Thursday, 28 April 2011

Nearly half of councils oppose fixed term tenancies

Inside Housing has surveyed 71 cabinet members for housing on their plans for fixed term tenancies. The survey found that 42 per cent plan to reject the 'flexible' (fixed-term) tenancies introduced in the Localism Bill. These include members of all three main political parties.

The Localism Bill requires councils to publish a tenancy strategy. All registered providers of social housing should then have regard to this tenancy strategy in framing their own tenancy policies. The survey found that most councils were planning to support "affordable rent" development by housing associations in their area, or were still consulting on the decision. However, five councils were opposed, including Conservative-controlled South Derbyshire and NE Lincolnshire, which is under Liberal Democrat minority control.

Inside Housing also reports that Labour controlled Islington will not support housing association bids for development funding under the government’s affordable rent programme. It expects new housing to be developed without Homes and Communities Agency money and let at traditional social rent level - a move it will support by granting them land and around £1 million of the £3.7 million it expects to receive under the new homes bonus.

Punitive underoccupation proposals exposed

Housing Minister Grant Shapps answered an innocuous looking written question from Shadow Minister for Welfare Reform Karen Buck on Tuesday. But the answer revealed the scale of hardship that the restrictions to housing benefit to underoccupiers contained in Welfare Reform Bill will bring.

Buck asked how many one bedroom properties were let to existing social tenants in 2009-10. The answer, drawn from CORE lettings returns, was 31,300. Yet the government's own impact assessment of the proposals estimates that there are eight times that many working age tenants receiving housing benefit who need one bedroom and are occupying larger accommodation.

From April 2013 social tenants of working age will only be eligible for benefit to pay for a property which matches their family size. Disabled people will be entitled to an extra room for carers. The Department for Work and Pensions estimates that this reform will affect a massive 670,000 social tenants, rising to 760,000 by 2020 with increases in the pension age. This is one third of all social tenants of working age. The average reduction in housing benefit for affected households is estimated to be £13 per week, taking into account forecast increases in rents.

Clearly not all of those affected will be able to transfer to smaller social rented homes, even if they wish to do so - there are simply not enough properties of the 'right' size. Some will decide to move to smaller homes within the private rented sector and others are likely to become homeless as they run up arrears through their inability to meet the shortfall between rent and housing benefit.

Steve Hilditch writing in Redbrick calls the policy "callous, coercive and destined to fail." He says:
"The policy is the opposite of the ‘moral hazard’ – where people are insulated from the consequences of their own actions.  In this case people will face the consequences of the government’s actions with no reasonable course of action open to them to avoid or pre-empt or respond to the change in policy.  It is coercive and in a nasty way: if they cannot move, they will face deliberate impoverishment with no way out. "
The National Housing Federation describes the measure as "punitive, very poorly targeted and will do little to address the problems of overcrowding."  Its Head of North Derek Long got a rare opportunity to explain the issue to the general public in a radio package on BBC Radio Manchester on Monday - available on iPlayer until 2 May.

Wednesday, 27 April 2011

Poll claims public support for social cleansing

David Cameron's favourite think tank, the Policy Exchange has published a report claiming public support for excluding social tenants from expensive areas.

Just Deserts? examines public attitudes towards fairness, poverty and welfare reform by social class, political persuasion and income with data from a YouGov poll.

The poll finds strong support for asking the long term unemployed to do community work in return for their benefits, and also support for a cap on child benefit.

There are two rather loaded statements on social housing that respondents were asked for their views on:

1. People should not be offered council houses that are worth more than the average house in their local authority.

It isn't clear whether this means the market rent would be more than the average or the resale price would be more than the average. Either way, it unlikely that social housing properties would command more than the average.

2. People should not be offered council housing in expensive areas.

This proposition leads respondents down the line of creating mono-tenure social housing ghettos. The poll found a majority of all groups agreed with the statements, including those who actually live in social housing.

The report concludes that:
"There has been comparatively little research on the allocation of social housing. But again, the findings in this poll seem to suggest support for some quite radical changes."

Crisis of care predicted by Labour survey

Shadow care services minister Emily Thornberry has claimed the the government is failing to protect social care, after a survey of local councils by her office found that nine out of 10 local authorities who responded were planning to charge more for residential accommodation. Other councils are planning to shut centres altogether or dramatically tighten up the eligibility for places over coming year.

