Do ‘sticky’ institutions always survive? The demise of the Audit Commission

Katherine Tonkiss

The Audit Commission played a central role in the audit, inspection, performance improvement and regulation of local authorities (and other public service providers) in England for over thirty years. Operating at arm’s length from government, it thrived under the efficiency and performance improvement agendas of successive Conservative and Labour governments, growing into a large and powerful public body. Yet those familiar with the history of the Audit Commission may note that antipathy towards the institution among local authorities and other stakeholders grew at the same time its powers were being expanded, and when the Coalition Government came to power in 2010 the Commission had lost considerable popular support. Yet few – and least of all the Audit Commission itself – anticipated the announcement of its abolition in August 2010.

The academic literature on the reform of arm’s length bodies doesn’t account for the relative ease with which the decision to abolish the Audit Commission was accepted and progressed. This literature tends to highlight how abolitions of large and powerful bodies which are deeply embedded in the public institutional architecture of the state (as the Audit Commission was) are very contested and difficult to implement. The literature refers to the ‘institutional stickiness’ often displayed by such bodies, denoting their capacity to survive even where there is considerable will to abolish. The Audit Commission appears to buck this trend – why?

This is the question we sought to tackle in our recent article on the abolition of the Audit Commission, published in Local Government Studies. In our article we apply a form of ‘argumentative discourse analysis’ to a large qualitative dataset which we collated on the abolition. This approach enabled us to focus on the ways in which narratives and storylines expressed by different actors framed the Audit Commission and the decision to abolish. As a result, we are able to demonstrate how discourse is an important medium through which administrative reform is negotiated.

In our analysis we identified that there was a strong pro-abolition discourse which focused on the idea that the Audit Commission had become bureaucratic, inefficient and burdensome; that it was not delivering a regulatory function in the public interest; and that change was needed to rectify these problems to deliver full accountability for public audit. This discourse was underpinned by a range of storylines which focused on areas such as accountability, localism, inefficiency and the desirability of open market competition for audit contracts. These storylines were uttered by a wide range of considerably powerful actors such as the government, conservative MPs, the right-wing press and the Local Government Association, and in a range of public settings including parliamentary debates, evidence to select committees, press briefings and ministerial statements.

By contrast the anti-abolition discourse was far weaker. It focused on the Audit Commission as providing a high quality independent audit function and sought to challenge narratives about it being inefficient and wasteful. The key storylines were uttered by the left-leaning press, the Audit Commission itself, some third sector organisations, some Labour MPs and a trade union, making use of select committees, responses to the government consultation on the decision to abolish, and open letters. Yet this discourse was not overtly anti-reform. It focused more on preserving the key functions of the Audit Commission, such as the independence of public audit, more than it did on the preservation of the Commission itself.

What our analysis shows, therefore, is that a strong ‘discourse coalition’ formed around the pro-abolition position which provided a solid basis for the newly elected government – aided by a popular mandate, legislative capacity and executive authority – to move forward with abolition. The influential actors involved were able to access various institutional settings which ensured that these storylines would be reported in the media. Timing and time were also important factors – the proposal was developed in secret, and the Audit Commission was only notified a few hours ahead of the abolition statement in the House of Commons. Such timing prevented the Audit Commission from formulating and seeking to build a strong discourse coalition around its own anti-abolition storyline.

The Audit Commission’s ability to survive was also hindered by deep institutional norms which prevented it from seeking its own preservation. This can help to explain why it refrained from launching a full defence, focusing only on the preservation of its functions rather than of the organisation. The discursive resources open to the Audit Commission were constrained by the deep norms which come with accepting appointed office, including not criticising its own abolition or political decisions concerning administrative reform. Without this defence, and without substantial stakeholder opposition to the proposals, the abolition was relatively straightforward.

Our analysis, therefore, helps to explain why, contrary to the literature on institutional stickiness and to other parallel cases of public body abolition at the time, the Audit Commission’s abolition was relatively simple and unopposed. Isolated and bound by institutional norms not to criticise its own abolition, the Audit Commission and its few supporters were placed in a weak position by a powerful pro-abolition discourse coalition.

