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From Wikipedia, the free encyclopedia

Audit Commission
Audit Commission Logo.png
Logo of the Audit Commission
Agency overview
Formed 1983
Headquarters 1st Floor Millbank Tower
London SW1P 4HQ

The Audit Commission is a public corporation in the United Kingdom. The Commission’s primary objective is to improve economy, efficiency and effectiveness in local government, housing and the health service, directly through the audit and inspection process and also through value for money studies.



The Audit Commission was established under the Local Government Finance Act 1982, to appoint auditors to all local authorities in England and Wales and it became operational on 1 April 1983.[1] The National Health Service and Community Care Act 1990 extended the remit of the Commission to cover health service bodies. Legislation covering the Commission’s activities was consolidated into the Audit Commission Act 1998. 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.

On 1 April 2005 the Commission's remit in Wales transferred to the Auditor General for Wales.


Westminster Council 'homes-for-votes'

The gerrymandering scandal at Westminster Council was uncovered by the Audit Commission's District Auditor, John Magill, who found that between 1987 and 1989, council houses were sold at below market value to families likely to vote Conservative.[2]

Mr Magill found the former leader of the council, Dame Shirley Porter and five other council officials 'jointly and severally' liable for repaying £36.1 million to the council.[3] Mr Magill's verdict was upheld in the House of Lords in 2001.[4] Dame Shirley Porter eventually settled in 2004, paying £12.3 million to Westminster Council.[5]


  • Audit: Auditors appointed by the Audit Commission are responsible for auditing local government in England, National Health Service Trusts and other local agencies in England, covering local government, health, housing, fire and rescue and community safety.
  • Assessment: The Commission produces performance assessments for councils, fire and rescue services, and housing organisations. In July 2009, they launched a new Comprehensive Area Assessment- a new way to assess local public services.
  • Research: The Audit Commission publish studies which analyse and comment upon wide ranging social and financial issues in the UK.
  • Data-matching: The National Fraud Initiative compares payroll and benefits records to find evidence of overpayment and fraud.

The Audit Commission works in partnership with, but operates independently of, a number of Government Departments including the Department for Communities and Local Government, the Home Office, and the Department of Health.


Chairman and Commissioners

The governing board of the Audit Commission is made up of Commissioners appointed by the Department of Communities and Local Government. Since October 2006 their chairman has been Michael O'Higgins, who had for 10 years previously been managing partner of PA Consulting.

Chief Executive

The Chief Executive of the Audit Commission is responsible for the day-to-day running of the Commission. The current Chief Executive is Steve Bundred, who has held the position since 1 September 2003. Previous Heads have included Sir John Banham (later of the CBI), Sir Howard Davies (later of the CBI), Bank of England, FSA (Financial Services Authority) and LSE (London School of Economics), and Sir Andrew Foster.

Criticism and controversy

  • The Commission has been criticised for its methods, particularly how it rates councils and health organisations. Liberal Democrat MP Vince Cable described the process organisations go through to earn stars as "disrespectful and utterly perverse".[6]
  • Management consultant John Seddon called for the Commission to be scrapped,[7] which led to what The Times described as a "caustic personal attack" on Seddon from the Commission.[8]
  • In 2009, the Commission caused controversy when it published a report[9] into the 2008–2009 Icelandic financial crisis which accused seven local authorities of acting negligently by depositing £33 million into Icelandic banks a few days before they collapsed in October 2008.[10] It later transpired that the Audit Commission had itself deposited £10 million in Icelandic banks in the months leading up to the collapse.[11]

See also


External links


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