Examination of Witnesses (Questions 300-333)
BELINDA WADSWORTH, REBECCA VEAZEY, AND MATTHEW SINCLAIR
21 MARCH 2011
Q300 Chair:
Good afternoon and welcome to the fourth evidence session of our
inquiry into the audit and inspection of local authorities. Just
to begin with, for the sake of our records, could you indicate
who you are and the organisation you represent?
Matthew Sinclair:
Matthew Sinclair; I am the Director of The TaxPayers' Alliance.
Rebecca Veazey:
Rebecca Veazey; I am a Policy Officer for the Women's Resource
Centre.
Belinda Wadsworth:
I am Belinda Wadsworth, Strategy Adviser for Local and Regional
Policy for Age UK.
Q301 Chair:
You are all welcome. Could we just begin with a general question:
what difference do you think the abolition of the Audit Commission
will make to the quality of local services?
Matthew Sinclair:
I think it will improve them. It will lead to councils being
better focused on the outcomes that local publics need. I think
it will lead to better value in audit and broadly be a good thing
for local government performance.
Rebecca Veazey:
I think it will be a bad thing for frontline services. The Audit Commission
played an important role in promoting equalities, and particularly
the Comprehensive Area Assessment provided a tool for ensuring
that women's needs and issues were taken into account in local
priorities, and that outcomes and improvements had a significant
impact on them.
Belinda Wadsworth:
Clearly the Audit Commission carried out a number of important
functions that we would very much like to see continued. Given
that the Audit Commission is being abolished, we want to
work with the main organisations to make sure that whatever is
put in place subsequently produces better outcomes for older people.
Q302 Chair:
I suppose there is a tension there in what you said between the
view of the Audit Commission as trying to do something on behalf
of central Government, with regard to standards and performance
and doing comparisons, or whether it should be looking to a more
localist agenda and assisting local authorities to perform better
and get their own priorities right. Is that a fair description
of the way it has been in the past and how change may be looked
at for the future?
Matthew Sinclair:
I think that the problem of the Audit Commission is that it was,
as a national quango, adopting a kind of form that worked—in
terms of its organisation of being a national quango—for
the National Audit Office looking at central Government, and was
applying that to local government. For that reason, it was a
very centralising force and that was part of the problem. Instead
of women's issues being represented by that 50% of the electorate
in each individual suit, it was being written through this organisation
acting out national government priorities. The star system was
the clearest example of that tendency coming into action.
Rebecca Veazey:
The work of the Audit Commission and the framework was not by
any means perfect, but it provided a way of holding local authorities
to account. In practice, what the WRC has found is that there
is a lack of gender awareness at a local level. Many local authorities
failed to meet their obligations under the Gender Equality Duty,
so these things are already not being met at a local level. By
having a national overview of how local authorities are performing
on those issues, it is almost a form of a safeguard.
Belinda Wadsworth:
We are comfortable with the functions that were previously carried
out at a more central level being carried out more at a local
level, but we are very keen to make sure that there is continued
oversight of those functions.
Q303 Mike Freer:
Turning to the abolition of the CAA, do you not feel that the
CAA was more process than outcome?
Rebecca Veazey:
To some degree it did produce outcomes. For women's organisations
particularly, they used it as a mechanism to almost enforce the
duty to involve; they used it as a way of engaging in local decision
making, and it almost empowered them to challenge the representation
of women and women's issues in local leadership.
Matthew Sinclair:
I have spoken to so many councillors and people at councils who
got good marks under the CAA, who viewed it with contempt. If
you can give someone a gold star and they can resent it, then
I think that says that something has gone pretty badly wrong with
your system. If it gives a lever for women's groups to get involved,
I do not think that local politicians are going out of their way
to ignore women's needs. You are talking there about an issue
that should have a pull and that accountability should happen
through the ballot box.
One of the reasons why it might not would be that
councils are chasing Audit Commission rankings instead of
chasing those voter priorities. I think it displaces other forms
of accountability, rather than being a pure addition to accountability.
