In a report on the Audit Commission, the environment, transport and regional affairs committee warns of a 'developing culture of over-inspection in the public sector'.
The report concludes that the commission is well run, responsive and relatively open.
But environment sub-committee chairman Andrew Bennett said: 'The government must recognise the potentially dire consequences of failing to minimise and co-ordinate inspections and make every effort to do so.'
Those costs are an estimated£42.8m for councils in the current financial year, but the commission has emphasised the majority of this expenditure would be met by the government.
The committee recommends the commission should subject only high-risk councils and a sample of other best value reviews to full inspections. It calls on the Local Government Association and the Improvement and Development Agency to initiate more peer reviews to reduce the need for best value inspection.
But the report does not call for major changes to public audit charges, recommending instead the commission allow smaller councils to pay lower fees. It says the commission should not be allowed to evade outsourcing best value inspection, warning it may not relinquish its role once it has a trained body of inspectors.
The commission said it was already reviewing the experience of the best value performance plan process. A spokesman said: 'We're looking at ways to ensure everything we're doing is responsive to the reactions we're getting from councils . . . If inspection becomes a burden we need to look at ways we can lessen that burden.'
He said the commission would respond fully to the report in the next three months.
Danger of audit 'politicisation'.
Sub-committee chairman Andrew Bennett issued a warning about the role of auditors in central government intervention: 'We also had serious concerns about the involvement of auditors in triggering central government intervention in local services. We do not want to see the gradual politicisation of the audit process.
'The government needs to make it clear that the role of auditors and inspectors is only to highlight problems and the decision to intervene will be made by ministers.'
The committee also urged the government to introduce a statutory duty on councils to 'place their full and unabridged annual audit letter in the public domain within 24 hours of receiving it'.
Mr Bennett said the committee had concerns about the availability of audit information.