Local Government Minister Grant Shapps has announced proposals for the new arrangements for local public audit that will replace the Audit Commission's inspection regime. Under the new framework local public bodies will be able to appoint their own independent auditors from an open and competitive market.

The Government’s Response to the Consultation on the Future of Local Audit sets out further details about the new framework. Key elements include:

• A consistent regulatory regime for audit, covering the private sector and the local public bodies;
• A duty on local public bodies to appoint an auditor from the register of local public auditors, on the advice of an Independent Auditor Appointment Panel;
• Requirement to publish details of the auditor appointment on the local public bodies’ website within 28 days of making the appointment, together with the Independent Audit Appointment Panel’s advice;
• A procurement competition will be required for audit services at least every five years;
• Appointment of an auditor will be required by 31 December in the year preceding the financial year to be audited, and notification to the Secretary of State if not done;
• Proposed new arrangements might need to be different for some local public bodies such as Police and Crime Commissioners and Passenger Transport Executives.

The Government intends to bring forward legislation to formally close the Audit Commission and introduce the new framework as soon as Parliamentary time allows. A draft Bill is to be published in the Spring.

While the new arrangements are being finalised, the Audit Commission is outsourcing its audit work, which means all audits will be done by private firms from 2012-13, with regulation and guidance being overseen by the Audit Commission until the new regime is in place. 

For more information please visit www.communities.gov.uk/publications/localgovernment/localauditgovresponse