We need to be thinking about some of what was missed and what
we should be trying to recreate. It should be our job to bring
accountability to local government in organisations like ours.
We should not hope for a shortcut through saying, "Well,
listen to the CAA." It should be, "Listen to us, because
we can try to persuade voters."
Rebecca Veazey:
Can I just make a point following on from what Matt said? In
reality, we are seeing equalities being equated with bureaucracy,
rather than being the most effective way to meet the needs of
communities. The abolition of the Audit Commission and issues
around the abolition of the Comprehensive Area Assessment are
quite sad, because we are seeing the Public Sector Equality Duty
being watered down. We are seeing that marginalised women, who
deal with our women's organisations and are involved in their
local communities, find that local authorities are not willing
to engage with them in practice.
Matthew Sinclair:
The best way of ensuring that people see the Equality Duty associated
with bureaucracy is to have it acted out through the Audit Commission.
If you have bureaucrats enforce equality, then people see that.
Q304 Mike Freer:
Would Age UK like to get a word in?
Belinda Wadsworth:
Last year we carried out some research, talking to a number of
older people's forums and organisations, and local strategic partnerships
and local authority staff, into the value and impact for older
people of the previous system. What our research found was that
the majority of people we spoke to did feel that the previous
system was particularly bureaucratic and onerous, and was very
processdriven rather than outcomesdriven.
However, there were a number of key lessons learnt
from the system, which I feel we should make sure carry on. For
example, the partnershipworking approach very much needs
to be built on. We did see some significant and very positive
examples of where older people were very much involved in the
decision making around those processes, and we would very much
want to see that continue.
Q305 Mike Freer:
In terms of if the other elements of equality and engagement fall
away, as you fear, wouldn't the equality impact assessments pick
that up, in that there is a duty to engage and to be seen to engage,
and take those views into account?
Rebecca Veazey:
As far as I know, under the new changes to the Public Sector Equality
Duty, there will not be that onus on doing the equality impact
assessments, or at least not publishing that out to the public,
which removes a mechanism for holding local authorities to account,
which is partly the objective of that decentralised auditing regime.
Belinda Wadsworth:
We very much share the concern about the equalities legislation
apparently seeming to be watered down and there not being such
a strong recommendation on reporting around that. We would very
much encourage any subsequent system to take a very strong equalities
approach.
Matthew Sinclair:
If you want to look at impacts you see as negative, with a group
like ours we can do that. We can be on the watch for those.
We can have grassroots networks that let us know when things are
going wrong. We should be using our own analysis to reveal when
these systems break, rather than relying upon impact assessments
or the CAA to do that for us. We can do that job better and I
think that is why we have to be here.
Q306 Mark Pawsey:
The Government clearly has an agenda to do away with the centralised
regulatory regime that we have had up until now. It sees a big
plank of an alternative route as being transparency—making
authorities publish every item of expenditure over £500,
for example. The Audit Commission did bring out some performance
data. How did you, particularly the campaigning bodies here,
make use of that information? Was it useful? Was it helpful
in your activities?
Belinda Wadsworth:
We very much support the move towards transparency, and having
information more publicly and freely available. We conducted
a small focus group research of the Oneplace website last year,
and found that the people we spoke to found it very useful indeed,
easy to understand and were happy to use it. For those people
we spoke to there, who are online users, it is clearly very useful
and accessible. However, 60% of people over 65 have never even
used the internet, so for us there is a major concern about information
being only provided in an online format. We very much want to
see that, as the transparency agenda goes forward, we have information
produced in a number of different formats, to make it very accessible
and easy to understand.
Q307 Mark Pawsey:
Don't you think that the fact that publishing it online would
mean that newspapers will print it and that people who you would
engage with would get the information through a different route?
Belinda Wadsworth:
That is oneway information. That is fine to get the information,
but if you then want to use the information in order to engage,
you need to have access to being able to analyse it in the way
that you choose to look at the services that you are looking at.
Rebecca Veazey:
I would say that one of the problems with publishing the data
is that data are not very useful unless they are disaggregated,
unless you are making them accessible and unless you are providing
them with some form of context. The major objection that my organisation
has with this armchairauditing approach is that it is very
reliant on the capacity, inclination and education of citizens.
