Page last updated at 16:12 GMT, Tuesday, 7 September 2010 17:12 UK

Government defends plans to scrap watchdog

Communities Secretary Eric Pickles has defended the government's decision to scrap local government spending watchdog, the Audit Commission.

Responding to an urgent question by Labour's Clive Betts on 7 September 2010 Mr Pickles said the move would "replace bureaucratic accountability with democratic accountability" and save the taxpayer "£50m a year".

The commission's research functions would cease and its in-house audit practice would be moved to the private sector, he said, allowing councils to appoint their own independent auditors from a "more competitive and open market".

This will "refocus audit on helping local people to hold councils and local public bodies to account for local spending decisions".

But shadow Communities Secretary John Denham said Mr Pickles' decision had been taken "in secrecy" and warned it would lead to a "cosy, incestuous relationship" between councils and the firms inspecting their books.

"It wasn't in the coalition agreement, it wasn't in the published work plan of his department. Why did it have to be rushed out without consultation?" he asked.

And he said he feared the move would end up costing the taxpayer "far more than it would save".

But Mr Pickles said the Audit Commission had already looked at putting its audit function into the private sector before he announced his intentions.

"It was once a great organisation. It did make a change to local government but local government has changed itself and it is time to move on", he said.

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