REPORT: Rethinking local audit and accountability

There is a deep democratic deficit in local government. The UK is one of the most centralised countries in the world. Turnout in local elections is low. In many councils there is no effective opposition, further weakening accountability. This is no accident, rather a result of concentrated efforts by the central government to centralise power and undermine the public sector functions of local government. 

This democratic deficit is further reinforced by a lack of oversight. Our previous report, ‘Democracy Denied: Audit and accountability failure in local government’ documented the way current local government audit arrangements contribute to a deficit in oversight and failure to consider the public interest. Private audit firms who are supposed to scrutinise councils act in consultancy roles for them, as well as banks and companies authorities have contracts with. This is compounded with a fragmented oversight structure where no regulatory body is willing to intervene even though residents are sounding the alarm across the country.

We believe a wholesale rethink of public audit is needed, and the public needs to be central in the design of an accountability regime. Why are current audit arrangements failing? Why is local audit neglected? What does public interest mean, and what role should the public have in determining it? These questions link to a conversation our society needs to have about the function of public audit and what real public accountability could look like.

This publication intends to start the conversation, based on our previous report as well as events we organised during May and June on citizen audits, participatory democracy practices and local audit reform. Accountability is more than audit. Audit needs to be part of wider accountability processes that are necessary for democracy, rather than reproducing and protecting a particular form of economic thinking. To put public interest in its heart, accountability needs to include real-time, dialogue based democratic practices.