'The Audit Commission was set up by a Conservative Secretary of State in 1983, and I believe we have more than fulfilled Michael Heseltine's ambitions when he set it up.
It is of course the absolute right of the Secretary of State and Parliament to change the arrangements around the architecture of government, including abolishing the Commission.
While we obviously regret the decision, we can reflect upon the very significant successes that the Commission has had. In 1985-86 the commission led the investigation of the rate-capping rebellion which resulted in 32 Lambeth councillors and 47 Liverpool councillors being surcharged and banned from office. The gerrymandering 'homes for votes' scandal at Westminster Council was uncovered by the Audit Commission. In 2010 the commission carried out a corporate governance inspection of Doncaster Council in the light of "serious concerns about the council's performance and the threat to public confidence caused by recent events", being the brutal attack on two boys by two brothers in Edlington. Recently over £200 million of fraud has been detected through the National Fraud Initiative.
We have also had a role in assisting in the very significant impact of local authority improvement in the last decade. Ironically, it is this improved performance – as referred to by Decentralisation Minister Greg Clark, when he compared it favourably to central government’s performance – that has enabled ministers to have confidence in increasing local authority autonomy.
There are a range of options for the future of the audit practice, including sale, a management buyout, and the setting up of some sort of mutual organisation. Indeed the board of the AC mandated me last month to take soundings of potential purchasers, which has revealed significant interest in acquiring the Audit Commission’s business. I will be continuing with this process in the coming weeks, since the effective audit of local public services will need to continue, whether carried out by the Commission or by others.
It is critically important that during the coming period of uncertainty, and the transition period, that we ensure local accountability, and the accurate audit of public spending, is carried out effectively.
The Commission will continue to carry out this work effectively, and will ensure a smooth transition to the new arrangements.'