Thirty-Fourth Report - Local Government Finance System: Overview and Challenges

Select Committee

Public Accounts Committee HC 646 2 February 2022

Report Status Government responded

Conclusions & Recommendations 29 items (15 recs)

Source View on Parliament website

Government Response (AI assessment · 28 of 29 classified)

Accepted 12

Acknowledged 10

Deferred 3

Not Addressed 3

Government response

Treasury minutes: Government response to the Committee of Public Accounts on the Thirty Fourth report from Session 2021-22 · published 28 Apr 2022

Read the government response ↗ Response on the tracker

Recommendations & Conclusions

3 results

3 Recommendation Deferred

The Department did not act with sufficient urgency, nor has it set out an overarching...

Recommendation

The Department did not act with sufficient urgency, nor has it set out an overarching plan and timetable, to address the severe and pressing problems with the local government audit market. Significantly delayed audits are a serious gap in local … Read more

Government Response Summary

The department will update the Committee in spring 2022, after the outcome of the consultation Local audit framework and BEIS's response on the White Paper Restoring trust in audit and corporate governance have been published and the early stages of the procurement process completed.

HM Treasury

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12 Recommendation Deferred

This Committee recently recommended the Department should set out a detailed plan and timetable for...

Recommendation

This Committee recently recommended the Department should set out a detailed plan and timetable for getting local audit timeliness back on track. We also recommended the Department explain how it intended to work with the Department for Business, Energy and … Read more This Committee recently recommended the Department should set out a detailed plan and timetable for getting local audit timeliness back on track. We also recommended the Department explain how it intended to work with the Department for Business, Energy and Industrial Strategy to set up the new system leader for local government audit, the Auditing, Reporting and Governance Authority (ARGA), and how it would address the pressing need for effective system leadership while ARGA was being established.43 The Department agreed with our recommendations, however we felt its response lacked detail on specific actions capable of addressing the urgent issues in local audit.44 In December 2021, the Department published a range of measures which aim to support improved audit timeliness and the wider audit market, though some are still being considered following a consultation in summer 2021 while others are subject to further consultation or may require legislation to be passed.45 These measures aim to provide a whole system response and include guidance and training for audit firms, additional funding to support local bodies with the cost of strengthening their financial reporting, measures to improve local authority accounts, reviewing opportunities to reduce some of the accounting and audit requirements and extending the deadline for publishing audited local authority accounts in future years. The Department committed to publishing an update on these measures as part of its response to the summer 2021 consultation.46 37 (LFS0001/ICAEW), pages 3 and 4 38 Committee of Public Accounts, Financial sustainability of local authorities, Fiftieth Report of Session 2017–19, HC 970, 4 July 2018; Committee of Public Accounts, Local government governance and accountability, Ninety- Seventh Report of Session 2017–19, HC 2077, 15 May 2019; Committee of Public Accounts, Local auditor reporting on local government in England, Eleventh Report of Session 2021–22, HC 171, 14 July 2021; Q105 39 Show less

Government Response Summary

The department will update the Committee in Spring 2022 after the outcome of the consultation and BEIS's response on the White Paper have been published and the procurement process has been completed, enabling a more detailed response on the transition to the new arrangements and proposed junctures for further updates.

HM Treasury

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13 Recommendation Deferred

In 2018, this Committee recommended the Department should review the way local authority audit committees...

Recommendation

In 2018, this Committee recommended the Department should review the way local authority audit committees operate in examining and challenging local risks to financial sustainability.47 In 2019 this Committee highlighted that 27% of external auditors did not agree that audit … Read more

Government Response Summary

The government agrees with the recommendation but defers concrete action, stating it will publish the response to its consultation on the local audit framework and update the Committee in Spring 2022 after the outcome of this consultation and a BEIS White Paper.

HM Treasury

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