6:00pm Tuesday 13th March 2012
By Neil Vowles
Public bodies could save up to £100,000 on the cost of having their finances checked.
For the first time all audits of councils, primary care trusts and police authorities in England will be carried out by private companies which is expected to create savings of up to 40% in audit fees.
The move has been welcomed by councillors who have long campaigned against the fees councils currently pay to be audited by the Audit Commission.
The new agreement will see all public bodies in Sussex have their accounts audited by accountants Ernst & Young LLP in a deal worth £20 million a year.
The firm was chosen by the Audit Commission, the government body which currently audits around 70% of local authority accounts, without any input from public bodies in Sussex. The agreement will run for the next five years with the possibility of an extension for another three years.
After that individual bodies will be able to negotiate their own contracts directly with accountancy firms, something which many councils are already pushing for.
The new deal could lead to large savings for councils – West Sussex County Council estimates it could save more than £100,000.
Brighton and Hove City Council currently pays £387,000 in audit fees while even smaller borough councils fees are currently in excess of £130,000.
Brighton and Hove City Council needs to make savings of £17 million in 2012/13 while East Sussex County Council has had to find £19 million worth of cuts.
Conservative group leader Geoffrey Theobald said: “I have long complained about the Audit Commission’s charges, not only during my time on Brighton and Hove City Council, but also on the police and fire authorities.
“One of the key aims of the Government’s reforms is to bring the costs of auditing down for local authorities and so I welcome any move that will enable this to happen.”
A spokesman for East Sussex County Council said: “The cost of the audit of the county council’s accounts for 2011/12 will be £187,465. This is the fourth lowest cost of any of the remaining county councils and reflects both the size of the authority and the degree of confidence that the external auditor has in our internal financial processes.”
Hastings Borough Council leader Jeremy Birch said: “We want a more competitive environment that can save us money, so we are concerned about the length of time before councils can determine for themselves who their own external auditors should be.”
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