Appearing before the Public Accounts Committee, James Bowler, a senior civil servant and permanent secretary at the Treasury and Will Garton, director general for local government at the Ministry of Housing, Communities and Local Government (HCLG), were questioned about the state of local authority audits for 2024-25 and whether they were likely to be signed off by the June 2026 deadline.

Leading discussions at the hearing, MP Clive Betts (pictured) asked Bowler ‘for 2024-25, what position are we likely to be in with local authorities producing audited accounts, or unaudited accounts with at least most of the data there?’

Bowler told MPs there will be 145 publicly funded bodies with missing data in their accounts.

‘I can confirm that in the last whole of government accounts (WGA) we had 211 entities that were missing data, while the 2023-24 WGA has 201,’ said Bowler. ‘To answer your question, in 2024-25, we expect that there will be 145 entities missing.’

Bowler put this down to a ‘trade-off between timeliness and quality’, with the Treasury ‘choosing timeliness’. Bowler said: ‘It is coming down, but it is still too much - 98% of local authorities have submitted draft accounts for 2024-25.’

Betts then asked Garton: ‘For 2024-25, how many local authorities will produce accounts that are fully audited and not disclaimed?’

Garton said: ‘We will not know that - I cannot give a prediction. We will not know finally until January 2027 for the year 2024-25 - It would be unwise of me to pin a number to the mast because there are a lot of factors outwith our control.’

But the committee questioned this response, as Betts said: ‘For the residents in that authority, or in the two or three authorities that do not have those accounts, that is not acceptable.’

Bowler said: ‘Progress has been made, and I pointed out the decline in missing data. When we gave evidence at the start of the year - I do still think that we are doing the right thing to require and help local authorities to get into a better place, but absolutely, the situation in local authority audit is poor.’

Garton stressed progress had been made, saying ‘until the year 2022-23 - we had 1% of local authority accounts audited. That is now 99% - for the year 2023-24 we have got 94%. For 2024- 25, 98% have been published. There is progress’.

Betts then questioned Garton about whether there would be similar problems with local authority audits for 2027-28 accounts.

Garton said: ‘If we end up with a handful of qualified or disclaimed accounts at the end of 2027-28, I think that would still be success. It is an ambitious target… it is not a target, it is an aspiration.’

At this point Chris Kane MP interjected, questioning the use of the word ‘ambitious’, saying ‘ambition and aspiration are normally good words to hear, except when we are talking about an audit function’.

‘How are you ensuring that the word “aspiration” cannot just be replaced with sticking my finger in the air and making the best guess I can?’, Kane said.

As the most senior member of the witnesses, Bowler responded to this question: ‘In terms of what you are hearing on target versus aspiration, we do not know exactly what local authorities will give us.

‘We are giving you our judgment as to what it was, and we have got to compare that. We will want to continue to require local authorities to up their game.’

Pictured: MP Clive Betts