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Audit Commission to close, years after original announcement

The Local Audit and Accountability Acthas received Royal Assent, which will bring about the closure of the Audit Commission and create a new framework for local audit.

The closure was first announced in August 2010, but the Commission will not disappear until March 2015.

It aims to offer more responsibility and choice for local authorities. The NAO will set the standards for public audit and the Financial Reporting Council will oversee quality.

The act will also strengthen the legal status of the publicity code for local authorities, add new transparency measures and allow citizens and press the right to film and tweet from any local government body meeting.

The council tax referendum provisions introduced in the Localism Act, allowing residents to veto ‘excessive’ increases.

Local government secretary Eric Pickles said: “This important new law will pass power down to people and replace old fashioned bureaucracy with local choice and transparency. The £1.2bn of savings we will be making will help reduce the inherited national deficit for the benefit of hard working taxpayers.”

The NAO cautioned: “Some challenges remain for the government, particularly that of making arrangements for the oversight of the Audit Commission’s contracts, which run at least two years beyond March 2015, when the Commission is scheduled to be abolished.”

But Sue Higgins, NAO’s executive leader for local government, said: “The National Audit Office welcomes the passage of the Local Audit and Accountability Act. The challenge now for all those with a role to play in the new local audit framework is to manage the transition to the new arrangements, and government will need to ensure they work in practice.

“We are committed to building upon the strong foundation provided by the Audit Commission in taking on our new responsibilities. We are already experienced in testing value for money across the whole of the public sector, national and local. We will continue to develop that programme as we take on our new local audit role.”

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