Thornberry told The Telegraph:
"The Tory-led Government’s approach means huge changes are being brought in very quickly, giving little time for consultation with staff and service users. On top of this, Local Authorities are faced with the confusion of David Cameron’s wasteful top-down reorganisation of the NHS, which means that they are unable to plan for the long term." 
The Care and Support Alliance, in its recent evidence to the Dilnott Commission, reported that 23% of respondents reported that their care had already been cut back. However, the High Court recently ruled that Birmingham City Council's decision to to stop providing care packages for about 4,000 adults whose needs are assessed as being substantial was unlawful. The decision could have repercussions for other councils attempting to make similar cuts in social care.

Tuesday, 26 April 2011

Government attack on equality "red tape"

Earlier this month the government launched its "Red Tape Challenge" website, as part of the Coalition Programme for Government's campaign against "costly, pointless, and illiberal government red tape".

The government has identified over 21,000 statutory rules and regulations in force and is using the website to publish, sector by sector, all existing regulations and invite members of the public and interested parties to say which regulations:
  • should simply be scrapped;
  • have the right aim, but one which could be achieved without regulation;
  • could be made simpler, better designed, or consolidated with other regulations
  • could be implemented in a less burdensome way, or
  • are well-designed, good ones that should be kept.
One of the first targets is the 2010 Equalities Act - primary legislation only recently passed by parliament that brought together and harmonised existing legal duties aimed at preventing discrimination and added new duties and responsibilities. This topic has so far attracted over 3,700 comments, many supportive of the legislation - a response only exceeded by the public's support for the retention of hallmarks on jewellery.

Redbrick, the Labour party's housing blog, expresses concerns that the government may be planning an attack on the the purpose of the equality regulations.

When he launched the Red Tape Challenge, David Cameron promised that the presumption will be that regulations should go, unless there is a "clear and good justification for government being involved". He told ministers that they would be held personally accountable for the number of regulations from their departments, and promised:
"Be in no doubt: all those unnecessary rules that place ridiculous burdens on our businesses and on society – they must go, once and for all."

Wednesday, 20 April 2011

Housing benefit cuts could increase homelessness

Homeless woman with dogsCrisis has produced a national survey supporting its fear that many of the 88,000 people affected by the Government's planned cut in housing benefit could become homeless if this goes ahead.

The Government is pushing through changes to extend the Shared Accommodation Rate (SAR) to 25-34 year-olds, which will see an average cut in housing benefit of £47 per week. This is because their benefits will only cover the cost of a room in a shared house, instead of a self-contained flat.

Between 7 and 13 April Crisis surveyed housing advisers across Britain about the impact of the current SAR on their work and clients, and their thoughts about the consequences of extending this rate to single people aged 25 to 34.

Summary of findings
  • 87% said there would be difficulty finding appropriate properties for people on the revised rate
  • 74% said there would be difficulty housing clients for whom sharing is not appropriate 
  • 74% said that the current SAR is a serious barrier to their work with under 25s, or that they do not work with this age group because of it
  • 4% said they have no clients who will be affected by the change
  • 62% felt there would be a higher risk of tenancies breaking down
Crisis would like the Government to rethink its plans, making the point that 25-34 year olds already make up 34% of its clients.

Monday, 18 April 2011

Bromley conservatives may delselect Bob Neill

The Telegraph reports that disgruntled councillors in his Tory heartland constituency of Bromley and Chislehurst have threatened local government minister Bob Neill with deselection as their parliamentary candidate over the government's indiscriminate attacks on "local government proflicacy".

 According to the Telegraph Neill's boss Eric Pickles recently attended a meeting of Tory councillors and wished them all "goodbye", joking that they were all going to lose their seats in May's local elections.

Activists claim to have written to Neill to warn him that he risks deselection if attacks on frugal Tory councils continue. One told the Telegraph:
"We know how to run a tight ship. And yet we have Mr Neill repeatedly lecturing us about salaries and ordering us to cut back even further than we are doing.

"It's quite clear that ministers are trying to pass the buck to local councils. We are doing everything we can to find cuts but we are constantly being slagged off by the centre.

"Pickles and Neill are trying to dump all the ills at our door and tell people 'if you have a problem, blame your local council'."

DCLG finalises data requirements

The Department for Communities and Local Government has published a finalised list of the monitoring data that will be required by Whitehall.

The press release states that it contains:

"Everything that local authorities should expect to provide to central departments in 2011-12. Councils will not have to provide anything that is not on the list unless extra funding is provided."

Under housing, the list contains datasets such as the BPSA, HSSA, NROSH and CoRE, but all have an 'under review' status.