We are concerned that marginalised groups will not necessarily
be involved.
Q308 Mark Pawsey:
Won't the media do that for the marginalised? Simply the fact
of making it available means that other people will do the analysis.
Rebecca Veazey:
I think the fear is about inconsistency, about oversight.
Matthew Sinclair:
Yes, it is possible that information could go out and would never
be used. Councils as far back as the 1980s were required to publish
publicity information. That never really had bite to raise the
issue of whether those costs should be controlled until we did
a report on it. In the end, that is going to happen. That is
what groups like us should be doing to assist the media. The
media will do it on their own; the media are very interested in
this sort of information and they get apoplectic when they do
not work properly, when they struggle to access them, as they
did in the early days with COINS before the best tools came out
to analyse it. Yes, some people who do not have the inclination
to access data will not be able to access data, but still you
are opening it out to a vastly wider array of groups and individuals
by publishing it like this than you previously were, so you will
get a greater variety of perspectives.
Q309 Mark Pawsey:
Would the people who are not able to access the data have read
the reports from the Audit Commission?
Belinda Wadsworth:
Possibly.
Mark Pawsey: Do you think
so?
Belinda Wadsworth:
Maybe. It depends how accessible they found them. As I said,
the people we had spoken to, who had used the online system, had
found it accessible. I agree: public information needs to be
developed to be far more accessible than it is currently if the
public is going to be able to hold public bodies to account in
the way that this transparency agenda assumes.
Matthew Sinclair:
I have read Audit Commission reports, and I have also read spending
over £500 releases, for example—to give one example
of a transparency release—and honestly I found the latter
in many cases much more comprehensible. It is at least clear;
it is at least functional. You have to do more analysis to get
information out and get conclusions out of it, but at least you
are not having analysis done for you in a fairly inscrutable way.
Q310 Mark Pawsey:
Is it the view of people representing older people and women that
we are going to lose something as a consequence of the lack of
Audit Commission reports?
Belinda Wadsworth:
I think it is more about, as we go forward, how we make public
information very, very accessible and also very comparable from
area to area. As I said before, while we are quite happy about
localist principles of local solutions to local needs and local
information and assessment, the public will also want to be able
to compare area for area.
Mark Pawsey: With regard
to women's groups?
Rebecca Veazey:
I would say I agree with Belinda's comments, yes.
Q311 Chair:
On that point, are we really empowering groups like The TaxPayers'
Alliance rather than empowering the public, because it is true
that the analysis will not have been done for the public by the
Audit Commission; it will be done for the public by you,
won't it, and you do have a political axe to grind on most of
these matters, don't you?
Matthew Sinclair:
What is great is that we can do it, and then people who disagree
with us can do it, and we can have a proper encounter between
those two understandings of the information that has come out.
We are breaking open a monopoly here. You do not have to think
that you want our reports to be the gold standard here; no one
is setting them up as that. We produce our work and we make it
absolutely robust but, if people disagree or if people do not
think we have made it robust, they can challenge that, and our
credibility depends upon getting that right to a very high standard.
We do not have the imprimatur of being a public sector body supposedly
speaking for the Government or anything like that; all we have
is our own credibility. We have to put that on the line and that
is what we will continue to do. It does not have to be just us.
All of us, all the organisations here and hundreds of others,
are responsible for analysing this information and then talking
to our grassroots supporters to try to find new ways of getting
it out to the public. That is our job.
Q312 Chair:
Some people might say that the Audit Commission or the Government
Department is generally relatively neutral. An organisation like
yours probably gets quoted more than any other organisation on
these matters, so you have a pretty good monopoly of quotes on
some of these issues, because you actually have a political point
of view to address, don't you?
Matthew Sinclair:
We have plenty of points of view, but I am saying that we can
be disagreed with. There are plenty of resources available to
organisations who disagree with us. They are not starved of cash,
starved of researchers. There are plenty of people out there
who can come out with both points of view. You are blowing that
open by transparency to such an extent now that we will have done
it by a multiplicity of organisations, and they will take different
routes. Some will go the direction of saying, quite independently,
that they are there just to check from as unbiased a perspective
as possible on the veracity of factual claims.
