Agenda item

Purpose: The purpose of this report is to provide Members with the opportunity to discuss the merits of West Berkshire Council opting into the national scheme for auditor appointments for the financial year 2018/19 onwards.

The Committee considered a report regarding Public Sector Audit Appointments (Agenda Item 7).

Andy Walker explained that following the closure of the Audit Commission and the end of the transitional arrangements, at the conclusion of the 2017/18 audits, the Council would need to consider the options available in terms of appointing an external auditor and putting in place new arrangements in time to make a first appointment by 31 December 2017.

Opting in to a national scheme would provide maximum opportunity to limit the extent of any increases by entering in to a large scale collective procurement arrangement and would remove the costs of establishing an auditor panel. There would not be a fee to join the national scheme, the audit fees that opted in bodies would be charged by the sector led body and would cover the costs of appointing auditors. The Local Government Association believed that audit fees achieved through block contracts would be lower than the costs that individual authorities would be able to negotiate. In addition by using this national scheme the Council would avoid having to do its own procurement and the legal requirement to set up a panel of independent members. The S151 Officer explained that around 270 authorities, including all five other Berkshire Unitaries, had indicated that they would opt into the scheme. Mr Walker commented that the LGA would be sensitive to tight local government resources.

Councillor Steve Ardagh-Walter queried what benefits would be achieved other than the fact that this appeared to be a more convenient approach. Councillor Keith Chopping  was concerned about possible cost implications associated with this proposal. The Committee were concerned that the Council had to respond by the 08 March 2017, but that the contracts would only be awarded in June 2017 and that the scale of fees would only be published in autumn 2017 and would come into effect in March 2018. Members queried whether they would be able to withdraw from the process if fees were higher than anticipated.

The S151 Officer explained that the Council would be asked to sign up to a five year contract which might include a break clause if terms were not agreeable to the organisation but that this might have cost implications for the Council.

Councillor Quentin Webb stated that he was somewhat reassured by the fact that the scheme would be administered by the LGA as a not for profit company. Councillor Steve Ardagh-Walter commented that the scheme might only illicit tenders from the ‘big six suppliers’ and that more attractive terms might be able to be negotiated with a smaller firm.  The S151 Officer noted this comment but explained that any auditors applying would have to be familiar with public sector practices. This would not necessarily discount smaller firms and the LGA had spoken about breaking down barriers to entry into this market. He hoped that this process might engage more auditing firms.

It was agreed that additional information was required by the Committee in order for them to make a recommendation to Full Council. Additional information required included indicative costings should the Council wish to appoint its own external auditors, getting a ‘Plan B’ auditor in place should the offer prove to be unattractive, information on ‘get out clauses’, any additional information on costs of the proposed scheme that became available in the interim period. The Committee therefore agreed to defer the decision until the 06 February 2017 to allow additional time to gather more information. They would then make a recommendation to the March 2017 Full Council meeting.

RESOLVED that:

1.    A revised report would be brought to the 06 February 2017 Governance and Ethics Committee.

2.    Following discussion at the 06 February 2017meeting a recommendation would be made to the Full Council meeting on the 02 March 2017.

3.    Call-In comments to be completed.