Mebbes aye, mebbes naw…

What to make of the UK Government’s abolition of the Accounts Commission?  It’s a tough one.  

On the one hand, I am always immediately suspicious of any measure that creates an unholy political alliance (in this case, Eric Pickles and Ken Livingstone). Moreover, the prospect of ever greater riches for the big accountancy firms and more accountants earning a living off my taxes fills me with dismay. 

Yet, it’s the kind of cost cutting that on one level, in our new austerity times, kinda makes sense.  Why do we need public auditing functions replicating services that are already freely available in the private sector?  Charities and voluntary sector organisations above a certain income level all have to employ private sector accountants to audit their books.  Most manage to do so without even a whiff of an accounting scandal.  Such scaremongering is just that.

But could we, should we be proposing a similar deathknell for public audit here in Scotland?  At this point, you might want to make a cup of strong black coffee, for it makes for pretty dense, but interesting, Sunday reading…

In Scotland, we have an Auditor General for Scotland, the Accounts Commission and Audit Scotland. 

The Auditor General’s  role is to examine how public bodies spend public money and to make sure they manage their finances to the highest standards and achieve value for money.  Robert Black is the current Auditor General and he reports to the Scottish Parliament.  Bodies that he scrutinises include Scottish Government directorates, government agencies like the prison service and Scottish Natural Heritage, all the various bits of the NHS and all the quangoes. 

Audit Scotland supports his work and he is accountable for the work of Audit Scotland to the Scottish Parliament.  Warned you it was complicated…..

But Audit Scotland also supports the work of the Accounts Commission which examines how Scotland’s 32 local authorities and 44 joint boards and committees (fire and police boards mainly) manage their finances, and helps them to do so efficiently and effectively.  The Commission also promotes best value and publishes information every year about the performance of councils in particular.   It apparently is independent of the Scottish Government, though it acknowledges that its 12 members are in fact appointed by the Scottish Government.

So, in Scotland we have one man in charge of auditing central government and its various functions and bodies, a separate body in charge of auditing local government and its various associated bodies but really, it is another organisation that appears to do the work, conducting the “detailed and systematic” investigations.  Audit Scotland employs around 300 staff;  the Commission consists of 12 members of the great and the good (sic) and there is of course, the Auditor General himself.

How much does this triumvirate cost?  Audit Scotland’s operating costs are £27m per year (including in a neat twist audit costs of £6m – who audits the auditors then?)  These are met through a £7m grant from the Scottish Parliament and by the fees paid by everyone it audits.  Bizarrely, the Accounts Commission doesn’t detail any expenditure in its annual report – so much for leading by example on transparency.  Their costs are buried in Audit Scotland’s accounts with the 12 members all receiving remuneration totalling over £100,000 per year.  The Auditor General doesn’t appear to have any expenses, or at least doesn’t feel the need to publish these or account separately for how he spent his time in any given year.   Though again, you can find out via Audit Scotland’s accounts that he earned between £145 and  150,000 per year.  You couldn’t make it up….

Would abolishing the lot save money?  Mebbes aye, mebbes naw. 

Sacking the 12 Commissioners and the Auditor General would make minimal savings, though there would be a certain degree of satisfaction in shutting off the gravy train for some of Scotland’s serial public appointees.  And most of Audit Scotland’s staff would probably end up in the private sector having received generous pay offs that would actually cost us in the short term.   The £20m in fees wouldn’t really be saved.  It would have to be paid by audited bodies to the private sector instead.    But the Scottish Parliament and therefore the Scottish block grant would conceivably be better off to the tune of £7m.  Which you could argue is small change in the scheme of things, or that every little helps.

Inevitably vested interests (and of course unreconstructed lefties who still view everything public as good and everything private as bad) would maintain that the public pound would be at risk without this great phalanx of public accountants shining a light into dark corners. 

But ask yourself this, who audited all those councils, health boards and public bodies that had assets in Icelandic banks?  Who approved such reckless behaviour with public money?   Does what these three bodies do and say actually make any difference to how public bodies perform and how they manage their finances?   Before you answer, you might like to look at this little nugget of buried news and wonder why it wasn’t the Accounts Commission that investigated and reported….  And then wonder just how much else gets swept under the very plush carpets of the public sector.