I was talking to the website Full Fact, which has
set itself up to do that very recently; there are plenty of organisations
like that. There will be some who are saying, "We have beliefs
about the best policies, and we see this evidence as supporting
that," and there will be groups that do it just because they
have a particular stakeholder group that they want to try to inform.
There will be all kinds of different approaches, and I think
they can compete. We have a free market in policy analysis as
well as in audits.
Q313 Simon Danczuk:
Should future inspection activity be limited to services to vulnerable
people then or scrapped altogether? What is your view?
Belinda Wadsworth:
We are concerned about the scalingback of inspection, and
certainly we are very clear that inspection of the safeguarding
of vulnerable people must continue.
Rebecca Veazey:
We would agree, and say that inspection of the promotion of equality
and protection of vulnerable groups is most important to maintain.
Matthew Sinclair:
If you are looking to promote the interests of women or the elderly,
the people who are best placed to do that and should do that are
here. That role, of scrutiny of local government, has to be performed
by civil society, who can do it genuinely independently, who can
do it not with an eye to the latest directive but with an eye
to looking for genuine problems. That will lead to a better performing
system. That is not one that can effectively be done by an Audit
Commission. It needs to be putting information out there. The
audit role still needs something, because we need to know the
information that is being released is in fact accurate at the
start. We need to have that solid empirical foundation. That
is where it should be: it should be at the audit stage, not at
the performance stage.
Q314 Simon Danczuk:
You do not think there should be inspection from the centre in
terms of local authority services to vulnerable groups?
Matthew Sinclair:
I think accountability should flow through voters and should flow
through scrutiny from the third sector.
Q315 Simon Danczuk:
You think that electors/residents are attuned enough with the
services provided by a local authority to various vulnerable groups,
whether they are older people or vulnerable women or anything
else, that they are able to make a judgment.
Matthew Sinclair:
They are generally better attuned by the Audit Commission, and
as to the extent they are not, we have to make them that way.
That is the only way you are going to have reliable protection
for vulnerable people.
Q316 Simon Danczuk:
You think that vulnerable groups can rely on a change every four
years, potentially, in an election, to determine whether their
services improve or not?
Matthew Sinclair:
The purpose of a representative democracy is not just that you
lay down the law once every four years, but that you have effective
scrutiny in between; you have people concerned about thinking
about those four years. "Every four years" is just
there as a Sword of Damocles hanging over people's heads; it is
not there to be the only form of scrutiny or the only democratic
function during that period. There are improvements we can make
there, but ultimately I think scrutiny of performance should be
done through the third sector, through civil society and through
elections. I do not think it can effectively be done by the Audit
Commission.
Rebecca Veazey:
I think that theory could lead to inconsistency and oversight,
and that is one of the main reasons why we favour the Audit Commission.
We think it provides that.
Belinda Wadsworth:
For us, it is very much a both/and. We are very clear that independent
external inspection audit needs to continue, but we also want
to encourage older people themselves to be able to speak up and
speak out. We are working very closely with CQC on a project
called Experts by Experience, where old people can go and take
part in the inspections that take place. We very much want to
encourage that kind of activity. For us, it is very much a both/and;
it is working hand in hand.
Simon Danczuk: I attended
an involvement event organised by Age UK in Rochdale this
morning before travelling down here, and there were plenty of
older people, dozens upon dozens of older people, making their
views clear about the local economic situation. It was a good
qualitative technique at work.
Q317 Mark Pawsey:
Could I just ask if Age UK and the Women's Resource Centre could
give us any examples of when you have looked at an Audit Commission
report and used that information to call a local authority to
account?
Belinda Wadsworth:
The research that we carried out last year throws up some very
good examples of where older people have been working very closely
with the preceding structures, the local strategic partnership
and influencing the local area agreements. In particular in East
Sussex, older people have been involved in every single decisionmaking
panel in the county, and I also know a very good example in Wiltshire,
where they have been very much involved in decision making and
on scrutiny panels and very much influencing the decisions.
