"The Commission welcomes this consultation process, and the opportunity it has given people, public service providers, and Parliament to consider the issues. We have worked closely with DCLG on the new framework - but although there is much on which we do agree, inevitably we don’t agree on everything.
"We take a different view on two fundamental principles underpinning these proposals - allowing local bodies to appoint their own auditors, and replacing a single regulator with several regulatory functions spread across various bodies. This is based on the Companies Act model of regulation - which we think is an inappropriate model for regulating taxpayers' money.
"Given that independent appointment has been such a fundamental principle of audit arrangements across the public sector in the UK, it is surprising that the consultation paper does not make the case for allowing local public bodies to appoint their own auditors.
"Instead, it simply asserts that this is an expression of the principle of localism and decentralisation. In our view, this assertion is not well founded. Independent appointment is one of the main safeguards of auditors' independence. It should not be set aside lightly."