In 2019‑20, 487 local bodies including local councils, local police and local fire bodies in England spent nearly £100 billion delivering local public services that residents, businesses and taxpayers rely on every day.Proper accounting with high quality audit is essential for public trust in how taxpayers’ money is spent. Each year, external auditors audit local bodies’ financial statements and provide their opinion on whether they present a true and fair view of their financial position; whether proper arrangements are in place to secure value for money; and if there are any matters to which they wish to draw attention to users of the financial statements.
Service demands on local bodies have increased considerably due to the covid-19 pandemic. Whilst this has had an impact on the audit of local bodies, the pandemic has also exacerbated long-standing problems in the audit landscape as fees have decreased, audit demands increased and the commercial attractiveness of the work for audit firms has declined.
This inquiry will examine the timeliness of auditor reporting on English local public bodies’ financial statements covering 2019-20. The NAO’s recent report, on which this inquiry is based, found that “delays in the delivery of audit opinions beyond the deadlines for publishing local authority accounts, alongside concerns about audit quality and doubts over audit firms’ willingness to continue to audit local public bodies, highlight that the situation needs urgent attention.”
The Committee will question senior officials at MHCLG. If you have evidence on the timeliness, quality or impact of local government audits in England, please submit it here by 6pm on Thursday 13 May.