This post is based on the following article: Tonkiss, K. and Skelcher, C. (2015) Abolishing the Audit Commission: framing, discourse coalitions and administrative reform. Local Government Studies. DOI: 10.1080/03003930.2015.1050093.

Katherine Tonkiss is a Lecturer in Sociology and Policy at the School of Languages and Social Sciences, Aston University. Prior to this she was a Research Fellow at INLOGOV working on Shrinking the State, a project examining the abolition of public bodies under Coalition Government.

Katie Tonkiss

Babies, bathwater and baths

Alan Doig

It came as no surprise that the incoming Conservative government was quick to abolish the Standards Board for England after its 2010 election victory. Media comments and party policy briefs made it plain that the government had no time for what it perceived to be an over-zealous, heavy-handed and centralised regulator that added little value to local government.

More of a surprise was the decision to bury the Audit Commission at the same time for, apparently, the same reasons. One can be charitable and assume the government didn’t think through the consequences; the legislative reforms or pronouncements about armchair auditors certainly suggest this. However, it would now appear that at least some in government and Whitehall recognise that throwing out the baby with the bathwater may have won them political brownie points with their local government colleagues and with the private sector, but removing the Commission’s Audit Practice (still District Audit to the rest of us) may have been akin to throwing out the bath as well.

Why Regulation?

In noting some of the episodic scandals that underline the enduring conflict between private or partisan interests and the responsibilities of public office, my recent article in Local Government Studies discusses the long haul of what might be termed the low road of compliance and the high road of ethical standards. The former concerns a control environment – the presence and application of technical and procedural controls that provides reasonable assurance of effective and efficient operations, internal financial control and the proper stewardship of public funds and powers, as well as laws, procedures and resources to scrutinise, detect and punish perpetrators. The latter involves the more recent focus on public ethics and governance arrangements. Together the two roads should combine to achieve an internalisation of norms and standards that in turn promote organisational cultures which protect against specific interests and individuals, and where the control environment can operate more effectively against those seeing to defraud or corrupt local government internally or externally.

Tipping Points in Integrity and Compliance

Unfortunately the dissolution of District Audit, together with its institutional expertise, inter-institutional cooperation, particular powers, and national assessment of patterns of delivery, overview of issues and trends, as well as data dissemination, has come at a time when local government is also undergoing changes, ranging from the implementation of the localism agenda to the declining in-house capacity to underpin the control environment which has drawn on council resources dedicated to fraud against housing benefits.

Externally, there continues to be a decrease in the resources the police are willing to commit to economic crime while the abolition of the National Fraud Authority removes the short-lived attempt to develop a national anti-fraud strategy at local level. Combined they create an unstable and under-resourced environment in which to maintain the direction of travel along both roads in the face of the roadworks thrown up by the various abolitions and wider legislative reforms.

…And a Voice from Beyond the Grave

One consequence of the roadworks has been discussions over government funding for councils’ investigative capacity and about whether other bodies could pick up the high road agenda. While good councils continue holding on to the lessons learned and seeking to maintain the direction of travel, the potential for poorer councils reverting back to those habits that made the roles of the Audit Commission and District Audit, and even the Standards Board, necessary is a risk that government cannot ignore. Nevertheless, having thrown out baby, bathwater and bath, with councils left to their own devices, and with much more pressing issues on council agendas, it will be interesting to see if the Audit Commission’s own warning, over 20 years ago in 1993, may come back to haunt the government when, in arguing for value and relevance of an anti-fraud culture or an ethical environment, the Commission warned of a local government environment which had been ‘rendered more demanding and complex by recent changes to the nature and operation of local government services. Many of these changes, such as the delegation of financial and management responsibilities, while contributing to improved quality of service, have increased the risks of fraud and corruption occurring’.

Alan’s article in Local Government Studies: Roadworks Ahead? Addressing Fraud, Corruption and Conflict of Interest in English Local Government is available online now (or contact the author if you do not have an institutional subscription).


Alan Doig is Hon. Senior Research Fellow at the International Development Department, University of Birmingham; Visiting Professor, Newcastle Business School, Northumbria University and Board member, Management Board, North-east Fraud Forum.