Let me quote people who perhaps know a little more about these things than me. The draft Local Audit Bill ad hoc committee looked at the matter in detail. It
“heard conflicting evidence about whether and how much public money is likely to be saved by implementing this legislation.”
I have struggled to find anyone who thinks that the proposal is a good idea.
The Audit Commission said:
“Under a free market model, the current benefits of pooling auditors’ costs will be lost and councils in remote geographical locations”—
many of the locations represented by Government Members—
“will have to meet the economic cost of the audit. In some cases this may be significantly higher than historical fee levels.”
The Local Government Information Unit said:
“If the market concentrates further, or even stands still, this will eventually lead to higher, not lower, fees.”
The Select Committee on Communities and Local Government has pointed out that the Government’s proposals for local government
“contrast with the situation in central government, where the NAO is reducing the percentage of work that it contracts out to private firms”.
I do not understand why that double standard is being applied by the Government when it comes to local government. Cynics might say that the Government are creating yet another money-making cartel. We know that the Conservative party has form in using taxpayers’ money to enrich vested interests in the private sector. We need look no further than the privatisation of the utilities, with millions of consumers being ripped off on a quarterly basis by the big six utility companies. We could also look at railways privatisation, which has seen the railway companies fleecing the travelling public, or the deregulation of the private rented sector, where we have seen a massive hike in rents. As a consequence, the housing benefit bill has gone through the roof—some £10 billion a year is going into private landlords’ pockets. This is yet another example of the Conservative party flagrantly using taxpayers’ money to enrich vested interests in the private sector. It is a shameful abuse.
The Communities and Local Government Committee hit the nail on the head:
“Unless the Government can crack the problem of the very limited competition in the audit market in the UK, it will be open to the accusation that the abolition of the Audit Commission is not a measure to save public money but merely a mechanism to transfer public money into private hands.”
I could not put it better myself. Clearly, that is an endorsement of my suspicion about the Government’s real motive for introducing the Bill.