Recommendation 18

We observed that the Department appeared to be “slightly skating over the problem” in saying that it did not have the levers needed to address the local audit issues affecting its accounts. Whilst we accepted that the Department did not have responsibility for issues with the audit of local government, we note that it is responsible for the audits of a significant number of local bodies across NHS providers and ICBs.28 We therefore asked what it was doing to ensure that there were sufficient auditors to undertake the work needed. The Department explained that although it could incentivise firms to enter the market, it could not make them, and that the barriers to entry included audit complexity and regulatory risk. NHS England confirmed that going into the 2023–24 year end, every NHS provider and NHS commissioner had an auditor appointed. NHS England advised that this put it in a better position than in 2022–23. In addition, it explained that fewer audits were being undertaken by one particular audit firm which had significant difficulties in delivering timely audits in 2022–23. For 2023–24 there are only 42 NHS commissioners to audit, given Clinical Commissioning Groups were all closed down during 2022–23.29