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Heseltine defends Audit Commission

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The Conservative grandee who championed the establishment of the Audit Commission in the eighties has railed against his party’s decision to abolish the watchdog.

Lord Heseltine told a committee of MPs last week that the commission had played an “essential” role by driving up best practice in local government and saving millions of taxpayers’ pounds.

“The work the Audit Commission did in value for money created massive economies by turning a spotlight on what you could do if you elevated standards to the best which others could achieve,” he told the draft local audit bill ad-hoc committee, which is scrutinising the government’s decision to axe the commission.

“Comparative statistics on value for money are absolutely essential. [But] if you want to make a comparison of authority by authority you have got to prescribe the information you want to collect and that has to be done centrally.

“You have got to have a system that systemises the process of comparing value for money.”

The commission is due to be wound up in Spring 2015. Its value for money for role is being taken on by the National Audit Office, albeit on a much smaller scale. The commission’s audit practice, which previously carried out the majority of audits for public bodies, closed this month.

Lord Heseltine admitted to the committee that the commission may have outgrown its original role but indicated that it could still have been saved.

“The question should be: what did it outgrow? Did it serve a purpose? And, should we ungrow it if it didn’t service a purpose?”

He rejected suggestions that the LGA was better placed to police value for money in the sector, arguing instead for a central government agency to be given the role.

‘LGA is a body representative of local government,” Lord Heseltine told the committe. “I think you need a body representative of the taxpayer and that is the government because that is where the money comes from.”

A central body was needed to enforce efficiency because of the lack of market pressures on local government, he added.

“If it is public sector money you need value for money because there is no equivalent in the public sector of the market place.”

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