The Audit Commission, which employs 2,000 people, is to be scrapped, the BBC has learned. England's public spending watchdog audits £200bn spent by 11,000 bodies in local government and has offices across the country. A source told the BBC that the announcement, planned for Saturday, was "completely out of the blue".
In May, Communities Secretary Eric Pickles vetoed the £240,000 salary for the new head of the Audit Commission. "Spiralling" pay levels had to stop, Mr Pickles said. Commission staff received an email from management on Friday. BBC News Channel chief political correspondent Laura Kuenssberg said that, despite the controversy over salaries, the move would come as a surprise.
In a prepared press statement which was leaked to the BBC, Mr Pickles said the commission's responsibilities for overseeing and delivering local audits would stop, as would its research functions. Instead private companies will be asked to carry out audits - with councils able to appoint their own auditors "from a more competitive and open market" and a "new audit framework" for local health services.
Michael O'Higgins, the chairman of the Audit Commission, said he "regretted" the decision and listed the "significant successes" the commission has had. "The Audit Commission was set up by a Conservative secretary of state in 1983, and I believe we have more than fulfilled Michael Heseltine's ambitions when he set it up. In 1985-86 the commission led the investigation of the rate-capping rebellion which resulted in 32 Lambeth councillors and 47 Liverpool councillors being surcharged and banned from office.
Michael O'Higgins, the chairman of the Audit Commission, said he "regretted" the decision and listed the "significant successes" the commission has had. "The Audit Commission was set up by a Conservative secretary of state in 1983, and I believe we have more than fulfilled Michael Heseltine's ambitions when he set it up. In 1985-86 the commission led the investigation of the rate-capping rebellion which resulted in 32 Lambeth councillors and 47 Liverpool councillors being surcharged and banned from office.
"The gerrymandering 'homes for votes' scandal at Westminster Council was uncovered by the Audit Commission. In 2010 the commission carried out a corporate governance inspection of Doncaster Council in the light of 'serious concerns about the council's performance and the threat to public confidence caused by recent events', being the brutal attack on two boys by two brothers in Edlington. Recently over £200m of fraud has been detected through the National Fraud Initiative."
However Mr O'Higgins acknowledged "it is of course the absolute right of the secretary of state and Parliament to change the arrangements around the architecture of government, including abolishing the commission."
Updated 05:57 Saturday 14th August 2010
