Government to scrap Audit Commission

News has leaked out that ministers are to scrap the Audit Commission and transfer its audit arm to the private sector.

According to a memo leaked to the Financial Times, communities and local government secretary Eric Pickles will formally announce his intention to disband the Commission tomorrow.

Pickles apparently wants a ‘decentralised’ audit regime, that will help local people judge the performance of councils and other public bodies.

Although the memo focuses on the Audit Commission’s role as a local government auditor and advisor, it also has a substantial role within the NHS.

Its audit arm audits NHS organisations at all levels, while its research arm has produced a number of important reports on health service finance and related issues.

Over the past three years, the Commission has run a major programme of work on Payment by Results and the data underlying the system.

Its PbR benchmarker was a winner in the ‘excellence in the use of healthcare information management’ section of last year’s E-Health Insider Awards in association with BT.

Meanwhile, its reports on the poor quality of data underlying the system – and on the poor standard of clinical coding and record keeping underlying the data – may have contributed to reported improvements, with knock-on benefits for patient safety.

Over the past decade, the Commission has also published a number of reports on medication errors that have made the case for e-prescribing.

In the leaked memo, Pickles says he wants to “refocus audit on helping local people hold councils and local public bodies to account for local spending decisions.”

He also says steps will be taken by 2012 to transfer audit functions to the private sector, so “councils will be free to appoint their own independent external auditors from a more competitive and open market. ” There will be “a new audit framework for local health bodies."

Some of the Audit Commission’s work on data will presumably transfer to the new NHS Commissioning Board, which is given the job of setting IT and data standards in the NHS white paper, ‘Liberating the NHS’, or to the Information Centre, which is given the job of co-ordinating and publishing healthcare information.

It is less clear where its medication and patient safety work will go, since the government has already announced that it will be scrapping the National Patient Safety Agency as part of its bid to reduce the number of arms length bodies in the health service.