommendations, agreeing with or committing to consider several while stating that clearing the audit backlog is its immediate priority and that it does not support one.
- On backlog, the government says its proposals include an initial backstop date of 30 September 2024 for all outstanding local audits up to and including 2022-23, "subject to consultation in early February".
- On a new local audit body (Recommendation 6), the government's view is that "a new arm’s length body is not necessary" and a system leader should instead be appointed from within the current system.
- On value for money (Recommendation 12), the government states "We do not support this recommendation", saying auditors are "not currently equipped" to comment on specific services, projects or programmes.
- On a standardised statement of service information and costs (Recommendation 10), it remains "committed to the prospect" but says introducing it now would add a requirement while clearing the backlog is the priority.