For BPSA and HSSA, the documents confirm that data will be collected with minor changes for 2011-12, and with a longer term review planned for 2012-13. For NROSH and CoRE there is no confirmation on when a review will take place or if they will be retained at all going forward.

Pickles offers "social responsibility deal for town halls"

In a move heralded by Secretary of State for Communities Eric Pickles as action to boost support for voluntary sector and cut red tape for councils, the government indicated its intention to withdraw the previous government's 56 page statutory best value guidance "Creating Strong, Safe and Prosperous Communities" and replace it with a single page directive.

The new guidance will say that authorities should seek to avoid passing on disproportionate cuts to the voluntary sector, give at least three months notice if they are intending to end or reduce funding to a community organisation and allow groups to put forward their own suggestions for how to reshape a service.

Pickles is delivering on the threat he made in March to use statutory force "to make sure that voluntary groups are getting a fair crack at the whip".

The new guidance will reiterate the duty imposed by the Local Government Act 1999 to consult a wide range of local persons, including local voluntary and community organisations and businesses in deciding how to secure continuous improvement to the way it fulfils its functions. The current guidance includes a more wide-ranging statutory "Duty to Involve".
The consultation period will be three weeks short of the standard 12 weeks, ending 14 June 2011. This is justified by the need for "swift action in light of near-term local budgetary decisions".

Pickles said:
"I'm offering a social responsibility deal for town halls: I'm tearing up the unreasonable Whitehall red tape that costs them money and wastes their time. In return, local councils should treat local community groups with the full respect they deserve.

"I'm not asking councils to do anything that I wouldn't do myself, so all central government departments are also signing up to these fair new standards."
Whilst the move has generally been welcomed by the voluntary sector, some commentators, such as Professor of Public Policy and Management at Manchester Business School Colin Talbot, argue that it is a mistake to revoke the Duty to Involve, and contrary to the Government’s stated aim to stimulate a culture of citizen participation.

Thursday, 14 April 2011

Crazy housebuilding targets suggested by Cameron advisors

Inside Housing's Isabel Harding has broken a story that the government wants to increase the supply of new homes to 450,000 a year - which would be more than three times the number built last year.

The latest national statistics on house building show that 146,730 new homes were completed in 2009/10. The highest level of housebuilding completions ever achieved in the UK was in 1968, when 426,000 new homes were built.

Harding says that the aspirational figures came out at a meeting of the prime minister’s deputy director of policy, and other Downing Street advisors with small developers and the head of the Federation of Master Builders. The suggestion is that the target will feature in the government’s housing strategy, which is due out this summer.

When news of the housing strategy review emerged in January the CIH's Deputy Chief Executive Richard Capie said, 'There is a lot of speculation about who’s working on it but we don’t think it is people within the [social housing] sector.’ Judging by the absurdity of the suggestion that housebuilding could be tripled in a recession and by a government that has scrapped Labour's housebuilding targets, Capie was right.

Labour launches review of anti-social behaviour policy

SD7109 : Read all about it! by michael elyThe Shadow Home Secretary Yvette Cooper announced a review of the Labour Party's antisocial behaviour policy during a visit to Blackpool on 13 April, amid claims that the coalition is weak on crime.

Cooper hit out at the coalition's proposals to replace ASBOs with civil injunctions saying:
"It's not just the cuts to police officers that worry me, they are also tying the hands of the police and local communities that want to put a stop to antisocial behaviour in their area."
She admitted that Labour's Respect agenda did not eradicate persistent nuisance behaviour in local communities, but said more should be done now to address the problem.

Monday, 11 April 2011

Converting offices could ‘deliver 250,000 new homes’

Communities Secretary Eric Pickles, perhaps inspired by pre-Christmas reports of the "Minister for homeless" sleeping in his Commons office, has launched a consultation that proposes to scrap the planning approval requirement for changing use from a commercial property to a residential property.

Pickles said:
"Many towns and cities have office blocks, warehouse and business parks needlessly lying empty, while housebuilding has fallen to the lowest in peace time history because the planning system has tied developers up in knots of red tape.
"By unshackling developers from a legacy of bureaucratic planning we can help them turn thousands of vacant commercial properties into enough new homes to jump start housing supply and help get the economy back on track. Councils already have powers to give greater local planning discretion and they should us them more to promote growth."
The CLG press release says:
"If all the long-term office space currently available was converted it could potentially deliver 250,000 new homes and save just under £140 million over ten years in unnecessary red tape costs."
This follows the publication of More Homes: Fewer Empty Buildings from centre-right Policy Exchange last month.