Q318 Mark Pawsey:
I accept that, but that does not need the existence of the Audit Commission
to take place, does it?
Belinda Wadsworth:
It does need the existence of a performance management framework
that they can be involved in.
Q319 Mark Pawsey:
Nobody is saying that we are going to get rid of performance management;
we are simply saying the Audit Commission is not going to
do it. Authorities will continue to have that, and that information
will continue to be available to organisations such as yours,
so why should the abolition of the Audit Commission be necessarily
a bad thing?
Belinda Wadsworth:
We have been clear that we are looking to see the continuation
of a form of performance management framework. As we said in
our written submission, for us that could be locally, as opposed
to nationally, defined.
Mark Pawsey: The same
point to the Women's Resource Centre.
Rebecca Veazey:
In terms of the Comprehensive Area Assessment, that was used by
women's organisations to increase representation in local strategic
participations. In terms of the question you have put forward
about the need for the existence of the Audit Commission,
I would say that our main argument behind that is because the
framework has helped us in the past and we are unconvinced whether
under a decentralised regime it will actually work, and we will
have that same performance management framework that will evidence
the outcomes that we want.
Q320 Chair:
Is there not always a danger that you can get one authority that
really is failing? If it is failing, its performance management
might fail. If there is no oversight, it is hard luck for those
disadvantaged children who are getting an awful service and may
be put at risk, if they are going to have to wait for an election
in three years' time.
Matthew Sinclair:
In some of those cases you have had existing structures and authorities
have continued to fail. Those are very deepseated problems
in some local authorities. Hang on—we had the Audit Commission
writing reports about authorities saying that they have been irredeemably
and utterly failing for 15 years. You compose these questions
of: what if there is an authority that just continues to fail
where there is not a sanction of voters or where that is ineffective?
You can come up with these sorts of things: "What if you
are in an elevator and it is burning? You are in an impossible
situation; what do you do?" Those have existed, will exist,
and there are troubled authorities. We are not saying this is
a panacea that solves that, but the present system does not have
a panacea either. The best way of improving those has to be engaging
through local structures.
If you look at the last question, all of these local
groups can engage with how the council manages its performance.
This is part of what we should be getting away from with the
move away from the Audit Commission: to have councils setting
up structures to manage their performance that reflect local priorities.
All these things can come into being and they can be driven by
effective councillors and councils. If you have failing councils
and councillors, I do not think there is any evidence that the
present system is able to really kick them out in a serious way.
It can in the end say central Government needs to, as its ultimate
sanction. You still need a powerful Government, in the case of
absolute failure, to step in and remedy the situation. Again,
if you need someone to ask for that to happen, it does not need
to be the Audit Commission, because that is in the end a
very political judgment. It will be made politically and made
on the basis of groups demanding it. It does not need to be the
Audit Commission. I do not think, in those impossible situations,
the Audit Commission offers something invaluable.
Q321 Mike Freer:
Just a quick one: has The TaxPayers' Alliance done any research
to show that many of the authorities that have had significant
service failures have either had glowing reports and inspections,
been fourstar authorities or indeed been Council of the
Year? Having been a former council leader, we went for Council
of the Year. We were often advised not to, because you usually
crashed and burned the year after. Has The TaxPayers' Alliance
done any analysis?
Matthew Sinclair:
No, we have not done that. It is a good idea. What we have looked
at using and were considering at one point—because we have
various reports like the one that came out last week, the Town
Hall Rich List—is whether we should look at whether
there is a correlation between how well paid all these chief executives
are and their performance, as measured by the star system. We
decided we were not going to give even a tacit endorsement of
the quality of that measurement. Yes, it is a reasonable idea,
but not one we have done systematic research into.
Q322 Bob Blackman:
In the last financial year, the Audit Commission conducted 24
national studies and spent £5 million doing them. I
would be hard pressed personally to name them, but that is a matter
of opinion. How useful are these national studies and do you
think they provide value for money? Could I start with Matthew?
