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| We recommend that the Audit Commission explore ways both to ensure that no more firms withdraw from the market and to attract new entrants (paragraph 13).
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| (b) | We recommend that the Audit Commission reviews the status of District Audit with a view to further enhancing the separate identities of the two bodies (paragraph 14).
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| (c) | We would be very concerned if the Audit Commission backs away from the commitment to outsource Best Value inspection in 18 months' time. There is a danger that having recruited and trained a body of inspectors, the Commission may be reluctant to relinquish part of its role in relation to inspection. This should not be allowed to happen (paragraph 15).
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| (d) | We recommend that the Audit Commission phase out selective market testing (paragraph 19).
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| (e) | We recommend that the Audit Commission review cases where authorities can demonstrate 'special circumstances' with a view to allowing such authorities greater control over audit appointments (paragraph 20).
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| (f) | We see considerable advantages in audit staff remaining the same for the duration of the appointment. Providers should make efforts to ensure this happens (paragraph 21).
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| (g) | On balance we do not see a strong case for fundamentally altering the basis of public audit fees or the way in which they are determined. However, the Audit Commission should recognise the difficulties faced by small authorities in meeting audit costs. We recommend that the Commission determine a method by which smaller authorities, say those with populations under 50,000, are subject to lower audit fees (paragraph 23).
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| (h) | Given the high level of scrutiny that local authorities are now subject to, we recommend that local value for money studies should be phased out. However, there is a role for the Audit Commission to undertake some national VFM work, but only where it can be demonstrated that the issue at hand is not within the purview of Best Value (paragraph 28).
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| (i) | We recommend that the Audit Commission and DETR continue to review their respective sets of performance indicators to ensure that they provide meaningful, outcome-based measures of local authorities' performance (paragraph 33).
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| (j) | We recommend that the Public Audit Forum and the Government's review of central government audit arrangements seek out opportunities for increased joint work between the Audit Commission and the National Audit Office (paragraph 37).
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| (k) | We are alarmed at the current and future impact of a developing culture of over-inspection in the public sector. This burden seems to be particularly acute for local authorities. The Government must recognise the potentially dire consequences of failing to minimise and co-ordinate inspections of local government (paragraph 48).
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| (l) | We recommend that there should be an expanded role for the Best Value Inspectorate Forum which should meet more regularly and be supported by a formal, dedicated team within the DETR to provide a central 'pool' of overall policy analysis and advice to the different Inspectorates, and to ensure coordination of inspection effort. We also call upon the Government to increase the level of formal and genuine joint inspections so that, in time, this should be the norm rather than the exception. We recommend that the Government undertake a study to ascertain whether the inspection regime in local government delivers the significantly enhanced overall benefits required to justify the overall cost of an onerous inspection regime (paragraph 49).
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| (m) | We recommend that the Audit Commission introduce a 'managed inspection' approach for the inspection of Best Value, with only high risk local authorities and a sample of other Best Value reviews being subject to full inspections. We urge the Local Government Association and the Improvement and Development Agency to initiate more peer reviews, thus reducing the need for Best Value inspection (paragraph 55).
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| (n) | We recommend that the Government introduce a statutory duty on local authorities to place their full and unabridged annual audit letter in the public domain within 24 hours of receiving it, and make copies available to the public on request (paragraph 58).
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| (o) | We recommend that the Audit Commission explore ways of further engaging the public in both the audit process and its outcomes through, for example, use of citizens' juries and other Best Value consultation exercises and by obliging local authorities to place their audit letter on the Internet (paragraph 60).
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| (p) | We recommend that the Commission set a time limit within which auditors must resolve a challenge to an authority's accounts. This should be in the region of six months from when the objection was lodged (paragraph 65).
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| (q) | We recommend that the Audit Commission prepare a simple pro forma for completion by individuals intending to challenge an authority's accounts and an updated guidance note on the correct procedure. The system would also benefit from increased contact between district auditors and potential objectors in order to establish at an early stage whether concerns are valid. The Audit Commission should ensure that all auditors are properly prepared for their role in assisting potential objectors (paragraph 66).
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| (r) | We recommend that the Government launch a review of the arrangements for challenging local authorities' accounts. This review should cover the whole objection process, but should consider in particular whether those objectors who persist in launching spurious or vexatious complaints could be de-barred from doing so. The legal process for dealing with vexatious litigants may provide a useful model (paragraph 67).
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| (s) | We recommend that the Government make it clear that the role of auditors and inspectors is to highlight problems only and that the decision on whether to intervene will made by Ministers (paragraph 78).
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| (t) | We agree with the Commission that the grant distribution to local authorities is an issue for the Government to determine. We also recognise that local authorities' performance is not always a function of grant. However, we consider that more needs to be done to present the full facts alongside an assessment of an authority's performance. The Commission should set out clearly the level of resources available to authorities, in terms of Revenue Support Grant, fees, charges and Council Tax. Perhaps one way of achieving this would be to include comparative performance data for authorities with similar budgets and problems. This does not need to embroil the Commission in a debate over the adequacy or otherwise of the grant distribution mechanism (paragraph 84).
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