Audit Commission closure 'may be delayed'

Eric Pickles has suggested the Audit Commission is not defending taxpayers' interests well enough

The Audit Commission is still likely to be open in 2014 despite ministers promising to scrap it by the end of 2012, an internal memo has suggested.

The independent spending watchdog, that employs around 2,000 staff, has been accused of having "lost its way" by the Communities Secretary Eric Pickles.

Announcing its closure last August, he said the move would save £50m a year.

But a memo to the quango's staff, leaked to the BBC, said the earliest it would close is the end of 2013.

"We are now working to a longer timetable," the quango's chief executive Eugene Sullivan wrote in the memo. "We think the earliest the commission will be abolished is December 2013 and possibly not until the end of 2014."

'Business as usual'

The BBC understands that this timetable may even slip further, and as a consequence, the Audit Commission is having to run things as normal.

The organisation currently checks up on the spending and accounts of local authorities in England and groups like NHS Trusts.

In his memo, Mr Sullivan adds: "It is clear that we cannot run the commission as if it were going to close by December 2012. The Audit Commission Management Team has therefore decided that we should turn more to a 'business as usual' rather than a 'close-down' model."

The government had planned to introduce draft laws at the end of last year to prepare for the private sector taking over the Audit Commission.

But the memo also reveals that work commissioned by Mr Pickles to look at the future of the organisation will not be ready until May, despite a government promise to legislate on the issue at the "earliest possible opportunity".

A spokesman for the watchdog said: "The timetable for the Audit Commission's abolition and the introduction of a new audit regime for local public bodies rests with ministers and Parliament".

But he said it was understood the time taken to pass legislation and put in place a replacement framework for council auditing meant the authority was likely to "keep some powers until at least December 2013".

However, sources have suggested that the time frame is more likely to be December 2014 and that the date for the eventual closure of the organisation could slip even further.

Uncertainty for staff

A government source attacked the spending watchdog for making a "desperate move to keep themselves going for longer" and questioned the motives of its senior management - insisting that the plans to close it were "still on track".

But Audit Commission Chairman Michael O'Higgins said they were working to ensure a "transition to a new audit regime that is fit for purpose is completed in the shortest timescale possible.

"We have no desire to continue going, following our abolition announcement, any longer than is necessary."

Shadow local government secretary Caroline Flint said Mr Pickles needed to "get his act together".

She said: "As a result of the shabby way Eric Pickles announced the abolition of the Audit Commission by press release, he has created yet another shambles.

"The current situation is the worst of all worlds. Staff at the Audit Commission don't know whether or not they're still in a job, the savings we were promised won't materialise for at least another four years, and the public still don't know how they will get the information to hold their local council to account."

The government is expected to publish a consultation on the future of the Audit Commission by the middle of next month.

The Audit Commission's chairman said last year the body had "more than fulfilled" the objectives set for it since it was established in 1983.

But Mr Pickles has argued it is not championing taxpayers' interests effectively enough and had become a "creature of the Whitehall state".