A wider review of the change of use rules, known as Use Classes Orders, and its interaction with permitted development rights will also be carried out: the Use Classes Order was last revised in 2005.

Thursday, 7 April 2011

Tenant Cashback repairs scheme launched

The Housing Minister, Grant Shapps, has launched Tenant Cashback: a scheme which encourages residents to take control of their own repairs budgets.

Under the scheme, residents will have the option to carry out their own minor repairs or commission them locally, pocketing any savings they make from this. According to the DCLG, ' tenant will be obliged to take on any more responsibility than they choose and the scheme won't place any new cap on maintenance budgets.'

The coalition argues that because maintenance and repair costs amount to £4bn a year, the new scheme will create a bonanza for small repairs contractors, as more money will be spent locally.

Shapps wants to see community groups involved in local repairs projects, renovating particular streets and neighbourhoods, and helping people who cannot tackle their own maintenance.

The Government would like all landlords to offer tenants the chance to manage their own repairs budgets, and they will push forward regulatory changes so that residents can request this.

The scheme is being piloted by two housing associations: Home Group and Hastoe Housing Association, and the coalition plans to change regulations to propagate the scheme across England later this year.

Shapps launched the scheme in an article on the ConservativeHome blog in an article that has attracted some interesting comments. He said:
If you’re handy with a screwdriver, paintbrush or hammer then it’s crazy that you have to call out your landlord to do even the smallest of jobs. You should be able to just get on and do it - hanging on to some of the cash you have saved them. Money you can then put towards whatever you want for your family or perhaps as a deposit for shared equity in your own home.

If tenants step up to the plate and manage to drive down the cost of maintenance then this could lead to them receiving cheques in the post worth thousands of pounds.
The article suggests that landlords will be able to use the annual electricity and gas check-up to ensure that property standards are maintained.

The Chartered Institute of Housing (CIH) has responded to the scheme, and its Chief Executive Sarah Webb said,
"...many tenants will prefer their landlord to arrange repairs because it will be easier and faster, and some will feel strongly that a repairs service is a core part of their tenancy agreement.

"The scheme poses challenges for landlords too. For example, it must not encourage tenants to forgo repairs - who will pick up the cost of a major repair which arises because minor repairs were not done in time or to a high enough standard? Lenders will expect property to be well maintained, and landlords will have to find ways to provide assurances that the value and quality of property is safe if repairs are beyond their control."
David Orr from the National Housing Federation said:
"We think it's an idea which is well worth testing and we welcome the fact that there will be a rigorous pilot before the plan is introduced across the board."

Councils cutting management before services

The Local Government Association (LGA) has carried out a survey of local authority finance directors taking a close look at where cuts will be made as budgets for the 2011-12 financial year take effect.

The survey covers 40 per cent of local authorities and found that nine out of 10 responding councils have already reduced the cost of senior officers, either through cutting numbers or pay, and eight out of 10 have cut middle-management costs. More than seven out of 10 have set up shared services with another authority.

The survey asked, 'Which services will receive a proportionally larger savings target in 2011/12?' No councils said they were targeting spending on housing and homelessness, with 58 per cent of responding councils planning to 'make proportionally greater savings in 2011/12 through central services, such as administration, human resources, finance and IT'. The next most popular services for proportionally larger cuts were services for young people (22 per cent) and library and cultural services (16 per cent).

The two services which authorities said their councillors had most often sought to proportionally protect in 2011/12 were children’s social care (63 per cent) and adult social care (57 per cent).  Housing and homelessness services ranked fourth at 14 per cent, behind refuse and recycling.

Baroness Margaret Eaton, Chairman of the Local Government Association said:
"Where resources are under pressure, the survey shows that councils are targeting services at those most in need, while at the same time taking steps to reduce the cost of bureaucracy and management."

Wednesday, 6 April 2011

Housing need gap 'is getting bigger'

CIH policy adviser John Perry has written an article for Public Finance magazine analysing the underlying problems facing the government in meeting housing need.

Drawing on the DCLG's 'Estimating housing need' report, Perry shows that the number of households in need has reached two million.

He points out that a drop in housebuilding, lack of affordability and 'experimental' government policies, mean that housing supply continues to fail to meet demand.

Perry says that falling numbers of home buyers, home owners and new builds has caused a 'massive backlog of housing need still to be met'.

