ACCA backs central oversight of local authority audits, but warns of risks

ACCA backs central oversight of local authority audits, but warns of risks

The global accountancy body has thrown its support behind the UK government’s proposed overhaul of local authority audits but warns that the reforms lack critical detail on funding and execution.

The Association of Chartered Certified Accountants (ACCA) has welcomed the Ministry of Housing, Communities and Local Government’s proposal to establish a Local Audit Office (LAO)—a new central body to oversee audits of English local authorities.

The move aims to replace the fragmented system that has led to delays, inconsistent oversight, and a backlog of unaudited accounts. However, ACCA has cautioned that without a clear resourcing strategy and talent pipeline, the reforms risk repeating past mistakes.

A Step in the Right Direction, But Questions Remain

The government’s consultation outlines a vision to fix what it calls a “broken” local audit system. Its eight core principles include mandating audit committees, improving accountability, and establishing the LAO as a statutory, independent body.

The plan effectively re-centralises audit oversight, marking a return to a more structured regulatory framework.

In principle, ACCA sees this as a positive development, noting that a single oversight body could improve efficiency and standardisation. However, the absence of detailed funding plans or an impact assessment raises concerns about the LAO’s long-term viability.

“Without a clear resourcing plan, it’s impossible to see how the LAO will work in practice,” said Mike Suffield, Director of Policy & Insights at ACCA and a former director at the National Audit Office.

Severe Skills Shortages in Local Audit

Beyond funding, workforce shortages remain a critical barrier to effective reform. ACCA highlights a chronic lack of skilled professionals in local government finance, with 26% of accountancy roles and 21% of internal audit positions currently vacant.

“Capacity challenges in both accounts preparation and audit are long-standing and deep-seated,” said Glenn Collins, Head of Policy, Technical & Strategic Engagement at ACCA UK. “Fixing local audit means not only addressing oversight but also ensuring there are enough qualified professionals to do the work.”

Accountability and Transparency at Stake

The stakes are high. Delays in local authority audits undermine transparency, weaken public trust, and hinder taxpayer accountability. Without high-quality, timely audits, local entities cannot be properly scrutinised.

While ACCA backs the reforms, it warns against quick fixes that compromise audit quality.

The government, it says, must take a long-term approach—one that funds the LAO properly, strengthens the pipeline of audit professionals, and restores confidence in local authority financial oversight.

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