The Audit Commission has been dealt a double blow after its flagship inspection regime was ended and ministers ruled out paying its new chief executive £240,000.
The watchdog told council chiefs to stop work on the comprehensive area assessment (CAA) organisational and area components and said it was in talks with the Local Government Association and ministers about a new arrangement.
A letter to councils said: “Work on updating the area assessment and organisational assessment will not be updated. We will not be reporting new red or green flags in the area assessment nor updating the text around existing flags.”
Appointed auditors will continue to assess value for money and a limited programme of risk-based inspections will remain.
A version of the letter sent to unitary and top-tier council chiefs added that the Care Quality Commission and Department of Health would discuss the implications with adult services directors but stressed that the children’s services assessment for 2010 would go ahead as planned.
The LGA said it was discussing with the commission what role the inspectorates could play in its proposals for a CAA replacement.
The LGA’s model would place a far greater emphasis on self-regulation while maintaining a robust regime for high risk areas such as children’s services.
LGA Liberal Democrat group leader, Richard Kemp, suggested the commission’s army of field workers could “develop an early warning system that would allow self-regulation, peer review and peer support to work”.
If peer support failed to achieve improvements, the inspectorates or central government would need to be drafted in.
Dennis Skinner, the Improvement & Development Agency lead on inspection, said: “We would like the sector to be given the first chance to address problems.”
He added that Ofsted’s annual performance assessment should also be scrapped.
Meanwhile, communities secretary Eric Pickles said he had “vetoed” a £239,800 salary and pension package for the commission’s new chief. However, a commission spokesman told LGC that “nobody has or will be offered £240,000” to take the job.
Commission chairman Michael O’Higgins added: “The board will consider these issues further at its next meeting on Thursday 10 June, and will make a statement following that meeting.”
The Audit Commission declined to comment on a replacement for the CAA.