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Audit Commission calls for rethink on parish council audit

Proposed changes to audit regulations for England’s 10,000 parish councils are ‘overly complex’, the Audit Commission has warned.

Responding to the DCLG’s consultation on local audit regulations, the Commission suggests that the proposals will place a ‘much greater’ burden on parish councils and their clerks than the government intends.

Currently all local authorities have their financial documents subjected to review by an external auditor, appointed by the Audit Commission. This is at no cost for most councils spending less than £25,000 a year and has a maximum cost to them of £100 a year.

But following the commission’s abolition next year, parishes would have to appoint their own auditors, with fees set by the market. However the auditors at parishes below a certain size will not carry out any work unless members of the public ask questions or make objections. “This will inevitably cost them more than the current arrangements,” argues the Commission.

Jeremy Newman, the Audit Commission’s chairman, said: “We need to find a way to overcome some fundamental practical problems about how smaller local authorities, such as parish councils, should be held to account. The Audit Commission is not challenging the government’s policy intentions; however we believe it is time for the government to rethink how its goals can be achieved.

“The government needs to either keep the current assurance arrangements in place, or accept that the small spending levels of these bodies, coupled with their closeness to their communities, means that external audit is disproportionate.”

But a DCLG spokesman said: “The government’s reforms give councils more freedom, improve transparency and accountability to local residents and will save taxpayers £1.2bn over ten years.

“We will respond to the consultation in due course as we continue to drive forward these important changes to ensure local appointment of auditors in 2017.”

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