Matthew Sinclair:
I do not think they provide value for money, because I do not
think they have anything like the effect that you can see from
other reports. There are lots of groups. Even if you just look
at the generalists, there are us and organisations like Demos,
Policy Exchange and New Local Government Network. There are lots
of organisations producing reports that both have a higher profile
and a much more significant effect. At the same time, if you
look at a comparison to something like the National Audit Office
reports, for example, they do not have anything like the same
authority to them. They do not obtain that same power. It is
just so rare to see them cited, which I think shows that they
are not getting to the core of these issues or not in such a way
that people really find them indispensable. To that extent, and
given £5 million for 24 reports—those are
some pretty expensive reports—I would say they represent
very poor value.
Rebecca Veazey:
I would not say I would be best placed to comment, but happily
defer to Belinda on this one.
Bob Blackman: Belinda,
I know you found some of the reports useful.
Belinda Wadsworth:
Indeed, a couple of reports very much stand out for us: Don't
Stop Me Now, published in 2008; and Under Pressure,
published in 2010. For those of us who work in the age sector,
these are incredibly important reports that really reflect a state
of play with regard to tackling challenges in an ageing population
within local authorities. Reports like that will very much be
missed. We feel very strongly there is very much an ongoing role
for an organisation to produce similar comparable reports.
Q323 Bob Blackman:
You are experts in dealing with older people. Why should not
an organisation like Age UK do the same sort of thing, because
you are experts already?
Belinda Wadsworth:
We can produce similar reports. We do indeed produce a number
of reports. The issue for stakeholder organisations like ours
is actually about the accessibility of the information on which
to base those kinds of analyses.
Q324 Bob Blackman:
With the new transparency, you have all the information; you could
interpret the data.
Belinda Wadsworth:
We are ever hopeful, and it is absolutely critical for us that
stakeholder organisations that do have that capacity to provide
that kind of information to produce the reports have open access.
It is not easy at the moment, I can tell you, so we are very
much hoping that will open up.
Q325 Bob Blackman:
How should you be funded to do it, if you were to do it?
Belinda Wadsworth:
I will have to come back to you on that, if that is okay.
Q326 Bob Blackman:
Rebecca, in terms of your organisation, you are experts in dealing
with women in various different guises, vulnerable women as well
as creating greater equality. Why couldn't you do a national
report on the state of the nation, as it were?
Rebecca Veazey:
Capacity-wise, we are full at the moment, so realistically we
would not, but our role is we are a national membership body,
which supports women's organisations up and down the UK, so our
primary area is in research. We do feel that it would probably
be better placed for the Government to conduct that study, and
that we would be given the opportunity to feed into it.
Q327 Bob Blackman:
Clearly the Government is not going to do this. That is quite
clear: the Government will not do these studies in the future.
So you are saying this is a potential risk. Are you prepared
to step into the breach?
Rebecca Veazey:
I would have to confirm with my chief executive. If he were willing,
we would consider it.
Q328 Bob Blackman:
Matthew, here is a golden opportunity.
Matthew Sinclair:
We try. We do our bit. We are a small team, but we will do this.
As far as funding goes, there are plenty of people who are interested
in these issues. Fundraising is a challenge for organisations
like ours; it is a challenge for anyone, but it is much better
they are funded by people who are interested in the issues, so
they become part of the public sector nexus, which gives it greater
independence, ideally by a broad base. That is how you need to
continue this work. Age UK is not a poor organisation. They
are a substantial body and they do very large, heavyweight reports.
You can improve data availability and should, but I do not think
there is any reason that there is an inherent lack of capacity
for policy reports in civil society.
Q329 Chair:
Given that the Local Government Association has been talking about
the work that they might do among their members to try to get
some comparative data and maybe look at comparative studies of
various kinds, I just wondered if any of you have talked to the
LGA about whether you could act in partnership with them on some
of this work.
Belinda Wadsworth:
Not directly, not yet, but we are certainly very open to working
with the LGA in partnership.