The article concludes that a contraction in home ownership as a tenure will increase pressure on the rented sector as a whole, with a consequent rise of adults living with parents, house-sharing and homelessness.

Union boss 'accused' of being a social tenant

The Daily Mail and the Sun reported that RMT union boss Bob Crow rents his home from social landlord L&Q despite earning what the Mail described as "a SIX FIGURE salary package", while the Sun headlined its report as "Union fat cat on half rent".

The story first appeared in the Sunday Times, which claimed that the union leader's the three-bedroom end of terrace house in Woodford Green, north London had a market rent of £300 a week, while L&Q rents for neighbouring homes are around £150 a week.

Housing minister Grant Shapps said: 'With nearly 5m vulnerable people languishing on housing waiting lists, I would have thought a highly paid union baron would feel somewhat awkward taking advantage of publicly subsidised housing.'

A spokesman for the RMT said:
'Bob Crow makes no apology for living in social housing at the heart of his local community.

'Bob was born into a council house and has lived in one all his life, and actually turned down a union mortgage in favour of remaining a tenant.

'Bob also turned down the right to buy his council house at a discount, as he believes social housing stock should remain available for future generations.'

New Homes cash announced

Housing Minister Grant Shapps has announced the final New Homes Bonus allocations for the first year of the new scheme. He called on councils to sit down with residents to discuss how to spend the cash.

Through the New Homes Bonus the government will match the council tax raised from new homes for the first six years.

Under the first cash payments for the scheme, 326 local authorities will receive a share of £200m for increasing the effective housing stock by almost 150,000 in 2010-11.

When Shapps was challenged in parliament on his assertion that the new homes bonus will not penalise deprived areas to favour more affluent ones he pointed out that, of the five areas to receive the most cash under the scheme, three are in the midlands or the north (Birmingham, Bradford and Leeds).

But Brian Green, writing in the Brickonomics blog, analyses the payments on a head of population basis and shows that, looked at in this way, Salford is the only northern council in the top 10, in fact the only one outside the South East.

On this analysis the biggest winner is the City of London, which receives £28.51 per person. Birmingham, Bradford and Leeds are ranked 158th, 38th and 106th, receiving ££3.14, £5.42 and £3.63 per person respectively.

Tuesday, 5 April 2011

Clegg launches social mobility strategy

Deputy Prime Minister Nick Clegg has unveiled the coalition government's Social Mobility Strategy.

The new strategy, Opening Doors, Breaking Barriers, aims to ensure everyone has a fair opportunity to fulfil their potential, regardless of the circumstances of their birth. The report includes a wealth of evidence of the unequal life chances of children born into poorer families.

The strategy aims to tackle unfairness at every stage of life with specific measures to improve social mobility from the Foundation Years to school and adulthood.

The Deputy Prime Minister said:
"Fairness is one of the fundamental values of the Coalition Government. A fair society is an open society where everybody is free to flourish and where birth is never destiny.

"In Britain today, life chances are narrowed for too many by the circumstances of their birth: the home they’re born into, the neighbourhood they grow up in or the jobs their parents do. Patterns of inequality are imprinted from one generation to the next."
However, with the exception of a new policy to discourage unpaid internships, the strategy mainly brings together the key areas of the coalition's existing welfare and education policies.

A set of seven key indicators is included in the strategy, defining how the government will measure social mobility. These indicators will be included in departmental Business Plans to enable the government to monitor and fine tune its approach.

Child poverty strategy

The government has also published its child poverty strategy, Tackling the causes of disadvantage and transforming families’ lives, setting out its approach to tackling poverty for this Parliament and up to 2020. Housing benefit changes appear in the chapter on "Supporting Families to Achieve Financial Independence", while the government's housing and homelessness policies are referred to in the chapter on "Supporting Family Life and Children’s Life Chances."

The strategy was a requirement of the Child Poverty Act 2010, which also required the government to establish an independent Child Poverty Commission in time to consult it while preparing the UK Child Poverty Strategy. The Commission was not set up, although the government has now announced in its place a new Social Mobility and Child Poverty Commission that will report to parliament and monitor and drive progress towards ending child poverty, improving life chances and increasing social mobility.

The new Commission will need the Poverty Act to be amended so, in the interim, the remit of the current Independent Reviewer on Social Mobility, Alan Milburn, will be broadened to include child poverty.

The Chief Executive of Child Poverty Action Group, Alison Garnham, strongly criticised the child poverty strategy, saying:
"A child poverty ‘strategy’ which does not set out how poverty numbers will fall, and by when, is not a strategy and is incredibly disappointing and surprising given the Prime Minister’s stated commitment on tackling poverty.

