Large firms clean up local Audit Commission contracts

BDO, GRANT Thornton, Mazars and Top 30 firm Littlejohn, have picked-up audit contracts for town and parish councils.

The Audit Commission announced last year it would no longer carry out audits for local governments and put them out for tender to the private sector.

The contract wins will last five years with the firms appointed this September to work on the 2012/13 accounts.

BDO and Grant Thornton have won 32% of all local contracts respectively, worth £900,000 each on an annual basis, with Littlejohn picking up 25%, £700,000 annually, and Mazars 11%, £300,000.

Chief executive of the Audit Commission, Eugene Sullivan, said: “This shows the bulk purchasing power of the Audit Commission. We have attracted very competitive bids from private audit firms, putting the money saved back into the budgets of local bodies.

“The Commission’s scale of audit fees will be fixed at these lower levels for five years. The new scale fees will be announced in May by the Commission.”

Earlier this month the large contract wins were announced with Grant Thornton taking the biggest slice of work with four contract wins, worth £41.3m a year. KPMG will pull in £23.1m from their audit wins and Ernst & Young £20m.

DA Partnership, set up as a spinoff by Audit Commission head of practice Gareth Davies, won just one large contract – worth £5m a year. As it failed to win other contracts, the partnership could not launch as an employee-owned independent firm and has become a wholly-owned subsidiary of Mazars, trading as Mazars DA. A spokesman for the Audit Commission said it did not bid for the smaller contracts.

The latest announcement completes the process of outsourcing the Audit Commissions contracts to the private sector.