Matthew Sinclair:
We tend to have an adversarial relationship with the LGA, and
we are quite comfortable with that.
Chair: It will probably
not be a marriage made in heaven today then.
Matthew Sinclair:
There is some stuff where, if the LGA wanted to do more of this
with us, that is great. Honestly, the LGA probably is not the
best organisation to do it, because they have deep problems trying
to work out whom they are representing, because they are representing
councils that fiercely disagree with each other. There are probably
better organisations to do it than the LGA, but there are loads
of them. There are loads of organisations that are interested
in this; there is no shortage of people interested in local government
policy questions. There is just not a shortage.
Q330 Simon Danczuk:
There was some consensus earlier about the need to continue to
do audit of local authorities, local government. My question
then is about whether they can remain independent if they are
appointed by the local authority itself, as opposed to something
like the Audit Commission. I wondered whether you had a view
on that.
Matthew Sinclair:
I think that a system that can work for Tesco, BP and Vodafone
can work even for Kent County Council and Birmingham, the largest
of their respective types of authority. Those concerns about
independence are important, which is why they are addressed by
massive corporate risks to accountants who get it wrong. We have
seen examples when accountants have not been sufficiently rigorous,
and it has led to death for even the largest accountancy firms.
There is a very heavy sanction; if it goes wrong, there is equally
regulation. Regulators from the National Audit Office to PricewaterhouseCoopers
are all regulated by the ICAEW, which has a very high reputation.
It does not mean the system is perfect; it does not
mean you do not need to be extremely hawkish about the relationship
between auditor and audited, but the best way to do that is to
do it once for companies. There is a very specific issue with
central Government as regulator, and that is why I think the NAO
is a very different case, but for local authorities I do not see
any reason why we would want to do the business of regulating
auditing twice. It is a big job, and I think we do it once and
we get it right for corporates and for councils. There is no
reason the same system cannot work for both.
Q331 Simon Danczuk:
It is public money, isn't it?
Matthew Sinclair:
Sure, it is public money, but it is enormously important if there
is a failure of financial controls at a major corporate; it is
extremely important. I am the last one here to decry the importance
of it being public money, but it is important with respect to
whom you are accountable to, not who does your auditing. The
audit just needs to be rigorous and, to the extent that we can
ensure that, we need to ensure it for corporates and for councils.
I think we can; I do not think that accountancy is a great failure
that we would not want to let touch any other industry. That
regulation is one that we can shift across from the existing private
sector to local government.
Q332 Simon Danczuk:
Just to follow that, you mentioned Tesco. I can stop shopping
at Tesco. Well, I do not shop there anyway, but I could move
to Morrisons. I cannot at the moment change from Rochdale Council
in terms of service provision.
Matthew Sinclair:
You are not just preaching to the converted; you are preaching
to the priest on this issue.
Simon Danczuk: Let me
just say: there are no additional safeguards because it is public
sector, public money.
Matthew Sinclair:
The additional safeguards have to be over accountability. The
problem in the end in the public sector is not a lack of auditors;
it is a lack of shareholders. It is the fact that you cannot
go elsewhere. You need to have a substitute for that, which should
in the end be the public voting. I am absolutely 100% with you
on the fact there is a big difference between these two, but I
think that it is not audit where the difference between them needs
to manifest itself; it is greater democratic accountability, and
it is heightening that process steadily through reform, which
needs to be in place. The audit function, that basic making sure
that financial or other records are accurate, that job is the
same. We just need to use that information in different ways,
because they should be accountable to very different groups of
people.
Q333 Simon Danczuk:
Belinda, what is Age UK's view?
Belinda Wadsworth:
Our view very much would be about the need to continue the independence
of audit, and we are not specialists in public audit, so really
these are broad principles, and there is a need for audit to be
regulated in order to maintain public confidence in public spending.
Rebecca Veazey:
I would say the latter point about maintaining public confidence
is very important.
Chair: Thank you very
much indeed for a very lively session. There were somewhat different
views, but it was all the better for it. Thank you very much
indeed for your contributions.
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