"The ‘strategy’ is unlawful because it has not kept to the requirements laid down in law by Parliament. An expert Child Poverty Commission should have been set up and consulted in the strategy’s preparation. This failure shows in the poor quality of the ‘strategy’ itself.

"It is absolutely staggering to see in the 'strategy' cuts to housing benefit and support for sick and disabled families that will make poor families poorer. On top of benefit cuts, wage stagnation and rising prices for basics like food, fuel and clothes mean there is an immediate crisis for families. Urgently addressing the financial crisis for families should be the foundation for the strategy."

Shapps to Central Office?

The Evening Standard's Political Editor Joe Murphy has claimed that housing minister Grant Shapps is tipped to replace Baroness Warsi as Tory chairman to "sharpen the party's campaigning edge."

Warsi, the country's first woman Muslim Cabinet minister, caused controversy when she suggested that Islamophobia had "passed the dinner-table test" to become socially acceptable in Britain, and claiming that the Alternative Vote would give more power to fascists.

A senior MP told the Standard:
"The expectation now is that he [David Cameron] will do it in June or July, to freshen up the team after the May elections have died down."
Shapps is a former Conservative vice-chairman who was in charge of campaigning.

Jobseekers face sanctions to meet targets

The Guardian has published an article claiming that vulnerable unemployed people are being tricked into losing their benefits in the face of growing pressure from the Government to meet welfare targets.

The piece quotes a Jobcentre Plus whistleblower who claims staff at his office have been handed fixed targets of three people a week to refer for sanctions - often for trivial reasons. The whistleblower said:
"You're looking for ways to trick your customers into not looking for work."

"You come up with many ways. I've seen dyslexic customers given written job searches, and when they don't produce them – what a surprise – they're sanctioned. The only target that anyone seems to care about is stopping people's money."
The Guardian claims DWP statistics show that cases where claimants have lost their benefits have rocketed since the start of 2010 to 75,000 in October. Figures also indicate that cuts to claimants with registered disabilities have more than doubled to 20,000 over the same period.

The Department for Work and Pensions (DWP) denies that there are targets for benefit cuts calling the idea, "ridiculous".

The Guardian has published data showing benefit sanctions across the UK, showing that, 'Jobcentres are stopping jobseekers allowance (JSA) at a far greater rate than the number of jobseekers increases.'

Friday, 1 April 2011

Future of local public audit

Almost eight months after announcing the abolition of the Audit Commission, the government is consulting on how councils and other local public bodies will be audited after the doors of the Commission close.

Ministers believe that the current system of local auditing where the Audit Commission is the regulator, commissioner and provider of local audit services are inefficient and unnecessarily centralised. Currently the Commission undertakes 70 per cent of local public audits and commissions the remainder from accountancy firms.

Under the new proposals, councils would be free to appoint their own external auditor, although they will be required to have an audit committee with (at least) an independent chair and vice chair. However, there is concern about  the dilution of the current independent appointment arrangements. The Audit Commission's chairman Michael O'Higgins said:
'Some councils have gone to extraordinary lengths to prevent an auditor issuing a public interest report, including lobbying to have the auditor removed. That is why we set such store by the principle of independent appointment... The government's proposals for audit committees with a majority of independent members will go some way to safeguarding auditors' independence, but it is too early to judge if the safeguards will be sufficient.'
O'Higgins's concerns echoed those of witnesses from the public accountancy bodies giving evidence earlier this week to the Communities and Local Government Committee inquiry into the audit and inspection of local authorities.

The government believes that its proposals will lead to lower audit fees, an assumption questioned by O'Higgins and by CIPFA.

The publication of the consultation paper coincided rather unfortunately with a House of Lords Economic Affairs Committee report Auditors: Market concentration and their role which found that ‘The Big Four auditors’ domination of the large firm audit market limits competition and choice. The influence of the ‘Big Four’ - Deloitte, Ernst & Young, KPMG and PricewaterhouseCoopers - could be moderated if the Commission's in-house audit practice succeeds in its plans to establish a new, employee-owned audit firm.

The LGA chair Baroness Margaret Eaton was reported by Public Finance magazine to have called on the government to ‘avoid introducing restrictive bureaucratic measures which discourage smaller accounting firms from bidding for work’. She added: ‘The development of a proper marketplace, offering the services of a wider variety of different audit firms will create greater competition, bring down costs and give councils access to the most skilled practitioners.’