Accounting for failure: rebuilding the local audit system

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Local authorities manage over £110 billion annually, delivering crucial public services and driving economic growth. Yet the local audit system designed to ensure their efficiency and accountability is in crisis.

Fragmented leadership, severe workforce shortages, and increasingly complex requirements have caused widespread delays and backlogs.

This report examines the root causes of the collapse of the local audit system and proposes a path forward. It outlines three critical steps to rebuild the system: establishing a clear system leader, addressing workforce shortages, and simplifying processes to improve timeliness and transparency. These reforms aim to transform local audit from a beleaguered process into a vital tool for strengthening local governance, enabling better financial decisions, and safeguarding public trust.

As councils face rising pressures and tight budgets, fixing the audit system is an urgent and foundational step toward sustainable, accountable local government. Accounting for failure offers practical recommendations to secure a stronger future for the local state.