By Jo Stephenson
The Local Government Association and the Audit Commission have discussed the watchdog taking on a new role in assessing the cost pressures faced by councils.
At LGC's Lyons conference last week, Sir Michael said: 'It is impossible to say whether local government is being given enough money to do the job it is being expected to do.'
The talks between the LGA and commission follow the government's rejection of the association's calls for an independent commission, dubbed Oftax, to oversee the distribution of government funding to councils.
LGA chairman Lord Bruce-Lockhart (Con) revealed he had discussed with commission chairman Michael O'Higgins the idea it could play a part in working out the cost to local government of providing additional services.
He said: 'Phil Woolas [local government minister] has suggested the Audit Commission could report annually on areas of deregulation that the government has actioned and possibly might be able to do something on the costing of new burdens.'
He said both organisations were seeking clarification on how this would work.
Dick Sorabji, acting director of the New Local Government Network think tank, said: 'Possibly the best combination would be to get the Audit Commission to do the technical work and present it to select committees.'
The Department for Communities & Local Government said it will ask the commission to look at expanding the information on spending the public gets to boost understanding.
The commission has not discussed the idea with the government, a spokeswomen said.